I completed Graduate B-School, with honors I might add, and was already employed as a VP for Sutton Place Gourmet. While most of my peers were sweating over finding a new career, I was already entrenched in a new venture and quite happy with it. Even though I went to business school to change career directions and I found myself in the same industry, I really liked the company and it was a good fit for me. For a small, 3 store retail chain, there were a lot of moving parts that interested me and fed my entrepreneurial needs. We had a manufacturing backbone that serviced all of the stores with products that were unique at the time. We had our own bakery production specializing in french sourdough breads; a french pastry and cake production; candy production; coffee roasting; salad production; ice cream production. We had coffee bars before there were Starbucks in the DC market and we had restaurants in 2 of the stores. It was a conglomeration of small businesses feeding a larger business. It was perfect for my food background coupled with my newly minted business background.
The company was unique at the time, had a clear point of differentiation, had a loyal customer following and was very profitable. With all of the moving parts behind the scenes, there were always opportunities to fix problems and get better. Within a very short period of time I had my hands in everything from new store selections to store operations to marketing to strategy and capital raising. Everywhere I turned there were opportunities for new businesses and I took advantage. Out of all of the ideas I capitalized on, I want to focus on one in particular that turned into a substantial annual profit generator, Food Gifts.
I noticed that every year from late October through mid January our stores became overwhelmed with orders for gift baskets made up of food products. As we were in the Washington DC market place, associations, companies, lobbyists, used to call us up and order 100 gift baskets at $50 per to be delivered on capitol hill. It caused a problem in the stores because of the busy time of year and the lack of focus on this business. It became an afterthought that had potential to not only build profit, but expand the brand. I mad up a business plan to centralize it in a space in our warehouse, create a catalog of consistent baskets and market it to grow it larger and take advantage of other holidays. It worked well and we made far more profit on higher sales than we had in the past. It actually became an entirely new division with its own P&L and manager. But my entrepreneurial genius was about to really shine through with a trip to the mall.
While I was in the mall I noticed that one of the largest jewelers had closed leaving a great location empty in one of the busiest malls in the country. Since this was early October, I didn’t think anyone would take the space before the holiday. I found the mall manager and asked about the space. What he told me in his next sentence enabled me to think way outside the box. He told me that he was upset about the space being empty because he got a bonus based upon occupancy through the end of the year and 100% occupancy for him would mean a strong bonus since it was difficult to achieve. I asked him if he would be willing to lease the space from Nov 1 through Jan 15. He would get his 100% occupancy goal and I would get to test a new concept inexpensively. I negotiated terms solely based upon success and very little upfront cash on our side. He agreed in principal and I told him I would be back with the president shortly. Monday morning I was in our corporate office with the CFO and President selling the concept of putting up a temporary store selling food gifts, gift baskets and housewares for the holidays. Not only could we get additional sales but we were planning on a new store in that area, so it would expose us to the customers in that market. It was easy to sell as it made so much sense and thus our popup holiday mall stores were born. Suddenly that one store turned into several every holiday season and generated significant incremental profits for the company and the gift division. It worked so well that other retailers copied the concept, but they just couldn’t execute it like we did.
Sometimes, you might just find that creating a new business inside of an existing one may be a better alternative to a straight startup. Intra-preneurship at its finest I guess.
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