Hiring your first reps

You have developed a great product. Now how do you get it into the hands of consumers? I believe your distribution strategy can make or break a company’s success. Familiar with Robeez early sales model, Sharon sent me this email:

I am really intrigued by the model of your early sales force – that is moms and grandmas who were enthusiastic to introduce Robeez to their local markets. I am finding myself now in the position to look for a sales rep for our products. I have talked to sales reps that represent many lines, and I'm also talking to a mom who is very enthusiastic, and in a good position to introduce our products to Alberta, Saskatchewan, and Manitoba.

When you hired your "mom sales reps", did you pay them the same commission as multi-line sales reps (I think it's 10-15%)? Since they represent only your line, are they considered your employee or self-employed? Did you cover any expenses, such as travel, business cards, samples, etc? Were they allowed exclusivity in their areas, and if so, what conditions did they have to meet, such as sales volumes, or number of stores? And at what point do you terminate a sales rep - aside from obvious reasons such as non-performance, what happens if their market becomes saturated and they can no longer achieve their sales goals? If I had someone work hard for me for, say 5 years and helped me get to where I wanted, but now there's no new stores I wish to be in and sales volumes are at a plateau, and they don't want to leave, I don't know if I could have the heart to let someone go! Did you restructure their position within the company?

It looks like this model of sales reps worked for you when you were getting established. What were the drawbacks of this model, and what would your advice be for anyone wishing to follow?

The benefits of hiring moms to represent your baby products are obvious. They can speak genuinely about the benefits of your product from first-hand experience. The benefits of hiring established sales reps are their experience and existing contacts with retailers. Finding someone with both can be difficult. From my experience, I found moms to be the better route. Although they may not have sales experience, they make up for a lot just with enthusiasm. Multi-line reps often have a large number of products and are not able to focus a great deal of their energies on developing distribution. Here’s how we built our sales team at Robeez:

• Commission – At Robeez, all reps earned the same commission, whether mom or multi-line.
• Employment – Reps were self-employed, rather than hired employees.
  Expenses – Reps covered their own expenses associated with selling Robeez, however samples, print materials, and business cards were provided.
• Exclusivity – When my first rep started with Robeez, her territory was “unofficially” North America. As time went on, we needed more reps to service the number of accounts and territories were broken down. The territory size then needed to be manageable and financially viable for the rep.
• Termination – Along the way, I did have to let reps go who were not performing. One misconception I want to clarify: just because a territory is saturated with retail accounts, does not mean that the rep is no longer useful. Good reps call on accounts regularly to present new collections, merchandise displays, and suggest tips or tools for increasing sales in-store. They have a relationship with the store that goes well beyond getting the first order.

My advice for you as you hire your first sales rep: don’t rush. Take your time to find the right person for your line. I believe that when you meet the right person, everything will just click. Happy hiring!

Manufacturing: Do-it-yourself vs. outsourcing

Tracey sent this question recently:

Why did you decide to hire seamstresses and manufacture Robeez yourself rather than look for a shoe/leather apparel manufacturer and have them made?

Good question! When I first started Robeez, the reason I decided to coordinate manufacturing myself was to save money. There were initial start-up costs and higher price per item associated with manufacturing companies. I knew that in order to make my home business profitable, I needed to operate on a lean budget. So I purchased a leather cutting machine and cut the leather pieces in my garage. I then compiled all the notions needed to make a pair of Robeez and sent the items to home-based seamstresses. I received the sewn shoes and I would then flip the shoes, clip the threads, and package them in bags. This process was certainly labour intensive but it was far more cost-effective.

As time went on, we chose to keep the Robeez manufacturing operation in Vancouver. There were a number of reasons that guided this decision: 1) Quality. In-house production means we can keep tabs on the quality of the product distributed. 2) Turnaround time. Shoes can quickly be produced as needs, within a matter of days if necessary. 3) Lead time. When production is outsourced there are often long leads times between order and delivery.4) New designs can be introduced to the market with very short lead times.

Tracey also had a few more questions: Also, did you have to patent the design? I am being told that patenting a design in the fashion business is not possible. Nor will a NDA hold water when looking for a manufacturer and presenting them with samples. Was this your experience? I received the same advice when I explored the subject with a patent lawyer.

Thanks for coming!

Thank you to everyone who attended the Indigo Entrepreneur Series. I had a chance to chat with a number of different women and hear their stories too. Since the event, I have received some great feedback and a number of questions. I will get to these questions posted as soon as possible.

In addition to the speaker series, Indigo asked me to share my favorite books on entrepreneurship. These are “Sandra’s Picks”:

• Good to Great, Jim Collins
• Pour Your Heart Into It, Howard Schultz
• Let My People Go Surfing, Yvon Chouinard

There are still a few more speakers in the series. All interviews take place at Indigo Manulife Center at 7:30 pm. There are more details available on Indigo’s website.

• September 26 – Jim Pattison
• September 27 – Gerry Schwartz
• October 9 – Peter Munk

Indigo's Entrepreneur Series

I know it’s short notice but this may be of interest to anyone living in Toronto. On Thursday, I will be speaking at Indigo’s Entrepreneur Series. The series is hosted by Indigo founder, Heather Reisman. Heather will discuss entrepreneurship with me and a series of Canadian entrepreneurs including Ted Rogers, Robert Lantos, Seymour Schulich, Jim Pattison, Gerry Schwartz, and Peter Munk. Here are the details for my date:

Date & Time: September 20th, 7:30pm

Location: Indigo Manulife Centre, 55 Bloor Street West, Toronto, ON

Event format: Q&A with Heather followed by a short Q&A with the audience

The event is open to the public. If you’re able to come, please stop by and introduce yourself.

Characteristics of a mompreneur

I recently received an email from Rebecca, a new mom and aspiring entrepreneur. She has been interested in starting her own business for sometime now. Becoming a mom made everything click. She has a great business idea but is feeling afraid and insecure about taking the first step.

Here’s an excerpt from her email:
It is all so confusing. Apart from the initial fear and insecurities that scare you, it is the bigger picture, like this, that puts a damper on your ideas. "No materials; can't sew. Can't start a business then." The idea is then swept under the rug, and off I go making dinner. Until I get that feeling again, not to drop it.

I believe deep down, that I have a winner here. Something big and I have no idea where to begin or who to trust to share some of this information with to help me get in the right direction.

I think this a good time to reflect on what I think it takes to be a successful entrepreneur. I know there are loads of moms who have a great idea but don’t know where to start. And I also know that it’s not just the practical “how-to’s” but the larger issues like confidence and fear of failure. Here are the traits that I believe can make a difference.

• Optimistic – If you’re going to be successful, you need to believe you will be successful. An optimistic outlook will carry you through the ups – and downs – of life as an entrepreneur.
• Charismatic – You don’t have to be the most outgoing person in the world to be an entrepreneur. But when I meet someone who lights up when they speak about their company, I know they have what it takes to sell the idea.
• Resourceful – I believe learning is an ongoing process whether you are just starting your business or have been established for a decade. Market conditions will change, industry best practices will change. To keep up you need to find people in the know and ask questions.
• Thick-skinned – You have to prepare yourself for the fact that not everyone will love your idea. More often than not, Robeez have been well-received but I also got a lot of “no’s” along the way.
• Self-motivated – There will always be some tasks in your business which you prefer to do and others that you would rather pass on. There’s a lot of discipline involved in running your business.

Rebecca also had questions about manufacturing so I will cover these specifics here.

I also do not sew (never have). The idea I have in mind is not something I would necessarily be working with in my home. I would need someone else to be creating my vision. Who are these people and do they supply the materials? How does one find fabrics made of Lycra and cotton?

I can suggest a few potential solutions. The first would be to hand your idea to a product design and development company. They specialize in taking your idea and developing it for the marketplace. This is probably the best option if you are not necessarily interested in running a company. A Google or yellow pages search would be a good place to start.

If you want to be a little more hands-on, another approach is to hire a designer. A designer can take your idea and create a pattern. Using the pattern, they will develop a prototype and make adjustments from there. To find some with these skills, you could look for a local seamstress in the yellow pages.

For fabric suppliers, you’ll need to find a fabric wholesaler. They will be able to offer you a better price than local retail shops but you will likely need to purchase a certain volume to qualify. You could search online to find the best option or seek out a company using a fabric you like and find out who supplies their materials.

Hire staff or add a partner

This post is for all the mompreneurs who are expanding faster than they know what do! Nicole of Westcoast Baby writes: As our business has been rapidly expanding, we need to hire staff to help out. I was wondering if you brought on family or friends as employees and how you feel about this.

Hiring family or friends can be a double-edged sword. On the plus side, you know them. You know their strengths, have a clear understanding of their skill set, and enter with a level of trust established. But on the flip side, what if they perform poorly on the job? It can be more difficult to approach your sister or best friend than it is someone you don’t have a lengthy history with. And if things don’t go well this could damage your relationship long-term.

I can tell you that I have had a positive experience regarding the involvement of family at Robeez. In 1999, my brother joined the company as one of my business partners. Later, my husband joined Robeez as a sales rep.

When hiring your first employee(s), you need to consider the skill set you require. Right now, you are probably doing a little bit of everything from developing your website to packaging boxes. Do need to hire someone that packs and ships orders so you can focus on business planning? Or do you need some help with marketing? Perhaps a freelancer would be more appropriate than an employee. Take a look at your budget and your own strengths to determine what will work best.

Beyond the skills your new employee brings to the table, their personality will also have a impact on your company. The most important thing I can say about hiring employees: take the time to find the best fit. In a fast, growing entrepreneurial company, everyone needs to be a team player. Look for someone who isn’t afraid to jump into a wide variety of projects. Early on, I had an employee who was hired for marketing and customer service but if it was a busy day in packaging and we needed to get orders out, she was back there stuffing shoes and taping boxes.

From my experience, these are the key areas to focus on when hiring your first employees are communication and values. What values are important to them? They should be similar to your own. How do they treat coworkers? How do you expect them to treat customers? It’s important that whoever you hire, they need to complement you and your partner’s personalities.

And the second half of Nicole’s comment: You had mentioned that you brought on your brother and a third party to help with Robeez growth, was this complicated? We are currently a partnership but are interested in taking on a silent third party? Any advice?

I believe you need to equate adding a partner to your business to getting married. It is essential that you have the same vision for the future. Don’t enter into an agreement lightly. Be sure to involve legal counsel and draft a shareholders agreement to ensure everyone’s interests are protected.

Crafty advice

The following question comes from Joanne, co-founder of Krafty Kidz Creations, a collection of handmade children’s craft kits. Here’s her situation:

We just started in April this year, testing the waters to see what response we would get. The response has been huge and now I'm very intimidated. We too, don't have a lot of money and resources to get our business running at a higher capacity.

I have heard there are grants for women entrepreneurs but I can't find any information on them, except from sites that want a $400 registration fee to provide the information. Do you know what grants there are or where I can find the information without paying a fee?

I’m sorry to say I haven’t heard of any grant programs. I came across this thread on the subject.

I think you are going to need to look for other avenues of financing. I know this can be intimidating at first, so I encourage you to carefully consider where you want your business to go. I’ve mentioned them before: Women’s Enterprise Centre has a fantastic set of resources for women entrepreneurs.

And her question continues below:
Also, to date we haven't been purchasing our supplies from a wholesaler but from local discount stores instead. We don't have the volume to purchase from wholesalers. We have been told there is a minimum purchase of $500-$1500 depending on the wholesaler. Do you know of a way around this minimum volume?

There are few options I can recommend here:

• Shop around – There are likely a number of wholesalers providing craft materials in your region. I recommend contacting a number of different providers to find the products, prices, and financing that will work best for your business.
• Appeal to their softer side – Sometimes it just takes a little more background for the wholesaler to know you are committed. Talk to them, show your product, and explain your future plans. If they’re smart about customer service and you’re close to the minimum, they’ll get you now as customers before you grow.
• Find a partner – Network with other small businesses that need similar materials; perhaps a scrap booking company or a preschool. Partnering with another company allows you both to meet the minimums.