Practice English Speaking&Listening with: Business Reality Check

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>> This chapter of Delivering Success brought to you

by the U.S. Small Business Administration

and the United States Postal Service emphasizes being prepared to change course.

Three entrepreneurs explained how to anticipate change.

And how they made changes to keep their businesses viable.

Warren Brown, owner of K-Club Bakeries in the Washington, D.C. area advises you

to dust off your business plan and see where you are.

>> It's really important to kind of take a step back every once in a while.

And if it's, you know, pulling out the business plan,

or pulling out something that's closely associated with it,

that really does help to see where you are.

>> David Kravetz and Eileen Spitalny are co-owners

of Fairytale Brownies in Chandler, Arizona.

Recognized as the 2006 Arizona small business persons of the year.

Founded in 1993, David and Aileen began baking brownies

in a friend's catering kitchen.

Soon after starting in business they realized that a change

in direction would allow for increased sales.

Listen to how they decided to change their marketing strategy.

>> When we started the business we saw a trend with Mrs. Field's cookies and with Ben

and Jerry's ice cream, more toward gourmet, premium products.

And it was also the beginning of the coffee house craze.

And our original business plan called for us to sell just wholesale to coffee houses.

>> Fairytale Brownies in the beginning thought we'd go to the coffee house craze.

But at the same time we were doing the farmer's markets to get the word out.

And get people's names and address.

And find out who is interested in our Brownies.

What we realized is that we bake a perishable product.

You know, all natural, no preservatives.

And the coffee houses, they would buy a couple dozen.

But we visit them the next week and if they didn't sell them we'd have

to give them new ones.

But at the farmer's market we could send -- sell a dozen at a time to a person.

Or they'd say, oh, I'd love to ship these to my mom in New York, or my sister in Dallas.

And we're like -- oh, we'd be selling dozens at a time instead

of coffee houses with a couple dozen.

So we flipped pretty quickly in the first year and realized we wanted to get more

into mail order and direct marketing as a business.

It just seemed to have more opportunity as far as volume and quality control.

And so we did more than farmer's markets and then we moved into street fairs,

an then we started mailing catalogs through the Postal Service.

And that started as just a black -- black ink on colored paper.

And now we print almost 2 million catalogs, four-color,

28-pages a year -- that get mailed.

We know bake and ship over two-and-a-half million brownies a year.

>> Aaron Wolfson and his business partner Peter Menge [Phonetic],

through an SBA-backed loan, launched the Savvy Gourmet two weeks prior

to Hurricane Katrina hitting New Orleans.

Designed to be a cooking school and a retail cookware business,

they had to adapt their business plan to meet the needs of the community

and survive the effects from the storm.

>> We -- we wrote a fairly comprehensive business plan with specific projections

and really researched the market.

And the business plan we looked at basically three -- three revenue streams.

The cooking classes, the retail, and the catering.

We finished the build out of the location in late July of 2005.

And in August of 2005 we opened the Savvy Gourmet for some soft opening classes.

Some private events for family and friends.

And those went very well.

Everybody was impressed with the space and we were excited to get started.

And then towards the end of August Katrina hit New Orleans.

We -- we -- my partner and I evacuated to different parts of the country.

Ultimately we hooked back up and had some discussions

about what we were going to do with the business.

If you remember those days after the storm, it was pretty harrowing.

We were evacuated.

We were not allowed back into the city.

We didn't know the -- the status of our business, our physical plant --

we didn't know if we had damage, we didn't know if the roof blew off,

we didn't know if we had flooding.

So once we were able to get back in and start cleaning up,

we realized we didn't have any damage to speak of.

And decided that we had to open up as quickly as possible.

We knew that people weren't going to be taking cooking classes

because nobody was in town yet.

It was just military and relief workers.

So we opened up as a restaurant and started serving food in mid-October of 2005.

And as I recall, we got together on a Tuesday

and decided we were going open up as a restaurant.

On Wednesday we sent out an e-mail to our e-mail list.

On Thursday we had 35 people show up for lunch, and it just went on from there.

Because at that point there was nowhere to eat in the city.

There were no grocery stores open, there were no restaurants open.

There were two places to go in town

to get a frozen hamburger, bar food, and what have you.

But we were the only place serving fresh food.

And the way we did that was we had a strong connection

with the Crescent City Farmer's Market and knew a lot

of the farmers personally that sold there.

Through some contacts we kept in touch with them.

And they would actually drop off produce at our location.

And then we would take orders from other chefs that were starting

to open restaurants around New Orleans.

They would come pick up the produce from us and we would serve whatever we had.

If all they had were fresh carrots, we had carrot soup, we had roasted carrots,

we had -- you name it, it was carrots all day.

But people enjoyed the fact that it was fresh food prepared right there

in a clean, nice environment.

We got wireless Internet very early in the Savvy Gourmet.

So people were coming there to congregate and check in with their family and friends,

and check on their insurance claims and you know ,

do all the business of living that they had to do.

So directly after the storm it really became a place to meet; a community center.

We started holding informational meetings there

where the mayor's bring back New Orleans commission would hold a subcommittee meeting,

and people would come from the neighborhood and around the city

to hear how the mayor was hoping to help small businesses.

We got involved with helping other restauranteurs

who lost everything raise money to rebuild their restaurants.

We got involved with the slow food movement to help raise awareness

about buying locally, eating seasonally.

We just found ourselves at the middle of this exciting place that none

of us could have imagined before the storm hit.

We always wanted to have something like that but it really took this type

of tragedy to bring people together.

I found that a lot of businesses that were open prior to Katrina have not reopened

because they've not taken a good, close look at the current situation.

They're trying to fit their old business model into the current landscape.

So we've got to constantly look at what we're doing.

Are we providing the service that people want.

Do we need to add something that we didn't have before.

Do we need to stop something that isn't working any more.

So just a constant reanalysis of our resources, our relationships,

and the business climate have allowed us to prosper and do well in that space.

[ Music ]

>> For more information from SBA on managing for change

and business preparedness, click on the provided links.

And for business tips, log onto the United States Postal Service at usps.com/smallbiz.

The Description of Business Reality Check