SUPPLIER

SURVI VOR

SUPPLIER Are these new supplier companies – all in business for less than a year – moving forward

on the right track? We asked a small

business expert to offer her advice as we follow their progress

throughout 2016. Will they survive and thrive

or wither and die?SURVI VORBy Sara Lavenduski

SUPPLIER SURVIVOR

The Business Expert

Melinda F. Emerson, the “SmallBiz-Lady,” is a small-business expert and internationally renowned speaker on startups, business development and social media marketing. A for-mer social media columnist for The New York Times, she is the host of #Smallbizchat, the longest-running live chat on Twitter for small-busi-ness owners. Forbes magazine also named her the number-one woman for entrepreneurs to follow on Twit-ter. She publishes a resource blog at succeedasyourownboss.com, and is the author of Become Your Own Boss in 12 Months and the ebook How to Become a Social Media Ninja.

Onara Enterprises LLC opened its doors in April 2015 and now has 13 employees. They currently specialize in the manufacturing and printing of lan-yards and bracelets, as well as ID swipes and eyewear retainers. Staff numbers are expected to stay consistent until June through August when seasonal employees are brought on for the summer rush.

“Our sales should be approximately $600,000 by the end of 2015, since we haven’t quite reached a full year in busi-ness and weren’t at full capacity until June,” says Cindy Wright, sole owner of the company. “Our sales slowed down from November through January, but

hopefully with our increasing product line, we can increase sales to reach our goal of $1 million for 2016. Over the next six months, we want to hit $400,000, and our goal for 2017 is $1.3 million.”

Among the challenges the company is currently facing, says Wright, is keep-ing prices economical so that customers will keep coming back for domestic-made products. “If clients are looking for a cheap lanyard, they can import them, but they’ll get what they pay for,” she explains. “Our lace is two-ply and prints and wears nicely, so they’ll be kept after repetitive use.”

The Business Expert Says: “This company is just humming along. Their

Supplier: Onara Enterprises LLC Location: Saint Charles, MI

Cindy Wright began her career in promotional products at Karlen Manufacturing in 1997, working her way up from customer service to sales. After three acquisitions and experience managing all aspects of the promotional division, including sourcing, pricing, vendor and customer development, sales and marketing, Wright bought the company and began operations as Onara Enterprises LLC.

goal of $1.3 million by 2017 seems very realistic. But they do have to be very cau-tious when it comes to hiring employees. Adding workers kills revenue. In fact, at this point, 13 employees is a lot of over-head, especially since these are low-cost items being produced and they’re look-ing to hire even more people come June. The other challenge is keeping the cost of the products affordable since Onara Enterprises is going to have to compete with foreign manufacturers. They’ll have to make sure they keep their operation very lean.

“As far as their marketing goes, they’re doing it well. They really seem to know their audience, especially since they can already comfortably strive for $1 million by the end of 2016. A com-pany’s own website is its number-one sales tool. I would make sure theirs is full of great, high-resolution photos, glowing testimonials and special offers. They might also want to consider some pay-for-click advertising. Overall, they should keep doing what they’re doing, because it seems to be working.”

Supplier: Snappy Towels Inc. CanadaLocation: Toronto, ON

Dan Wood is the former manager of Surround Integrated Marketing, a digital marketing agency, where he gained experience in everything from sales and account management to online advertising, creative campaigns and Web and mobile app development. After establishing Snappy Towels in 2015, he discovered the promotional products industry and found it to be an excellent distribution channel for his new product.

Snappy Towels Inc. Canada began business in the spring of 2015, and continues with just one employee and consultants and contractors as needed. The company currently specializes in the Snappy Towel, a patent-pending premium wearable sports towel made of a durable, waffle-weave microfiber that is compact and super-absorbent. It’s a full-size towel that folds into a quarter of the size of a cotton towel and is 30% lighter. “It folds up to about the size of a book,” says Presi-dent Dan Wood, “so it easily fits in any bag or jacket pocket.” The towel also fea-tures six pairs of snaps that turn the piece into a poncho, cape, hooded towel or

cover-up. Recently, the Snappy Towel has been chosen as the official lifeguard towel by the Lifesaving Society of Canada.

When first designing the towels, the company did deep research into materi-als and fabrics. “We eventually designed a waffle-weave microfiber that fit all of our requirements for comfort, absorbency, durability and portability,” Wood explains. “It’s unique in the marketplace, and works really well with water-based ink in screen printing, digital printing or sublimation.”

The company spent most of its first six months on product development, intellectual property, learning about the industry, vetting the supply chain,

SUPPLIER SURVIVOR

developing relationships, and market-ing, including website development, bro-chures, photo shoots and social media. “We’ve come a really long way in a short time,” says Wood, “and we’re looking for-ward to significant growth in 2016.”

A challenge Wood has now is market-ing his company effectively and getting the word out about his product. “We have a superior product, a strong pricing strategy and a reliable supply chain, so it’s a matter of building relationships and growing awareness,” he explains. “One of the reasons we chose the promotional products industry as our sales channel is because it offers an established distri-bution network that is potentially high-volume. Our product is adaptable to so many markets, so we’re looking for the right distributor agencies that have con-nections in these spaces already.”

The Business Expert Says: “It sounds like for the first months, they’ve been building their product and doing market research. It’s a unique product that’s entirely theirs. I also think it’s super smart to pursue the international

“It became apparent in the third quarter of 2015 that we needed to add staff, especially in our production division.”ROBERT RUSSELL, STRIKE PROMO

licensing deal. I would recommend put-ting together an infomercial, maybe part-ner with a home shopping network to give the item more traction, because it’s cool. I want one! They should certainly go after sports teams, but I think if they also had a retail line in addition to the whole-sale product, that would be a smart move. This is a really versatile product, with a lot of licensing opportunities. I think 45,000 units by 2016 is doable, though they’ll have to fully flesh out their sales channels and figure out who will be sell-ing this item. They’ll also need to have significant inventory soon.

“Hiring contractors is common for startups, but when they’re looking to hire full-time employees, the rule of thumb is to have six months of their salary in-hand before making an offer. With salespeople, it’s a little more flexible because often they’re at 100% commission at first. To get the word out, a cool, funny YouTube clip would be the best move. This product is ripe for a viral video, maybe a Snappy Towel-wearing superhero who rescues you from bad towel experiences at the beach.”

In January 2015, Strike Promo started operations in Chicago, IL, with a fac-tory and decorating facility in Ningbo, China. Four months later, in May 2015, they joined ASI as a supplier member. As of this writing, they have 10 employees, as well as two outside sales representa-tives. “It became apparent in the third quarter of 2015 that we needed to add staff, especially in our production divi-sion,” says owner & CEO Robert Russell. “We attended the ASI Show Chicago in July, which resulted in a dramatic increase in our daily sales volume.”

Strike Promo’s entire product line is comprised of items that have been

designed and patented by members of its ownership team. “We deliberately avoid offering products that distributors could acquire from other suppliers in the industry,” says Russell. “We strive to design, generate and market innovative products that give distributors a chance to present their clients with something new and exciting. To date, all of our origi-nal products have used LED lighting and custom engraving, which includes new items for 2016.”

A current challenge is how to offer more in-person viewing of the wrist-bands, which has been crucial to a positive response to the product. “The

Supplier: Strike PromoLocation: Chicago, IL

Before Strike Promo, Robert Russell spent five years as CFO for Home Run Consultants (asi/226330), a small marketing & product develop-ment firm owned by his father. While there, he was responsible for the company’s finances and directed the domestic ad specialty division. Previously, Russell worked in season ticket sales for the Chicago Black-hawks and corporate sponsorship for Major League Baseball.

SUPPLIER SURVIVOR

manner in which our wristbands are viewed can either diminish or enhance the impact they have,” Russell explains. “When viewing our product in person, the excitement is palpable, the interest is evident and the demand that follows is tangible evidence that in-person viewing is pivotal.”

Nowhere was that more evident than the ASI Show Chicago in July 2015. Strike Promo completed and delivered 300,000 wristbands in the weeks after the show, which brought the number of units sold by the end of the year to approximately 500,000.

At the company launch, Russell was confident the company would sell 250,000 wristbands by the end of 2015. In fact, they had reached that number by the third quarter of the year, and con-tinued to sell in the fourth quarter. “Our

office currently focuses on daily, weekly and monthly goals rather than looking at the year aggregately,” he explains. “We have a bell in the front of our office that rings for every 2,000 wristbands sold that day. The desire to hear it ring natu-rally fosters an intrinsic motivation in our staff on a daily basis, something that yearly goals don’t accomplish.”

The Business Expert Says: “This company already has a facility in China, which is really smart, but they have to make sure they keep fleshing out the roles of the employees here and over-seas. There are so many different ways to sell this item. I picture these being given out at a concert, and the head-liner tells everyone at the same time to light up their bracelets. I appreciate that they prefer to look at monthly revenue, because if you know what you’re mak-

ing in a month, you know what you’re making in a week, in a day. I also like the 2,000-unit bell and the scoreboards, so that employees are involved in the goal-making process. They were ahead of their own projections, so they do a good job with measuring. Their employee numbers also look solid.

“I would recommend a video to address the challenge of in-person view-ing. It can be two minutes or fewer, and they can show it on a loop at the trade-show booth while the sales reps have tablets that show the video wherever they are. They could have footage of a dark stadium, and then all the brace-lets light up at the same time. Even if they have to give away the bracelets, it would be worth it. This would be price-less marketing footage. Then they can repurpose the video on YouTube, Insta-gram and Facebook.”

Stay tuned for the next update on the three suppliers in SGR’s Survivor series in the May/June issue. Sara Lavenduski is associate editor of SGR, and its sister publications, Counselor, Advantages and Wearables.

A challenge Dan Wood has now is marketing his company effectively and getting the word out about his product.