Guerrilla Retailing: New Approaches For Profitable Directions

Guerrilla Retailing: New Approaches For Profitable Directions


My columns this time of the year usually include a look into the future, urging my readers to make New Year’s resolutions to help them grow their businesses. This year, I’m going to tell a true story about my friend David Greenhouse.

David bought his company nine years ago when DPI Specialty Foods, a large international company, spun it off. He had worked for the division since its inception, so it wasn’t a big leap. Or so it seemed.

Business was flat during the first five years David owned the company. At $2.5 million in sales, he wasn’t making a lot of money. Because he couldn’t afford good people, he had high turnover. There was no teamwork, no accountability, no goals, and no way to measure performance. The business wasn’t fun and David wasn’t able to be creative.

David hired Don Hodgkin, a business coach who helped him increase productivity, profitability, morale and employee retention. David started learning what his role as CEO should be. Don referred David to a new accounting firm where he found out about Doug Ehrhardt’s strategic planning retreats.

Each year, Ehrhardt facilitates three half-day planning meetings with David and his Board of Directors, which includes the managers of his sales, purchasing and operations departments, his accountant, director of personnel, and Coach Don. The team develops five key objectives for the year.

Their initial goals were to increase sales, improve the quality of the employees and reward employee performance. The mangers nailed every goal and doubled business to $5 million during the first year.

During the next year, a sense of teamwork emerged and team members began to understand the difference between entitlement and accountability. Despite abandoning one product category and a key distribution channel, sales hit $6.5 million.

This year, the objectives included implementing new software, absorbing serious price increases, purchasing and installing new equipment, and hiring a new salesman and a new controller. The company also adopted a statement of 15 values and is on track to reach $15 million in sales.

Since his people don’t need him to do their jobs, David is reenergized, no longer has to focus on the day-to-day minutia, and works fewer hours.

He described his “new job” as ensuring that he has the right managers and that they know what their jobs are and how to do them. He frequently meets with major customers so that he can develop new, innovative products and services for them. He meets with each manager every other week, and with the entire Board monthly to track their progress.

With more sales, David has been able to raise wages and add benefits. He pays the entire cost of a comprehensive health insurance plan for his 40 employees.

By now you’ve guessed that Rocky Mountain Foods isn’t in our industry. As a small manufacturer selling to the likes of Kroger and Whole Foods, David lives on razor thin margins that make yours look like a dream. His customers are demanding and there are plenty of other suppliers waiting to push his products off those shelves.

Their mission may sound simple, providing innovative and superior quality snacks that add little pleasures to life, but their business is every bit as tough as ours. His warehouse has thousands of ingredients like nuts, chocolate, dried fruits and seeds that go bad if not turned quickly. Each of his customers wants products designed to their individual specifications. He’s investing over $1 million in new roasting and packaging equipment.

David’s success came when he admitted he didn’t have the skills he needed to grow his business; when he invested in a team of professionals to help overcome his short comings; when he began to use a formal strategic planning process; when he empowered his team; and when he created a vision that his entire team could get behind and when he stopped managing and started leading his company.

The lesson here is to stop doing what you’ve always been doing with the same people you’ve always done it with. If you don’t have the skills internally to shake up your business and put it on track for growth, hire a coach or a consultant. See it as an investment, not an expense.

Develop a mission statement that tells your team, your suppliers and your customers what you do better than others. List your strengths, weaknesses, opportunities and threats. Develop objectives to take advantage of those opportunities and concentrate on those strengths. Create an action plan to reach those goals. Communicate your progress throughout the company. Reward successes.