OUTDOORS WITH DR. JOHN WOODS: Death of a small outdoors business
by John Woods
Published: February 3,2012
Without naming names this is still a story to tell. It’s not about failure or bad business decisions or even poor management. It is more about market forces, constrains on running a small business, underfunded operating capitol, a prevailing “mom and pop” operating philosophy, knock off brands, and watching competitors outright stealing your product ideas and selling them cheaper than you could manufacture them yourself. Such is the plight of many outdoors related small-business operations.
Initiating the Dream
Many outdoors recreational businesses started from an interest in a hobby or a passion for the outdoors and the love of hunting or fishing. A number of Mississippians have become rather noted for having followed this pathway. Among this group is Preston Pittman, a barber who loved to turkey hunt and starting making calls for friends. Toxey Haas worked in the marketing department of Bryan Foods in West Point before one day while hunting he grabbed up a handful of dirt and formulated the start of Mossy Oak Camouflage. Will Primos loved to hunt and created Primos Calls as a result of his love of the sport. All of these stories are well established history now. Each continues as a thriving business concern.
In the case of X-Company about which this story is told began much the same way. The base business was well established in its field, but the son wanted to branch out into a completely different direction. He was a fisherman and a hunter who knew he could produce a line of outdoor hunting accessory products in the same shop environment as his parent’s business. The concept was a good one. He decided to make a try at living out his dream concept.
Dream to Reality
From the get-go X-Company was underfunded in terms of essential cash flow. Materials had to be purchased, manufacturing personnel were shared with the “parent” company when they had slack time. Packaging had to be developed and ordered. Marketing and sales materials had to be developed and printed. Start up costs is probably the No.1 strain on a new business. All this had to be done in a finished capacity before the first product was sold and stocked on a dealer’s shelf. That meant all the money was outgoing with none coming in until the first sale.
Meanwhile the owner of this new venture (in his spare time) was out pre-selling the products to outdoor stores. He first targeted the larger hunting and fishing stores in the Metro Jackson area and was quite successful. He was highly encouraged and continued to branch out in his sales calls being mindful that going on the road was an expensive activity, too.
The initial cornerstone of the success of X-Company and their hunting products was the product niche, design, and the quality of the finished product. Next, was the face-to-face sales ability of the guy who dreamed all this up. He connected with outdoors retailers and hunters alike. He spoke their language. He delivered good products on time at a fair profit margin.
As time when on X-Company earned its reputation in the outdoors marketplace. The owner traveled to national shows to display his product line and take orders. For years he attended the largest national outdoor hunting show — the SHOT Show — in locations such as Las Vegas, Houston, Orlando and others. Retailers and wholesalers all over the country recognized the brand and company name as well as the owner. Business was good and growing.
The Inevitable Downturn
As the business rocked on so did expenses. Material costs increased as did labor costs. A huge decline in the hunting market had its impact, too. Retailers went later and later into the year to place orders due to their own cash flow issues. This meant X-Company was always in a bind as to what to produce for stock balanced against what might sell later in the year. Some orders came in at the very last minute pressing production and delivery times. Business was getting unpredictable and that can spell a death warrant for a small business operation.
Then came the biggest shock. At a regional outdoor show X-Company noted a display of products nearly exactly like his own being marketed by a new competitor just over the state line. The designs were all too familiar. Without a company name tag on them they looked exactly the same. The only difference was theirs was cheaper. Cheaper too, because the inside tag noted the items were made off-shore where labor costs were a fraction of the manufacturing expense. How was X-Company going to fairly compete with this blow?
As the entire American economy began to slow, so did sales. Consumers wanted to buy product but were willing to buy items cheaper in quality for a lower price tag. X-Company even looked into the legal infringement issues by the competing company, but the bottom line was they had very deep pockets able to easily defend a legal battle. X-Company did not.
Long story somewhat shorter, X-Company eventually had to fold shop. Left with a huge loan and other expenses the owner’s only alternative was to return back to helping the family business to work to offset the debt.
The irony of this story is that today the son has taken over the original family business and the parents have retired. His business volume and income are probably ten times or more than his best years operating X-Company. Even so, that was a dream in which the light died out. He learned a great deal from the experience. It makes him a better businessman today.
In this country and this state individualistic entrepreneurism is one of the fastest growing business sectors. Most of the creations of new jobs in today’s economy are coming from the openings and operations of all kinds of small businesses. Still the failure rate is astonishingly high. The best part is that many people still want to live out their dreams. And that is what America is all about.
John J. Woods, Ph.D., is vice president in charge of economic development and training, Eagle Ridge Conference and Training Center, the Workforce Development Center and contract training services at Hinds Community College in Raymond.
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