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Sweet Rewards

Fighting their way to success is business as usual for two tough cookies.

Neither inexperience nor arson nor a string of not-so-strategic alliances could close the doors of Blooming Cookies Catalog Co., the Atlanta-based gourmet gift service that today boasts nationwide distributorship and a blossoming Internet partnership with photo giant Kodak.

Its customer service motto--"Yes is the answer. What is the question?"--hints at the dauntless drive that has fueled Blooming Cookies to annual sales of nearly $3 million. "We liken ourselves to that little windup toy that keeps hitting the wall until it finds a way around it," says founder Ann King of her and partner Ashley Ghegan's work ethic. "That's who we are."

While watching a TV program one morning in 1984, King, 46, was impressed by the featured product, long-stemmed roses--unique in that they were made of chocolate--and an idea was born. "I thought cookies would make an even better product at the end of the stem," says King. Drawing on a creativity she didn't know she possessed, King headed to her local crafts store.

Packaged for maximum presentation value in a florist's long-stemmed bouquet box, King's creation was an easy sell to local businesses on the lookout for innovative gifts for clients. King made deliveries in a white chef's coat and hat with pink striped pants "just to get attention."

By entrepreneurial standards, King was off to a great start--complete with the lessons only experience can teach. "I'm from Columbus, Georgia, and everybody trusts everybody down there," says King. "I was not prepared for the business world." Soon, her inexperience started to show.

The business was growing, but King couldn't afford to purchase her own commercial oven, so she contracted with a small bakery in Smyrna, Georgia. "I didn't have it in writing at the time that my recipe was proprietary information, so they sold it to another company they were working with," King says. And not just any company, says King: "Today, when you stay at a [nationally recognized hotel chain] and they give you a hot chocolate chip cookie that says on the bag, `We got this recipe from a little bakery outside Atlanta, Georgia,' that's my recipe."

A little sadder, but wiser, King forged ahead. A deal with a local radio station to give away King's products on the air required her to find a retail space for her enterprise. "I couldn't have people come by my house to pick up their prize," she says. She signed a lease for a 500-square-foot space tucked away in a small shopping center.

King's real estate agent was quick to quell her fears about her new location. "[He said,] `Don't worry about the lease. If you're not successful, we'll let you out of it because we don't want you here if you're not doing well,' " recalls King.

Not only did the shop's roof leak, says King, "but you could have shot a cannon through [the shopping center] at any time of the day and not even come close to hitting anybody. There was no traffic. I learned later that you don't go into a shopping center unless it has an anchor, like a large grocery store, to bring in traffic."

As the lease ran its course, JC Penney Co. approached King about doing a large promotion for Mother's Day. Customers would receive a cookie-filled flower pot that said Happy Mother's Day on it. Pricing was an issue, and King sought advice from her accountant. Don't worry--just sell the heck out of the product, he said. Not satisfied, King turned to a banker friend. "She came up with a pricing structure and said that if we sold the flower pots for $2.50 apiece, we'd make $20,000," King recalls.

But there were unexpected costs King and her banker had not figured into the equation. "We had to rent freezer trucks [to ship the pots] to Tampa and Jacksonville," King says. "I had friends driving these cookie pots everywhere." When the actual cost of making 5,000 flower pots turned out to be $5 each, she lost $20,000 on the deal.

It wouldn't be the last time someone "in the know" would advise her poorly. "I at least had sense enough to know that I didn't know what I was doing," says King. A visit to two local small-business assistance centers left her frustrated when neither counselor she met with could grasp her business concept.

Being left to her own devices proved a winning formula, however, as King began to navigate her company as she saw fit. Within the year, Blooming Cookies was growing like a weed. Yearning for more freedom to pursue the creative side of the business, she took on a partner with extensive retail management experience to handle the company's finances.

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Sweet Rewards.

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