Up to the Challenge?

Are you ready to take the next big step? Meet 3 entrepreneurs who got the chance of a lifetime to push past their problems and make their businesses boom.

Entrepreneurs are famous for being loners--committed individualists who seek neither advice nor approval from anyone or anything but their own vision of what their enterprises could one day become. But perhaps that reputation should be revised, because it's easy to find entrepreneurs who are actually ready and willing to accept help in overcoming the obstacles to achieving their goals.

Entrepreneur asked three company founders in three different industries and at three different sales levels to name the primary obstacles preventing them from reaching the next level. Then these problems were posed to panels of experts consisting of business advisors, consultants and experienced entrepreneurs. The problems and some recommended solutions follow.

SmartsCo: Building Better Distribution
In three years, Julie Tucker has grown her startup business to nearly $800,000 in annual sales and two employees, along with a raft of subcontracted designers and others. Last year, SmartsCo was a winner in the Make Mine a $Million women-owned business awards sponsored by American Express and Count Me In, a nonprofit organization supporting female entrepreneurs. Along with recognition, the prize included loans of up to $45,000 and a year of coaching. Now, the San Francisco entrepreneur says the main obstacle standing between her and $1 million in sales is building better channels for distributing the themed trivia games she publishes. Currently, SmartsCo relies on independent sales reps to market its products to bookstores and gift retailers.

"It's like herding cats," Tucker, 37, says of the six sales-rep organizations--fielding a total of 40 reps--that she deals with. "You find them, you sign them up and get them trained in your product, but they're never really working for you." Competition with reps' other product lines, lack of a large product line of her own and failure to land any big national retailer accounts are all problems Tucker cites with her sales-rep distribution approach.

Tucker is focused on the right problem, according to Carol Rehtmeyer, president of Rehtmeyer Inc., an Aurora, Illinois, toy development and manufacturing company. "The most important thing is distribution," she stresses. "You can create the most exciting product, but if you don't get it in front of the public, your product will die."

Rehtmeyer says Tucker will get more attention from reps and retailers if she improves the packaging, reduces the $17 to $25 price range, and considers boosting her product's value by adding samples of or coupons for related products. Co-marketing, such as a tie-in with Starbucks for her coffee-themed game, is another promising area.

SmartsCo needs a full-time employee to manage its network of sales reps, says Salt Lake City small-business consultant Kent Capener. Better yet, major account sales could be done in-house. Capener also recommends finding new retail distribution channels. The food, coffee, wine and beer games should be pitched to specialty store chains to be sold alongside the products the games are about.

SmartsCo's sex trivia game calls for a different approach. "We recommend SmartsCo considers selling this game to the public through direct-response television," Capener says. He suggests test-marketing on a limited scale, followed by a broader rollout if it proves successful.

Richard X. Zawitz, CEO of Tangle Inc., a South San Francisco, California, toymaker, wants Tucker to personally promote the company's products to retailers through industry trade shows. Commissioned sales reps can't be expected to bring an entrepreneur's knowledge and devotion to selling a company's product, he believes. "Sales is the key," he says. "To get sales, you have to go to gift shows."

Zawitz also recommends that Tucker look into new channels of distribution. On his list of possibilities are advertising specialties, business premiums and prizes, international markets and-again--co-marketing tie-ins with established retailers in the niches covered by the games.

Tucker says she already goes to several gift shows and has had some success with business premiums. The company has also hired a part-time person to oversee reps and try to reach national accounts. She resisted any suggestion that packaging or content required tweaking: "That's where our biggest strength is, based on what we hear from our retailers," she says. She hadn't thought of selling the adult-theme game through direct-response TV. The company has begun selling through its website, however, and Tucker speculates that a similar fulfillment mechanism would work with TV.

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This article was originally published in the February 2006 print edition of Entrepreneur with the headline: Up to the Challenge?.

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