Sweet Rewards

This story appears in the October 1998 issue of Entrepreneur. Subscribe »

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.

Joining Forces

In 1988, Ashley Ghegan moved to Atlanta and contacted King, an old University of Georgia classmate. For nearly a decade after college, they'd both worked for Delta as flight attendants; later, while King pursued a career as a travel writer, Ghegan married and retired to life as a corporate wife.

With Ghegan now living in Atlanta, the longtime friendship was soon in full bloom again. Then a strange twist of fate occurred: One day when Ghegan stopped by King's business to help out, Ann's partner accidentally caught her hand in a blender and later called from the hospital to say she wouldn't be returning to the business. The big surprise came when King and Ghegan found $100,000 in unopened bills in the partner's desk. Chalking it up to a breakdown in communication, King was determined to forgive and forget. Once again, she moved on--this time with Ghegan in tow.

Blooming Cookies' newfound indebtedness was overwhelming, and when King and Ghegan met with their CPA and other business advisors, they were encouraged to file for bankruptcy and "get real jobs." But King wasn't ready to call it quits. "I didn't want to stiff the people who had stood by me all those years," she says.

So King and Ghegan got on the phone and began calling Blooming Cookies' vendors, promising them $25 a week in payments. Eventually, says Ghegan, 46, "We cleaned up every [account] and garnered a lot of respect from the people that had believed in Ann."

Baptism By Fire

In 1993, a Saturday morning fire provided yet another opportunity for personal growth for the battle-weary pair of entrepreneurs. An arsonist had set fire to Blooming Cookies' premises, and it took nearly four hours for firefighters to contain the flames.

"What containment really meant," says Ghegan, "was that the entire building was leveled." With all the phones and computers melted--and the other building containing inventory damaged by fire and smoke--the situation seemed hopeless. King and Ghegan were numb.

As they watched the firefighters extinguish the last of the 40-foot flames that threatened their future, a construction foreman working at a nearby site approached King and Ghegan. "He pulled us aside and said, `Don't worry about who did this and why. Just worry about what you're going to do about it and how you're going to get through it,' " says King. "We didn't really know him. He was like an angel out of nowhere."

Although the partners were frustrated, they knew he was right. "We had orders going out that day for people from all over the country, so there was no way we could call them up and say we'd had a fire the night before so their orders couldn't go out," says King. The partners kicked into emergency mode, getting the telephone company to have their phones set up by mid-afternoon in a vacant building next door. They also located a bakery that was willing to help bake the cookies.

When local TV news reports announced that Blooming Cookies had burned down, King called in to say they'd be back in business on Monday. "So then they changed the news reports to `Blooming Cookies has burned but will be back in business on Monday,' " recalls King, "and everyone [began] calling in and ordering to help support us." Back in business within 36 hours of the fire, the persevering duo filled more than $5,000 in orders that day--the biggest day in the company's history at that point.

Fresh Start

In retrospect, the fire may have been a blessing for the company, says Ghegan. "This sounds a little Pollyanna-ish, but the fire really affected the way we did business. We were underinsured, so we didn't have the ability to restructure the way we were before. Instead, we turned our attention more to marketing."

Looking for new ways to grow, King and Ghegan contacted 1-800-FLOWERS and negotiated an agreement to help develop the 1-800-BASKETS product line. The relationship and the product line prospered. After two years, however, irreconcilable differences over the quality of the product line arose, and the relationship ground to a halt.

A later partnership with FTD involving eight Blooming Cookies products in an FTD test catalog did well--until FTD was sold and the new owners decreed that FTD would strictly sell flowers.

It hurt to lose FTD, but King and Ghegan were narrowing in on a problem. "We were aligning ourselves with people who, for all practical purposes, were competitors," says Ghegan, "and we weren't clear about what a partnership ought to look like.

"When we started talking to Kodak, it was probably the first time we actually aligned ourselves with a company we [could work with] in a very symbiotic way." The partners expect the link with Kodak to exponentially multiply Blooming Cookies' ability to grow--through sublimation imaging technology.

A quantum leap beyond the hand-painted art that adorned Blooming Cookies' original customized gifts, a Blooming Cookies customer now has the option to provide a personal photograph--over the Internet--that will permeate the ceramic surface of the cookies' flower pot. The method also means faster service--same-day production if the order is placed by noon.

Today, everything is coming up roses for these tenacious Southern belles, who just may have redefined the image. "We had an industrial engineer here today working with us on how to set up the company to grow the business to $10 or $12 million," says King, who estimates 1998 sales at $3.3 million. "We're at the point where we know we've got to go to the next level, and we want to make sure we're ready for that."

The byproduct of their success story? There's been some letup in the entrepreneurs' schedules. Says Ghegan, "We're working on our golf games again."

Contact Sources

Blooming Cookies Catalog Co., ann@bloomingcookies.com, http://www.bloomingcookies.com