How a Health Setback Inspired This Entrepreneur to Adopt a New Business Model

How a Health Setback Inspired This Entrepreneur to Adopt a New Business Model

A shopper’s best friend: Lisa Kornstein of Scout & Molly’s.

Image credit: DL Anderson
This story appears in the April 2015 issue of Entrepreneur. Subscribe »

Soon after Lisa Kornstein received her master’s degree in higher-education administration, she was on vacation with her boyfriend, looking out at the ocean and dreaming. “Someday,” she said, “I’m going to open my own boutique.”

It wasn’t a new dream. She’d enjoyed working in a clothing store during school, and she hadn’t been quiet about her ambition. In fact, her boyfriend had heard it one too many times. “He looked at me and said, ‘For the love of god, stop talking about it and just do it!’” Kornstein recalls.

It was the jolt she needed. The Raleigh, N.C.-based entrepreneur wrote a business plan, found a space and, less than four months later, opened her first Scout & Molly’s clothing store (named after her dogs) in 2002. The idea was simple: an unintimidating boutique with contemporary women’s fashions, designed to feel like you’re rummaging through your stylish best friend’s closet. Kornstein would personally guide customers through the store, helping them assemble the perfect outfit with pieces from brands like Autumn Cashmere, AG Adriano Goldschmied and Halston Heritage.

But she began having health problems, and in 2008 Kornstein was diagnosed with multiple sclerosis. The fact that she would often miss weeks of work or have to go home sick was influential in her decision to franchise; she designed a semi-absentee model to appeal to others who may be ill or can work only part time. 

Since she started the program last year, five franchises have opened in the Southeast and several more have been sold, including five that are slated to open this spring and summer. She talked to us about how she manages her disease while building her fashion empire. 

Were you always into fashion?
Oh no, I was a total tomboy! My mother used to be so put-together, and I would try to make my own fashion statements by wearing red cowboy boots or a scarf as a belt.

What changed?
In grad school I’d walk my dogs past this boutique, and I became good friends with the owner. She eventually asked me if I wanted to work there—I started, and I loved it. Women would come into the boutique and feel intimidated, and I realized I had the ability to put them at ease and give them a good experience. It was magical—they’d come in anxious and leave happy. It became a passion for me, and making sales was addicting. 

I try to be very honest as a salesperson. If something doesn’t look good, I don’t want to lie to the customer. 

How does the semi-absentee model work?
When I accepted that it was possible to have employees invested in my success by incentivizing them and paying commissions, I knew it could work. We create a culture so it doesn’t feel like a job. If you have employees who truly care about the store, then the semi-absentee model is possible. Anyone who thinks this is “just a job” has to go—we can’t afford to have people like that in our brand. The franchisees also hire very strong managers, and we give them tools so they can monitor the store and choose inventory remotely.

How did your MS diagnosis affect your business model?
Before I was diagnosed, I was in the store all the time, six days a week. Then I had this disease and I had two small kids at home, and I had to take significant time off. It was really emotional for me. As an entrepreneur, it’s really hard to delegate, and I’m an admitted control freak. I had to learn to give up control and put my business in the hands of someone who has been trained and educated properly. 

I don’t think there’s any way I would have been receptive to franchising without MS. No amount of money would have made me think franchising would work. The diagnosis made me retrain my brain and think about everything differently. I was open to new ways of running the business. It was hard at first, but as a mom and business owner trying to keep all those balls in the air, I couldn’t continue going on like that. Without MS, I would have never changed. It was the best worst thing to ever happen to me.

Edition: November 2016

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