Denial About Financials Leads to Failure
The husband-and-wife team behind a struggling ice cream manufacturer enjoy the perks of being owners but won’t apply that enthusiasm to managing their finances.
A private-label ice cream manufacturer on the Texas Riviera—Lucky Licks—had a solid few years of sales, but its profits are rapidly melting away. The $5 million business is no Ben & Jerry’s, and the owners, a married couple named Jack and Jessie, are cash broke.
When the couple started the business more than 10 years ago it was their dream to sell a homemade product they loved and believed in. That enthusiastic approach is a good start for any company, but it has nothing to do with whether a business fails or succeeds. That’s a mistake thousands of business owners make: They think having a passion or a dream is the only recipe for success. But they’re missing key ingredients, like financial controls and a disciplined plan for profit.
Because Lucky Licks’ product is good, sales are good. The husband-and-wife team are meticulous when it comes to quality control. They take pride in what they do every step of the way, from using the finest ingredients to making sure the product is fresh. Although their top-line sales are in the millions, they are still losing money. Why? Because they didn’t want to face the day-to-day financial realities that go into making a profit.
Complete article on businessweek.com
Behind Coors’ color-changing beer cans
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As an undergraduate at Cornell University, Lyle Small annoyed his housemates by spending days on end painting their Ping-Pong table in rainbow shades of ink. He brewed chemicals to create inks that changed hue when exposed to light and heat.
“I got obsessed,” says Small, now 41. “I thought all printing inks should change color.”
Two decades later his passion is paying dividends. Small’s Colorado Springs company, Chromatic Technologies Inc. (CTI), is booming while rivals in the ink industry are cutting back. Music distributors, foodmakers and the beer giant MillerCoors are using Small’s color-changing ink to make their packaging stand out. CTI landed 120 new customers in 2008. Small expects sales to double this year, to $10 million.
Thanks to CTI’s ink, the mountains on Coors Light cans turn blue when the beer reaches optimal drinking temperature (roughly 43°-50°F). Coors (TAP, Fortune 500) already used color-changing ink on paper labels for bottles, but the brewer had struggled to find a contractor that could create the same effect on cans. “CTI is the only one that delivered,” says Ray Toms, a MillerCoors scientist who worked on the project. MillerCoors signed a two-year contract to buy all of its ink for cans from CTI. The beer company will account for 40% of Small’s revenue this year.
The deal took persistence. When CTI first approached Coors in 2001, Small couldn’t guarantee that the ink would work in high-volume production. Coors printed 20 million cans of Coors Light every day; any downtime would be costly. So Small arranged painstaking tests in canning factories in eight countries. Three years later he was ready to ink a deal.
The brewer’s faith has paid off. Amid flat beer industry sales, Coors Light saw 3% growth this year. The color-changing artwork is prominently featured in the company’s TV ads.
The Bar Code Is Taking a Leap Forward
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The new symbols, called GS1 DataBars, can store more data than traditional bar codes, promising new ways for stores to monitor inventory and for customers to save money.
One use of the symbols will be in sophisticated coupon offers that combine deals on multiple products, said Jackie Broberg, who leads coupon control management at General Mills in Minneapolis. A single coupon, for example, could offer discounts on three separate items like eggs, bacon and biscuits, all in one transaction.
The next use of DataBars at the supermarket will probably be for goods bought at the delicatessen counter, and for fresh meats and poultry, said Stephen Arens, director, industry development, at GS1 US in Lawrenceville, N.J. GS1 US is the trade organization working to move the DataBar standard forward in the United States. A poultry DataBar, for example, might contain not only the price and product category, but also a sell-by date. If a consumer chose an outdated package, the label would alert the cashier at checkout.
In the future, coupon bar codes will probably be read less from strips of paper, and more from cellphones that people hold out for scanning by the cashier.
Samplesaint Inc., a mobile marketing company in Chicago, for example, has developed technology that lets supermarket scanners pick up the image of a coupon bar code directly from the display on a cellphone. In Samplesaint’s system, coupons are sent directly to consumers’ cellphones by text message. The coupon’s bar code is small enough to fit on the screen of any mobile phone, said Walid Johnson, director of research and development.
Collapsable Milk Jug Makes Milk Last Longer
A young designer solves the eternal problem of making the milk last as long as you need it.
The James Dyson Awards, a sprawling event that garners thousands of entries from design students the world over, is a pretty phenomenal wellspring of ideas–the short list runs into the hundreds. Treehugger points us to one concept we hadn’t seen: A collapsible milk jug that makes the milk last longer.
The designer–who has to remain anonymous for now, since the contest isn’t over–points out that plastic milk jugs basically foment milk spoilage, because they trap air in the container. And that’s what the concept, Fresh, fixes. As the milk level gets lower, you collapse the container bit by bit, to prevent undue air exposure. The designer claims that experiments show that the milk lasts a week longer as a result.
A product like this could be a huge boon to other countries: To save plastic, Canada and parts of Europe require offer milk sold in plastic bags, which the users take home dump into permanent containers. And that, apparently, makes the milk go bad even faster than it would in a plastic container.
11-year-old entrepreneur uses his business skills in Shallowater
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Eleven-year-old Levi Stinson is Shallowater’s youngest entrepreneur. He sells flavored ice treats in the summer, and he works just about every day from noon until 4 p.m. His business is in Shallowater, and it’s called Shallow-Ice.
Stinson says he makes a profit, “Sometimes I make $60 a day, sometimes $30.”
What it takes to make money, growing mushrooms
The shiitake mushroom wasn’t grown in the U.S. until the late 1970’s. Before that they were imported as dehydrated mushrooms from China. But we found out some people in the Chippewa Valley are now making money, by growing their own shiitake mushrooms.
Deidra Barrickman has been growing the full flavored mushroom for 12 years on a small plot of land east of Eau Claire. She says what started out as a hobby — has grown into much more.
She says her patch has grown over the years, “This is probably around 800 or 900 logs we have now.”
The process starts in the winter when new logs used to grow the mushrooms are cut down. Then several dozen holes are drilled in the logs and shiitake spores are injected. She says, “As you can see, they’re kind of labor intensive.”
After that she says the logs have to stay well hydrated throughout the summer — creating a mini tropical forest. She says, “The shiitake is native to the jungles of Asia. So they do like heat and humidity — when we like being in the air conditioning — they’re growing fast.”
The more hot and humid it is — the more mushrooms Deidra can sell at the farmers market. She says last week she sold between 35 and 40 pounds at $10 per pound.
New Entrepreneurial Culture Taking Hold in New Orleans
IRVINE, Calif., July 28 /PRNewswire/ — With thousands of new jobs and tens of millions invested in business development in New Orleans, Entrepreneur takes a first-hand look at the city’s emerging entrepreneurial culture. The August issue’s coverage finds New Orleans to be another example of how entrepreneurship remains essential to economic recovery, particularly as troubled cities across the country search for a revival.
Four years after the more than 50 levees and floodwalls gave way during Hurricane Katrina, business owners are rebuilding New Orleans’ economic lifelines in a spirited environment flowing with creativity, community, mentorship and collaboration. Dozens of support organizations and incentives are contributing to the uprising with evidence of real results: The April unemployment rate for the New Orleans metro area was 5.3 percent, compared to the nation’s 8.9 percent.
“While known for its creative roots, New Orleans is fast becoming a business mecca as well, drawing innovative companies in everything from digital media to film, fashion, technology and more to find their place in the city,” says Amy Cosper, VP/Editor in Chief of Entrepreneur. “Business owners are brimming with invention and entrepreneurial energy after the clearing away of previously embedded industry and practices.”
To watch a video with local business owners discussing how entrepreneurs are leading the economic recovery, visit www.entrepreneur.com/neworleans.
