Blogging

Today, I stumbled across a blog questions by Carolyn Deason, from San Antonio, Texas on CNN.com's website. She posted:

I got lucky and showed my shirts to Wal-Mart locally. They love them, and one store has already ordered $2,700 worth of shirts and plans to order more this month. Other stores wish to order as well. I am a home-based business, very small, in business less than a year. Wal-Mart pays their invoices net 30 and requires me to tag the shirts with bar codes. Once I am in their vendor system, I can sell nationally. It’s a great opportunity, but how do I afford the initial expenses to do business with Wal-Mart? It will run close to $6,000 to pay for manufacturing, printing, bar codes and tags.

Here is my reply to her post:

Before any advice is given, I think a statement of CONGRATULATIONS needs to be made first to you. Getting your product into a chain like Wal-Mart is very impressive in my opinion. Next, I believe your worries about the startup capital required for you to do business with Wal-Mart needs to be put aside for a moment. Instead you need to concentrate on the relationship you are about to make with one of the largest retailers on the face of the earth.

Education about your customer will be key to growing that relationship. I agree with I couldn't agree more with the statements of Charles Fishman – research and contact other owners/managers of small suppliers to Wal-Mart. Learn from their mistakes and profit from them! My advice – take the phone call one step further – if you can try to set up a face-to-face meeting where you are taking the person to lunch or dinner so that you can get their full attention on your questions. Have your list of questions prepared before you meet, and go over as many as possible. Put them in order according to importance.

After you have all of the research complete, then you can build the plan of how you are going to supply your product to Wal-Mart. The first steps providing locally, should not be too difficult to plan out, you know your business – how you manufacture the product and you know what the requirements are from the store – bar code system, etc. Take advantage of this planning by going four more points of growth. First - what would it take for you to supply to all the Wal-Mart stores in a 100 mile radius? Second – what would it take for you to supply all the Wal-Mart stores in your state? Third – What would it take for you to supply all the Wal-Mart stores in a Geographic region of the US (Mid-west, Northern US, Southern US, etc)? Finally – What would it take for you to supply all the Wal-Marts in the US?

While the last question of planning is a little out there, you should run the total projections for all these points of growth. You need to know what your projected sales growths will be for any of the three stages, what your projected revenues vs expenses will be, etc. All the core foundations of a good business plan should be in place.

If you are now going, but I don’t have an MBA or a degree in Business Administration, I get lost in all of the numbers and such - you need not panic here. First, there are free services out there like SCORE. SCORE "Counselors to America's Small Business" is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA). Their website is www.score.org and there is a ton of useful information there. Secondly, Small Business Association, www.sba.gov is also a great resource for helpful tools and possible financial planning strategies. Finally, there are business consultants like myself that can assist in growing your company whether it be in regards to planning, growth strategies, marketing strategies, or IT infrastructure strategies.

Again, congratulations! You have achieved more than you think, don’t be scared by the challenges that lay ahead, thrive with the opportunity that is facing you!

Regards
Mike Holland
Managing Partner
Net-Flow Solutions
www.net-flowsolutions.com
http://netflowsolutions.blogspot.com/