Black Enterprise — March 2013
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Small Biz
Carolyn M. Brown

FRANCHISE OPPORTUNITIES

Thriving in a Slow Economy

Former Army cook creates recipe for success with Edible Arrangements

ONE NIGHT WHILE WATCHING THE TELEVISION program The Big Idea with Donny Deutsch, Maurice Welton was intrigued by a segment on Edible Arrangements founders Tariq and Kamran Farid. Edible Arrangements, which has more than 700 owners and 1,000-plus stores, is known for its fresh fruit bouquets hand-sculpted to look like flowers, ranging from $30 to $150. But it would be a few months before Welton would pursue the franchise concept. After moving to south Texas from New Orleans, he opened his first Edible Arrangements location in McAllen, Texas, in 2007—the franchisor's first store in that locale. "I was displaced by Hurricane Katrina and McAllen was where I decided to start over," he explains.

Today, he owns and operates three Edible Arrangements locations. The second and third were opened in 2010 and 2011, with a fourth store slated to open later this year. Despite naysayers who believed fruit on a stick would not sell in a state full of meat eaters, Welton has increased revenues annually to roughly $1.2 million collectively for his stores and he has provided jobs for about 15 people. In fact, Welton was recently named one of the top five small businesses in McAllen by the City of McAllen's Chamber of Commerce and received the President's Award from Edible Arrangements CEO Tariq Farid.

"There are a lot of minorities who are like I was and would like to get out of the corporate scenario and go into their own business," says the 42-year-old veteran, who has degrees in culinary arts and food service management and an M.B.A. from the University of Phoenix.Because it is food-based, Edible Arrangements was an easy choice for Welton, who worked in the food industry for more than a decade. He could also apply the managerial experience gained in the Army to running the business. The disabled veteran served the first four years in the military as a cook and the last two years as a food inspector. "Edible Arrangements was the perfect blend of still being in the food arena, but not having to cook or run a restaurant," he says.

Welton took advantage of the franchisor's $10,000 discount off the initial $25,000 franchise fee for veterans. Qualified franchisees must have business acumen, the ability to manage staff and resources to successfully grow multiple locations, and have a net worth of $500,000. Owners also must participate in a comprehensive three-phase training program in all aspects of system operations as well as administrative procedures, sales, and marketing.

Welton's Edible Arrangements stores have all thrived despite the economic downturn. "During a down economy, you have to pinpoint what works and what doesn't. In my case, I planned every night what I needed to do the next day. I networked with everyone I could, locally and long distance. The McAllen Chamber of Commerce really gave me a big boost," he adds.

Convincing people to pay the same price point in Texas as in New York was one challenge. "We had to get people to understand that there was value in paying $50 for an arrangement." But his biggest challenge was maintaining efficient inventory. In any place of business where perishable food products are sold, inventory control is critical. Each perishable item represents a temporarily unrealized profit. If an item spoils or cannot be used due to inefficient inventory management, the profit is lost.

The key in spoilage prevention was to pay attention to the condition and shelf life of Edible Arrangements strawberries, melons, and other fresh fruits during their storage period. Welton used a software program to track and time stamp goods with an expiration date. He continues to do projections for the next day, week, and month to determine how much inventory to order and carry. Big purchases are done only as needed, says Welton, noting that the holidays are the busiest times of the year, especially Valentine's Day and Mother's Day, each of which may call for 1,000 arrangements compared to the 50 arrangements daily on average.

In addition to inventory control, Welton stayed on a tight operating budget, making sure he saved and never overspent on anything—himself included. To grow business he utilized his three R rule, "'R to the Third Power' as I call it: recruit, retain, and recycle.Recruiting is marketing the business. Whatever way I could work my way into the door—from anniversaries to weddings to birthdays—I would talk about it and try to get the buzz out there," he explains. Retaining customers is about sending thank-you letters back to the senders and the recipients of Edible Arrangements and offering $5 off their next purchase in hopes of bringing them back to the store. Recycling involves referring customers to other neighborhood stores. "I like the idea of carryover traffic and recycling customers back to other businesses so the whole community can survive."

Welton's military experience has proved invaluable. There is no such thing as "mission failure." It's simply not an option, he says."So, you do whatever you have to do to succeed. That expectation of success taught me fortitude and discipline and it gave me a never-quit mentality."

Marching forward, Welton will introduce new items, including whole pears, oranges, and fruit baskets to be shipped across the country. Also in the works is an Edible Arrangements kiosk that will open at one of the largest local malls in the second half of 2013. He plans to set up three kiosks within the next 18 months.

"In the military we were taught to always set our sights two ranks higher than the level we were at so that we were always raising the bar for ourselves," says Welton. "Once you've set your sights, you go out and make it happen."

CAROLYN M. BROWN’S TIP OF THE MONTH

Creating a Mobile Site

With 75% of customers preferring a mobile-friendly site, you may want to give some thought about your business having a mobile presence. A great starting point is Google GoMo (www.Howtogomo.com), which provides a wealth of resources to help you create, test, and optimize a mobile site. Check out the Why Go Mo section to view case studies and best practices. Use the GoMo Meter for a preview and an in-depth analysis of what your website looks like on a mobile device. A mobile site can cost from $0 upward to $50,000, depending on if you just want to create a do-it-yourself mobile version of an existing website for free or develop custom content and additional versions for mobile phones and tablets.

5 Ways To Attract Customers

Make enhancements to products and online experiences in response to customer feedback

NO BUSINESS—SMALL-, MEDIUM-, or corporate-sized—stays on top by being complacent. Increasingly and across many sectors, elevating revenues and income means more than just providing better goods or services than your competitors.Key is communicating your brand's expertise clearly, efficiently, comprehensively, and immediately—with updates and tweaks—to customers whether they are consumers, retailers, or wholesalers. That's where, naturally, the Internet has proven to be an incomparable resource to reach and teach a buyer or potential customer that you have the best product offer.

Since 2007, J.D. Power and Associates has ranked the 12 largest U.S. credit card issuers in customer satisfaction. One company has topped the list each year: American Express.Doris Daif, vice president of global digital customer experience, says that achieving and maintaining digital customer trust and respect is continually upgraded at American Express. Those tweaks can be modeled by entrepreneurs in other industries to upgrade their own businesses. American Express, which has highly engaged customers, uses social media to solicit Web-tweaking suggestions and feedback.The card company receives more than 20,000 responses per month and roughly 75% take time to comment on their experience. In late 2011, AmericanExpress.com began beta testing its own upgrade.

The company simplified navigation, enhanced the search capability, and made the page more user-friendly."It all begins with service. It is always about the customer.The entire thing goes back to being available 24/7, as customers won't wait around, and [customer] decisions are made at lightning speed," says Daif. Be aware that customer involvement drives and informs the interactive process and experience.

Daif shares American Express’ knowledge about how to keep customers:

1 Remember to go slow, to go fast. Companies must know as much as possible about their customers’ product or service needs, buying power, and what they really want to do. That insight will determine whether your business succeeds or fails.

2 It’s not enough to simply hear what customers say, you must actively listen. Digital feedback has to be sought and captured continually. If possible, customer satisfaction survey requests should be made within 48 hours of their purchasing a good or service and need to be as brief as possible to make it easy for users to respond. Place a very visible button on the site for customers to express their opinion.

3 Discard the perception that phone calls have more of a personal touch. Today’s customers interact digitally where information and feedback should be fast, firm, and flawless. They are increasingly using the Internet and mobile devices to access information as well as digital offers and to make buying decisions.

4 Do not outsource your company’s connection to customers. Small business owners must know who they are, and be intimate with their users and what they want. Also, a company’s website must reflect the spirit, philosophy, knowledge, research, and mission of the company. Personalize your interaction with customers.

5 Invest as much in the back office as in the online design. The back office is where your company has data and insight on its customers as well as the technology required to make interactions fast and friction-free. Your website may have bells and whistles to attract customers, but once they click, what information, goods, or services will they find useful?

—Frank McCoy

Easy-to-Use Customer Feedback Tools

SurveyMonkey.com is an online survey tool that allows you to collect data via Web link, e-mail, Facebook, or embed on your site or blog. You can also create customer surveys to post on your site. Price: free to $65 per month.

GetSatisfaction.com provides an app to build online communities that enable customers to offer feedback, ask questions, share ideas, report problems, and get help with a product or service. Price: free to $99 per month.

Feedbackify.com is a website widget that allows you to create a custom form to receive feedback from website visitors and to get information on your customers. A dashboard lets you view feedback in real time. Price: $19 per month.

Facebook.com is a tool to initiate a dialogue with followers using your status update. Through the Facebook Developers platform you can install a comment box plug-in on your site, providing customers with an immediate space to give feedback. Price: free.
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