Nashville business owner Karen Griffin has been given a shot at the holy grail for a small cosmetics company — a chance to work with Fortune 500 retailer Macy’s.
This week, Griffin is leaving for New York to participate in The Workshop at Macy’s, a training program that teaches women and minority entrepreneurs how to position their products to be sold at major retailers.
“We want to succeed in this market and we want to be a prestige brand,” said Griffin, CEO of Real Chemistry. “Macy’s has built us a bridge.”
Real Chemistry products are already available at several smaller retailers, but a deal with Macy’s would be a huge break, said Griffin.
There’s no guarantee that Macy’s will ultimately carry Real Chemistry products in stores, Griffin said, but that first point of contact is crucial. Already, she said, she has benefited from a relationship with the retailer.
Griffin applied to the Macy’s workshop in 2011 but was rejected. She says she received positive feedback about the product in the tube — a peel that removes dead skin without acid or exfoliation — but other aspects of the merchandise needed work. Griffin maintained contact with a Macy’s senior vice president who guided her through repackaging and line expansion ideas.
“I’m nobody in his world — he absolutely did not have to pick up the phone, but he did, and he advocated for me,” Griffin said.
This year, out of 11,000 applicants nationwide, she was one of 16 companies invited to take part.
Griffin left a long career in the health care industry to start her own business three years ago. “I spent 22 years with Fortune 50 companies. I don’t even think at the time I fully appreciated how lucky I was that I had the privilege of working around America’s best and brightest,” she said.
More than 60 businesses have been through The Workshop at Macy’s since it launched in 2010. Small businesses accepted into the program have no obligation to work with the retailer in the future, but a few have. The program gives Macy’s access to new products to sell.
“We’re looking for the next great thing,” said Shawn Outler, a vice president at the company.
Unlikely pairings of large and small companies like this are making a difference for small businesses, which often struggle because of a lack of funding or business experience. About half fail within the first five years. Some large companies are coming to the rescue by providing mentorship, formal instruction and cash in the form of loans or prizes to help give small companies a leg up.
For the big companies it’s not just about being nice. Giving back can polish their reputations and may even boost profits. People are more likely to support a company they know is giving back to the community, says Scott Davis, chief growth officer at brand and marketing company Prophet. Working with smaller companies also exposes the big brand to the customers of the small business, according to Davis, as entrepreneurs are likely to talk to their customers about a company that helped them when they were starting out.
“Storytelling is such a big part of brand building today,” Davis said.
Lighting a path
Investment bank Goldman Sachs helped Ryan Walsh see his electrical company’s future. Walsh, who took over New York-based Walsh Electrical Contracting from his father, was accepted into the Goldman Sachs 10,000 Small Businesses program, which provides a free business course, spread out over several weeks, for entrepreneurs. Walsh says it forced him to come up with a five-year plan for the business.
Another benefit is networking. One business owner in the class hired Walsh’s company to install lights and electrical equipment. Walsh paid another classmate to redesign his company’s website, brochures and business cards. And a restaurant owner from his class now caters Walsh’s lunch meetings.
“You meet some good people,” he said.
Many of the small businesses that have participated have had good results. Sixty-four percent of 572 small businesses that have completed the Goldman program said they increased their revenue six months after graduating, and 45 percent added new jobs, according to a survey conducted by Babson College. Babson, a business school in Wellesley, Mass., helped develop the program.
“It’s like a mini-MBA,” said Nneka Mosley, who owns Philadelphia-based Nneka Saran, which makes colorful purses and leather bags. Mosley applied for the Goldman Sachs class through the Tory Burch Foundation, which partners with the investment bank. The foundation, launched by high-end fashion company Tory Burch in 2009, helps women entrepreneurs secure loans and offers mentoring.
Dina Powell, president of the Goldman Sachs Foundation, says the initiative helps the bank recruit and retain workers. Recent college graduates want to work at companies that have programs that give back. It helps attract “the top talent that we want,” Powell said. Employees at the investment bank are able to offer business owners advice and feedback. Powell says there are hundreds of Goldman Sachs employees on a waiting list to participate.
Nashville-based Pathway Lending, which provides underserved small businesses with lending and educational services to spur economic development throughout Tennessee, received $2.2 million in new loans and grants through the initiative.
Pathway officials said the funds would be leveraged with additional public and private resources to increase available capital in Pathway Lending’s Tennessee Small Business Jobs Opportunity Fund. The money also is being used to enhance Pathway Lending’s educational services technology platform by developing an online resource center for prospective business owners.
Taste of success
When the owners of ice pop maker Brewla Bars are in need of business advice, they email a contact at Boston Beer who connects them with an employee who can help them out.
Brewla Bars, started by New York-based siblings Daniel and Rebecca Dengrove in 2011, became involved with the maker of Samuel Adams beer after taking out a $10,000 loan two years ago from its Brewing the American Dream program. They used it to help pay for packaging the low-calorie treats, which are made with brewed teas, root beer and espresso.
At the time, the Dengroves were selling the frozen bars at street fairs, and the loan helped get bars into stores around the country. The siblings heard about the program through Accion, a nonprofit that provides small loans to entrepreneurs. Accion partners with Brewing the American Dream to administer loans using money donated by the beer company. Boston Beer also gives entrepreneurs advice.
The Dengroves have received advice on everything from how to design a trade show booth to buying supplies more cheaply. Brewla Bars had revenue of nearly $100,000 last year and is expecting more this year. In the first three months of 2014, revenue is up 50 percent from the same period a year ago.
Sometimes the biggest reward the programs offer is being attached to a big brand.
In 2012, media company Martha Stewart Living Omnimedia Inc. launched Martha Stewart American Made. Editors of Martha Stewart Living select businesses to highlight in the magazine, and some of the businesses are asked to sell their products in News York’s busy Grand Central Station for a couple of days. Readers vote for their favorite business online, and the firm getting the most votes wins $10,000.
Leo Kowal and wife Mary won the prize in 2013. The Kowals’ business, Saint Charles, Ill.-based SVGCuts, sells downloadable designs for people who craft with paper. The designs are used for greeting cards or holiday decorations.
The couple used the $10,000 to give their six workers a year-end bonus. Traffic to the SVGCuts website increased 15 percent after it won in October, and sales are up at least 10 percent. But the best part of winning is being attached to the biggest name in the crafting world. “It’s instant creditability,” said Leo Kowal.
The Associated Press contributed.
Partnership programs at a glance
• GOLDMAN SACHS 10,000 SMALL BUSINESSES
The investment bank says it plans to help 10,000 small businesses and spend $500 million. It has helped over 3,000 businesses so far. Applicants must be the owner of a business in operation for at least two years, has revenue between $150,000 and $4 million and a minimum of four employees.
To apply in Tennessee:
• SAMUEL ADAMS BREWING THE AMERICAN DREAM
The program is for food and beverage companies looking for a loan under $25,000. Boston Beer donates money to nonprofit Accion, which provides small loans to entrepreneurs. Boston Beer says the program has provided nearly $3 million in microloans to more than 300 small businesses.
• MARTHA STEWART AMERICAN MADE
The annual event spotlights businesses that make handmade goods, such as quilts, candles and leather bags. Businesses can nominate themselves online to win a $10,000 prize; readers vote to decide which will win the cash. The editors of Martha Stewart Living select businesses to highlight in the magazine.
THE WORKSHOP AT MACY’S
The program teaches women and minority entrepreneurs how to get their products into major retail stores. Applicants must make products that can be sold in department stores, including clothing, jewelry, cosmetics and candy.
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