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SMALL-BUSINESS MAKEOVER

Ice sculpture business wants sales to heat up

Ice Bulb of Newport Beach needs to first figure out whether customers are willing to pay more for the quality of ice, designs and installation that it provides, a consultant says.

December 15, 2009|By Cyndia Zwahlen >>>

Marc Entin started his ice sculpture business just as the weakened economy melted demand for high-end party decorations.
His Newport Beach company, Ice Bulb, has had a hard time selling the ice chandeliers, frozen furniture and ice-ball curtains that he thought would sustain the firm when he founded it 18 months ago.
The recession has prompted many of Ice Bulb's potential customers to chip ice sculpture and decor out of their newly squeezed event budgets.
And despite his focus on what he says are top-quality products and white-glove installation, and generous but expensive insurance coverage, Entin has had trouble explaining why his products often cost 30% more than the competition's.
Most of his jobs have been on the small side: Customers are more willing to spend $300 to $500 for a bar or other drinking paraphernalia made out of ice than to lay out as much as $8,000 for a roomful of ice furniture.
The number of jobs has also lagged below what he needs to turn a consistent profit, he said.
The company has averaged about 15 to 18 orders a month, he said.

"We are not anywhere close to where we need to be," said Entin, who has two part-time employees and a crew of temporary workers that installs the ice pieces.

The 35-year-old has had some success. The company sold about $23,300 worth of ice sculptures a month in 2008, and this year a big job designing a likeness of the acorn-loving prehistoric squirrel from the "Ice Age" movie series has pushed the average to $29,100 a month.

But it hasn't been enough to pay himself a steady salary or easily cover his start-up costs, which included an array of the custom-made acrylic trays used under ice sculpture to control melting ice.

Charlie Baecker, director of the entrepreneurship center at UC Irvine's Paul Merage School of Business, said that if Ice Bulb is to thrive, Entin must take stock of his market and his business model.

That's particularly important in this case, Baecker said, because Entin has chosen a business model that is not the norm in the ice business. Rather than making the pieces himself or in his own factory, Entin subcontracts the work, concentrating instead on selling the jobs and installing them.

Entin believes strongly that this approach plays to his strengths and gives his company an edge. But it also makes his products more expensive.

His first task, Baecker said, is to figure out whether customers are really willing to pay more for the quality of ice, designs and installation that Entin provides.

"It's very common for businesspeople, even in the Fortune 500, to have this notion of what their business is about, and they prosecute that vision to the nth degree," Baecker said. "They forget that what their vision is, and their perception of value and quality, is not necessarily what the customer wants."

Entrepreneurs can waste a lot of resources chasing a bad idea, Baecker said. To make sure Entin isn't doing so, the consultant suggested Ice Bulb's owner contact prospective customers and ask their opinion.

Entin should tell them he doesn't want to sell them anything, Baecker said, but wants their honest opinion of his business model and to see whether his idea of the value he adds holds up. If they say no, ask them what makes sense for them, the consultant said.

After 15 or so solid conversations, he will have his finger on the pulse of what his target customers really want, Baecker said.

With Baecker's assistance, Entin calculated that he has about 2,500 potential customers in Southern California -- a mixture of event planners, high-end hotels and corporate clients. Probably 300 to 400 of those are a fit for Ice Bulb's products and service, the consultant said.

The business owner should prepare a questionnaire and send it to that group. Most won't respond, but that gives Entin an excuse to follow up with a phone call.

He doesn't have to speak with all of them. Once he understands what his customers want and he is able to identify that population, he can spend his time getting their business.

Right now the business owner is chasing high-end customers while trying to pay the bills with lower-cost jobs. That method can send confusing messages to his target audience on the upper end of the market, Baecker said, as well as diluting his efforts to attract clients who demand and are willing to pay for top quality.

"He's really selling a kind of Neiman Marcus/Bentley/Lexus kind of product, so in order to sustain reliable sales in this area, he really needs to figure out who those several dozen accounts are that will reliably come back to him over and over for his high-end product," the consultant said.

Building a solid sales pipeline is the next big step for Entin, Baecker said. To reach his goal of about $750,000 a year in sales, Entin has to average $60,000 a month.

It would be easier to reach that number by making a dozen high-end sales than hundreds of lower-priced ones, the consultant said.

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