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Rejiggering a cookie shop's recipe for sales

A Cookies by Design franchisee in Long Beach gets expert advice on adding clients and boosting revenue.

February 02, 2009|Cyndia Zwahlen

Renee Kim hopes her heart doesn't get broken on Valentine's Day.

The Long Beach newlywed isn't worried about her husband, James Slama. He'll be at her side all day, helping deliver cookie bouquets and other goodies for her franchise bake shop, Cookies by Design.

She's concerned about sluggish sales of the $20 to $150 arrangements of heart- or rose-shaped cookies.

"I'm really bracing myself," says Kim, who bought the shop on Pacific Coast Highway almost three years ago.

Valentine's Day should be the busiest day of the year for the store, which bakes and sells decorated sugar cookies, including a "Conversation Hearts" arrangement with custom messages. But this year, Valentine's Day falls on a Saturday -- traditionally not a good day for deliveries -- and in the midst of a recession.

A slow holiday would make it more difficult for the South Korea native to reach her goal to restore sales, which sagged 26% last year to $190,000 after gaining 26% the prior year.

Kim is encouraged by a bump in December and January revenue, as she benefited from the closing of another South Bay franchise and renewed sales efforts.

Still, Kim says she has no money to advertise or to do a remodel she thinks she needs for her shop, where she and three part-time workers mix up batches of sugar cookies -- plain and cinnamon-brown sugar -- and cut them into custom designs or hundreds of off-the-shelf shapes, such as animals, sports equipment and baby bottles. The oven in the back of the 950-square-foot shop also turns out non-decorated cookies such as snickerdoodles, chocolate chip and oatmeal raisin.

To cut costs, Kim says she recently negotiated a 30% rent reduction for the first six months of the year, left unfilled three of her six part-time worker slots, including her delivery person, and covers more hours herself at the store, which is open six days a week.

She also has begun to barter for some products or services. A few weeks ago, she traded store credit to cover a $550 membership fee at the Long Beach Convention and Visitors Bureau, where she hopes to meet potential clients. She also bartered cookie credit for advertising space in a local newspaper.

"I never used to be like that," says the 32-year-old, who moved to the Los Angeles area when she was 5. "If I needed something, I was just, like, 'Here's my charge card.' "

Running a cookie shop seems like a dream job to many of the people she meets, Kim says, but she sees the venture as a steppingstone.

"My goal for 2009 is to get really aggressive with my marketing, get really aggressive with sales, just work myself to death, build up my sales and hopefully I can sell at the end of the year," Kim says.

She's already been busy: Last week she had her first Facebook-promoted marketing event, offering free cookies on the first day of classes for students at Cal State Long Beach, where her husband teaches. The effort brought in dozens of parents' e-mail addresses, which Kim can use to pitch care packages for finals or graduation.

She drops off free cookies to local hotels, hospitals and other businesses when she's out making deliveries but says she doesn't always follow up. She's tried various advertising outlets, with no success. She's not sure where to focus her energy for the best results.

"All of this has been a major test of my tenacity," Kim says.

Kim is like a lot of small-business owners when it comes to marketing: She has good ideas but hasn't figured out how to get consistent results.

"There's no focus and that's very common among entrepreneurs," says consultant David Choi, an assistant professor of management and entrepreneurship at Loyola Marymount University.

Choi, who met with Kim last month, came up with several recommendations to help the fellow UC Berkeley grad meet her aggressive goal to boost sales 20% this year despite the flagging economy.

"She has to be extremely productive as a salesperson," says Choi, who brought some of his former MBA students to the cookie-filled meeting. There are restaurateur Luis Vilaneda, marketer Megan Bristol and entrepreneur James Pyle.

The group found that Kim had tried many of their suggestions, but that she didn't keep track of results. She works long hours but is challenged by a relatively unknown business, lack of foot traffic in her quiet residential location and the recession, Choi says.

"Diligence is not an issue," the consultant says. But "she's a bit disorganized" in her marketing. Choi and his team came up with recommendations that could help Kim and other small-business owners in her situation.

* Work smarter, not harder. It can be tempting for a small-business owner to try to do more, but that isn't always effective. By stepping back and figuring out what you want to achieve, you can have a clearer idea of what you need to do to get there efficiently.

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