Succeeding in the Local-Goods Market

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“Locally made” is a popular term for budding entrepreneurs with romantic notions of taking a product in their community and turning it into a profitable business. But transforming a local gem into a cash cow takes more than a good idea.

NEWSWEEK spoke to two successful local-goods entrepreneurs about what to consider when starting out. Natalie Chanin founded Alabama Chanin, a wholesaler that produces couture clothing with local, organic, or recycled materials. Her annual revenue: about $500,000. Bob Sutherland is founder of Cherry Republic stores. His three Michigan locations feature more than 175 cherry products, such as cherry jam, that bring in about $9 million a year in revenue. Their advice:


Develop a Nose for Numbers

“You can have the best idea in the world, but if you can’t make the books balance at the end of the month” it won’t work, Chanin says. She suggests new owners at least learn the basics of accounting. One way to do that: buy a copy of QuickBooks accounting software and “make it your best friend.”

Forget the WalMart Types

Some stores will always offer cheaper products, so don’t attempt to go up against them. Instead, focus on marketing the qualities you have that big chains like Walmart don’t. For example, do you offer more personalized service? Do you deliver nationwide? “Play up your strengths,” Chanin advises.

Hire the Faithful

Chanin says one of her biggest mistakes was to hire people who didn’t share her commitment to producing locally. To avoid that problem, ensure that prospective employees and advisers support your company’s goals and, at a minimum, understand your mission.

Be Patient

Future owners of locally based businesses need to realize that their investments will take time to germinate. Have enough cash to cover financial expenses for an extended period, as it could take more than a year to develop a steady customer base. In Chanin’s case, it took six months.


Find a Unique Market

Select an area where you can distinguish yourself from the competition, and don’t be afraid of quirky ideas. “We focus just on cherries and giving people the complete experience around that,” Sutherland says. Currently, the company uses about a million and a half pounds of cherries in its products each year.

Go For Long Shelf Life

Sutherland suggests picking a product that remains fresh for extended periods. He recalls how his cherry cookies would go stale within a week, which meant he couldn’t sell them. Dried cherries, however, gave him three weeks of “sell” time.

Sell your Story

The more people can learn the stories of the owner and the product, the better the latter will sell, Sutherland says. He hires enough staff to man the main store so he can greet every customer. The one-on-one contact builds customer loyalty and steady business.

Show Your Soul

Sutherland found that people love to support local companies that give back. That’s why he shares his work in the community via weekly e-mails to some 60,000 people in the area. The bonus: you can also include information on upcoming products.