Sunday, October 29, 2006
It is really nice when things go more or less as you expect/plan them to, especially when you are in your first year of business. Unlike many of the other winners of the Make Mine a Million award, we were literally in start-up mode when we won, so it was daunting to think how we had to live up to the expectation that we were worthy of the award when we had just started selling our first product only two months before we won the award. But we can now proudly say that we are well on our way. The big stuff that happened in October that makes us really proud:
- We signed distribution deals in NY, NJ and CA with major wholesalers who can take us to the next level in those markets
- We got "listed" in the government controlled states of VA, ID and OR and have a good feeling that WA will say yes to us next week after getting some top cocktail accounts to start carrying us in Seattle in a market blitz we did last week.
- A really nice feature article on Square One and other brands in the spirits world was written by Anthony Dias Blue (one of the premier spirits writers in the country) and the phone started ringing off the hook. Somehow, whether influenced by that article or just the momentum of the all the press we had been getting, without us lifting a finger, we were approved by HQ of Houston's Restaurant Group for placement in all their American concept restaurants across the country - Houston's, Bandera, Gulfstream and some of their invididual concepts. All of a sudden, we are getting calls from Houston's all over the country asking who our distributors were in their state. Well, in most cases, we didn't have one! But because of this huge hit, we signed on with a distributor in TN and in TX when we weren't even planning on being there until 2007! Cool!
- We got another great PR hit with a placement in the November issue (hit newsstands in Mid-Oct.) of O Magazine - yes, that O! We are on pg. 285 in the feature article "Experts Guide" and are recommended as THE vodka to take to a cocktail party as a hostess gift. We have seen some impact on sales, but sadly, can't say that we got the huge hit we were hoping for. Maybe it will come later when the "pass alongs" start happening and the holiday cocktail parties kick into high gear! But we sure were able to leverage it with the trade to get more distribution, which is a GREAT thing!
- This is a public blog, so I won't talk specifics, but suffice it to say that we passed a key sales revenue milestone on schedule, putting us on plan to hit or even surpass our 12 month revenue goals. We still have a ways to go to join the $Million Sales Club that we all are striving for, but as long as we are moving forward, not back, we are happy!
- I finally got some help . . . we are now up to 2 part-time sales people in SF and NYC, and a part-time marketing manager working with me in the office. Whew, I needed that! Still putting in 80-90 hour weeks though!
November is shaping up to be a strong lead-in to the holiday seasons, where products like ours sell up to 60% of their annual sales in the last 6 weeks of the year. We broadened our retail distribution in our two key markets - CA and NY, and there is another BIG BIG BIG media hit coming our way in Mid-Nov. Let's hope it drives sales! And we are the exclusive vodka sponsor of the Environmental Media Awards in Los Angeles on November 8th, with over 1,000 guests from the Hollywood and Major Media crowd who, like us, believe that all companies can do their part to be more eco-sensitive. We are really excited about being there and meeting so many great people who will understand that you can have fun while still being socially conscious!
I was sad to miss the NYC event, but so glad I didn't go in the end. There were so many big things that happened last week, that I simply couldn't have stayed on top of it otherwise. So to the new winners, CONGRATULATIONS and welcome to the Club!
Until next month ladies, happy selling!
Wednesday, September 13, 2006
Things are happening so fast that my brain simply can't keep track of it all. August was a great month for us in many ways. We continue to get lots of press attention, both from the industry trade magazines and consumer magazines. The photo on the left is in Imbibe magazine. I got no less than 7 trade inquiries out of that, which is unusual because the accounts and distributors are generally tired of new vodkas, but they are all excited about an organic vodka!
Because of all the attention and the fact that some great customers in SF and NYC are talking about how much they like Square One, we are now moving to Stage 2 of our distribution strategy in our top two markets - CA and NY - and are appointing what I call "real" distributors. So the hand-selling stage is behind us, and we were quite successful with it. Now we will have wholesaler partners to help us get into more stores and restaurants. Yea!
In the meantime, we continued to expand to other, smaller markets and will be in 9 states by the end of the year. We hoped to be in a few more, but legal registration in some states takes much longer than we thought. But we are on board with some great distibutors.
We kicked off our direct e-marketing to our consumers and trade partners in August and have seen that people are passing it on to their friends and more and more people are signing up every day on our site. I would love to really ramp up this part of our marketing as it is effective and so inexpensive, so it is moving up on our priority list. As part of our newsletter that is taken from our website, we showcase two editorial pieces, one called "Singular Spirits" where we highlight the efforts of individuals or groups that are doing really amazing things with passion. While a lot of it is in the "green" space in some way, not all of it is, such as this month's feature on an incredible couple in Montana that started an Animal Sanctuary for disabled animals. We also feature a "Mixologist of the Month" and their recipes. Very cool . . .
We also launched a blog on our website (not the same as the M3 one). We talk about more than just organic vodka and mixology, and post on "Green" happenings, cool places we've visited (restaurants and the like on our travels) and other stuff. Check it out if you want and if you want to send a comment, please do! It is called "Circle in the Square" - http://http://www.squareonevodka.com/TownSquare/circleinthesquare/
The big news of the month was the supposed placement on a certain famous person's product recommendations in her magazine. I can't actually bring myself to mention it publicly on a blog because I'm afraid we are going to jinx it. So we'll just have to wait until it actually hits the newsstands! So what does this placement really mean? Basically, uh oh . . . you better be ready. While it is never a sure thing until it hits the magazine, this PR placement is the Holy Grail of PR placements, so we took the risk and ordered more product. The #1 business challenge we are going to face (and my CPA confirms it!) is that we have a horrifically long cash flow cycle thanks in large part to the fact that our custom glass bottle comes from Italy. So to order more product for this magazine hit is really putting the squeeze on us. But as many advisors said, well, at least it is inventory, not a capital asset, and it IS going to sell, so be thankful it is just a cash flow problem and not a permanent investment when you don't have the $$. So we ran our numbers again and it will be tight, but we'll make it!
Q4 is going to be a big one for us so stay tuned!
Thursday, June 29, 2006
Can you say whirlwind? June was replete with a combination of drama, exhilaration, nail-biting and fun cocktail times. Like the rest of you, June kicked off with a dramatic bang with the M3 win, followed immediately after award ceremonies with a party that Square One Organic Vodka was a sponsor of - the premiere of the movie "An Inconvenient Truth". After wrapping up the next day with M3, Sunday morning brought a trip to NYC for our media and trade launch party and "official" debut of Square One in NY. Our cracker jack PR agency had secured an amazing roster of media attendees - NY Times, Self, Plenty, Nation's Restaurant News, Wine & Spirits Journal and many more. And even Nell made it there! For those winners who said "marketing" was an important strategy for growing your business, I can't say enough about PR as an effective and cost-efficient marketing strategy. We held our launch party at an expensive, sustainable/organic restaurant in NYC and it cost us a fortune relative to our overall marketing budget. But to put it into perspective, the total cost of our event (with over 40 media attendees from major pubs as you saw above) was 1/4 of what it would cost for ONE AD in a magazine like Gourmet or Bon Appetit or Food & Wine. So don't skip out on PR as part of your marketing strategy! Here is a cool photo from our event.
After a great event and a trip back home, reality set in. Now all the fun stuff was done and we actually had to start getting some cases in the door! Oh, and those little things called "cashflow" and "we need more money" raised their stubborn heads. So the rest of June was filled with phone calls, interviews, emails and the like to make sure we get the ball rolling on the financial side of things, all the while overseeing our new sales people and distributors in CA, NY and NM . . . and appointing new distributors in WA, OR, ID, UT, MT, WY and AK. Whew! And to top it off, we have a huge account in Washington, D.C. who is ready to place a big order, but we can't find a distributor to take us in there. How frustrating is that?? But we are closing in on it as June wraps up. When I presented at M3 on June 2, we were in about 40 accounts in 3 states. By the end of June, we are in over 60 accounts in 4 states, and just landed a deal with Il Fornaio restaurants to put Square One on the back bar in all 23 of their restaurants in CA, WA, CO and NV. Woohoo!
So since funding seems to be a critical thing for everybody, I'll throw out tidbits from our financial explorations/discussions: 1) We can confirm what Nell/Margery and everybody else probably already knows. Nobody really wants to loan you money until you are already a success, so you better be a big risk-taker or have people lined up to "give" you money for a chunk of the action. 2) We explored a SBA7A and quickly determined that since they were going to put liens on our houses and other assets, we might as well forgo the headache and upfront "points fees" of the SBA and just take on more risk. Gulp . . . 3) Factoring . . . great idea, but not when you have such a complex distribution system like beverage alcohol where the cash flow cycle is so long. And of course we are still too small for that right now anyway . . . But ask your banker about it if you have dependable receivables as its a good source of short-term cashflow and Susan Knapp from A Perfect Pear is doing it 4) Angels - no way. We'd give up too much for now. But it is always on our radar just in case we need to pull the trigger.
So in the end, we decided to take on more risk ourselves because we are hitting the key milestones laid out in our business plan. Since we are "where we expected to be", with no red flags in sight, we decided we can infuse some more capital ourselves. Our attorney recommended that we evaluate our "big picture" situation EVERY SINGLE MONTH so that we don't miss out on an opporutnity to change our financing strategy if needed. That doesn't count just tracking our regular financial performance and cashflow. He was talking about re-evaluating our strategic financing position every month! So yes, no matter how great an idea we have and how much our consumers and account customers are supporting us, its all a big fat money game isn't it gals?
June was a fantastic month for media and sales are gaining momentum, but money and resources always seem to temper the highs with the "watch outs". Hoping July is full of new distribution, more sales, and a tightening up of our financials!
Monday, June 19, 2006
We hosted some great consumer and trade events, including a high profile event in conjunction with the Kimpton Hotel Group and The Trust for Public land, a charity the Kimption group supports. We mixed some of our signature cocktails for both consumers and top execs from many of the Kimpton Hotels and restaurants (think Postrio in San Francisco, Hotel Triton, hotel Monaco, etc.). They have both a "Women in Touch" program and an "Eco Care" program that fit us well. As a result, we got placed in the Executive Club Lounge at The Prescott Hotel, which also houses Postrio. We're hoping to get into Postrio next! And we now have the green light to speak with other Kimpton hotels and restaurants in other states, so hopefully we'll be there soon!
Not everything was super-rosy though, although we only experienced some minor hiccups. Oregon is the #1 organic product consumption state in the U.S., yet the Liquor Control Board (Oregon is one of those states where the government runs the distribution and retail for spirits so they have to approve your listing) chose not to accept our request for a state listing. So together with our broker we are working on a special order program to get some traction going in that market in hopes of getting listed the next time around. Other control markets like Oregon are dragging their feet getting us in there, but we've been helped along by direct inquiries through our website from restaurants who want to carry our product. It sure does help us when we can tell the distributor they are missing out on sales if they don't hurry up and get our product in their state! :-)
We are also now exploring financing options outside of self-financing. We'll see where it leads us, but we are exploring all avenues.
There is more to share, but I'll sign off for now and maybe come back and update July a bit more.
And since we are writing about blogs, check out our website and our new blog feature! Feel free to comment on any subject you like! www.squareonevodka.com. Go to "Town Square/Circle in the Square".