A look at how Optimum Springs got its start

By Jim Molis

Optimum Spring Solutions has honed a niche in producing and exporting customized springs for other manufacturers by researching its market, refining its business plan, and resolutely pursuing opportunities to grow.

“They’re a great small company started by two industrious people,” said Nick Sacia, executive director of the Economic Development Council of the St. Johns County Chamber of Commerce.

That industriousness emanates from a multi-generational commitment to manufacturing quality springs and offering them at competitive prices with fast delivery and personalized service.

As a young girl in Argentina, Andrea De Palma grew up in her family’s spring factory. She watched how springs were made, played with them, and often helped count them, sometimes for fun.

Her family started the company, Resortes De Palma, in the 1970s. They grew it into a multinational corporation, exporting springs to the United States and Europe.

In 2006, she and her husband, Marco Fortini, started working with the company’s U.S. customers a few hours each month while living in North Carolina. Though they were both in computer sciences at separate companies at the time—he as a project manager in software development and she as a software trainer—they helped her family when they could.

Initially, the couple provided administrative support, following up on deliveries and payments. As they learned more about spring design, they started answering technical questions and recommending materials. “We were learning about the business by accident and it became interesting,” Fortini said.

The couple became more involved, wanting to add U.S. customers and increase volume. But with a sagging economy, rising gas prices, and increasing shipping costs, it was becoming more difficult to import springs. “It felt like we were swimming upstream,” De Palma said.

So, they started researching the possibility of manufacturing springs in the U.S. and exporting, rather than importing. With small-business counseling from SCORE, the couple compiled an exhaustive business plan.

“We recognize that planning is a key component of success,” Fortini said. “Implementing a carefully crafted plan is the easy part. The hard part is making sure that the planning addresses as many variables as you can anticipate, and controlling those risks.”

In compiling their plan, they identified Jacksonville as an ideal market, citing its transportation infrastructure, access to industrial equipment and materials, quality schools, and leading healthcare facilities. De Palma also referenced the Port of Jacksonville as a competitive advantage.

“[The decision to move to Jacksonville] was half and half the decision—half for the company and half for us,” Fortini said, alluding to the good quality of life in the greater Jacksonville area.

So, in June 2009 the couple opened Optimum Spring Solutions in a 5,000-square-foot space off U.S. 1, near CR 210 and Interstate 95 in St. Johns County.

They started with a single machine, which in itself was a risk. And to finance their operation, they approached 20 prospective lenders, who all (except one) turned them down. The one offer they received? Financing at an interest rate of 40%—hardly an attractive offer.

Despite having strong personal credit scores, since they were starting a new company, lenders repeatedly told them that there would not be enough volume to support the purchase. The couple disagreed. “We knew from the planning and risk assessment that there were opportunities for our company,” De Palma said.

The couple purchased the machine after combining $500,000 from their savings and family loans. Her father also trained Fortini on a similar machine at her family’s factory in Argentina, so that Fortini maximized the value of his training time with the machine’s manufacturer. 

With Fortini producing the springs, Optimum Spring Solutions rapidly began filling orders. Shortly after beginning, they received a large order related to a defense contract. Together with existing orders and a need to manufacturer larger springs than the first machine could handle, the couple soon added a second machine and related equipment.

Optimum Spring Solutions now manufactures custom springs for the U.S. military, large domestic companies, and businesses in other countries, including Canada, New Zealand, Singapore and China.

Building relationships and credibility have been vital.

The couple learned early to seek help wherever possible. They met two of their closest advisors, Sacia, from the St. Johns Chamber and Larry Bernaski from Enterprise Florida, while attending an exporting seminar hosted by Congressman John Mica, R-FL.

“It came through to me loud and clear speaking to Marco and Andrea that they wanted to export,” said Bernaski, regional manager of international trade development and Canada specialist for Enterprise Florida. “They’ve demonstrated their commitment.”

They also have grasped the importance of having Enterprise Florida, a public-private partnership with offices throughout the state as well as internationally, vouch for them with overseas customers. Enterprise Florida provides introductions and letters confirming that Optimum Spring Solutions is a reputable company.

“Many companies don’t fully understand how significant this introduction can be and the positive impact it can have on the foreign company’s decision to buy from a U.S. company,” Bernaski said. “An introduction can qualify the U.S. company and allay any fears a foreign company might have in doing business with a U.S. company,” he added.

Optimum Spring Solutions also alleviates fears by thoroughly addressing the needs of its existing customers, so that they will recommend them to others. Trust in their expertise is crucial for referrals.

 “We learned from Andrea’s family how to listen to what the customer needs and to provide the optimum solution for their project,” Fortini said.

With training in computers and industrial trades prior to starting the company, Fortini has evolved into a materials specialist who can recommend the proper springs to meet a customer’s technical specifications. He does so by evaluating variables such as size, durability, heat resistance, and corrosiveness.

Fortini no longer does all of the manufacturing himself. He has trained an employee to run the machinery and is teaching an intern to do so as well. With four workers total, including themselves, Fortini and De Palma now focus on developing the infrastructure and resources that the company needs to grow.

Fortini focuses on spring design, customer service, and technical matters. De Palma oversees purchasing, billing and shipping. They share responsibilities for sales.

The couple culls from their technology backgrounds, emphasizing search engine optimization for lead generation.  “Our storefront is our website,” said De Palma, noting that the company services other manufacturers outside of the area, not end users.

De Palma and Fortini want to expand steadily, preferring to emphasize service and technical support. “You can grow without taking care of your customer’s needs but it will lead to failure,” De Palma said.

“Our goal is to keep growing at a rate that enables us to maintain a personalized level of service and excellent technical support to our customers.”

They maintain quality and service by collaborating closely with one another, meeting at least weekly to focus on operations and at least monthly to review strategy and plans. They also maintain fluid and constant communication with her family and advisors such as Sacia, Bernaski and Mike Zollar of SCORE, learning much from each group.

 “It’s a lot of work,” Fortini said. “But you can control the risk with proper planning and by building a close network of people and resources who can assist you.

“Without that we would not have succeeded.”

Jim Molis is a contributing editor to Advantage: The Resource for Small Business. He can be reached at jim@creatwoodpr.com.

SIDEBAR

How to export successfully

Optimum Spring Solutions has succeeded by committing to exporting.

“Some companies consider exporting a secondary revenue stream,” said Larry Bernaski, regional manager of international trade development and Canada specialist for Enterprise Florida. “Successful ones see it as a primary revenue stream.”

Enterprise Florida has helped Optimum Spring Solutions and other companies cultivate business by developing relationships internationally. Optimum Spring Solutions owners Andrea De Palma and Marco Fortini, both of whom are from Argentina, immediately grasped the importance of doing so, Bernaski said.

“Generally speaking, owners of U.S. companies who are from different countries have different mindsets when it comes to exporting,” Bernaski said. “These kinds of companies are more predisposed to exporting because their business experience was formed in countries with economies that relied more heavily on exporting,” Bernaski added. “Because exporting is a more common practice outside of the U.S., it follows that Andrea and Marco, who grew up in Argentina, would feel more comfortable exporting.”

Successful exporters do the following, Bernaski said.

• Have a “go-to person” through whom all exporting matters flow. They champion exporting and ensure that it does not become of secondary importance.

• Handle inquiries from abroad quickly. “Foreign companies often like to deal with U.S. companies who take their questions to the go-to person and get an answer.”

• Get help. They use resources available through networking and other means.

• Know the market. “Learn everything you can from the small transactions then start tackling the larger transactions.”

• Commit to the export process. “Commitment is just as important as size, perhaps more important than size.”

Optimum Spring Solutions exemplifies these traits, Bernaski said. He has enjoyed watching the company grow, generate jobs, and support the local economy.

“That’s the great part about this job, to see companies like Optimum Spring Solutions doing what they’re doing.”

Planning for success

Planning winds through everything that Optimum Spring Solutions does. From crafting their initial business plan to their monthly strategy sessions, Andrea De Palma and Marco Fortini have identified the proper path through planning.

“You need to put yourself in that moment in the future and see what has to take place for that to be feasible,” Fortini said.

Before starting their company, the couple spent six months compiling a 75-page business plan, including their competitive analysis, goals, marketing strategies, financials, and other key areas. They learned how to use Census Bureau data and other resources to compile relevant information. “We went to every kind of seminar you can imagine,” De Palma said.

The couple also worked closely with SCORE, a nonprofit advisory service for small-business owners.

“Optimum Springs Solutions is an example of a company where the owners are very receptive to learning,” SCORE Counselor Mike Zollar said. “That’s very helpful.”

Fortini and De Palma would listen, learn, revise, and implement their plan, then come back for more advice, Zollar said. Not all business owners are so thorough in their planning.

“One of the biggest problems we find with many small businesses is people are very passionate about their ideas and overlook some of the basics like cash flow,” Zollar said.  “They need to be open to learning that kind of thing.”

Zollar worked closely with Fortini on how to develop relationships with new clients and how to handle new business. He also helped them adjust their quotation systems and financial projections to handle growth.

De Palma and Fortini review and revise their plans often, breaking down each year, month, week, day, and seemingly hour. The bigger the challenge, the more they plan.

“At the most stressful moments, the stress was relieved with planning,” Fortini said.

They plan to keep planning—and to keep growing.

By Linda Segall    

Whenever a “big box” store—such as a Walmart, Home Depot, or Best Buy—announces its intent to come into a community, small business owners cringe. They fear the fallout of the big box presence: lost customers and revenues.

Some businesses, however, have found ways to succeed despite sitting in the shadow of these monoliths. Turner Ace Hardware is one of them.

Mike Turner, owner of two Ace franchises—one in Jacksonville Beach off A1A and J. Turner Butler Blvd. and the other on Atlantic Blvd. near Hodges—admits, however, that when Home Depot and Lowe’s entered the picture, his businesses felt the fallout. Yet, his Ace stores continue to serve their communities as they have done for more than 50 years.

As Turner describes his family’s half-century retail journey, it becomes apparent that endurance and success have resulted because Mike Turner and other Turner family members have done four things:

• Taken advantage of opportunities,

• Remained flexible,

• Differentiated their stores, and

• Delivered great customer service.

Taking advantage of opportunities

“The store started with my grandfather, A. J. Sr.,” reflects Turner. “He had been selling Fords at Lynch-Davidson Ford downtown, but he saw an opportunity to go into the hardware business for himself. He sold his house on the river by Fort Caroline Monument and built a store with an apartment above it in the Arlington area. That’s how he got started with an old-fashioned hardware store, with barrels of nuts and bolts in the aisles.”

Other opportunities, including becoming an Ace franchise in 1963, came along as the years passed and Turner’s father got into the business. Those opportunities included buying, selling, and building other stores and expanding into new business areas.

After Turner’s father got into the business, the original store was moved to a new location in Arlington. “That happened in 1972. That store is still standing; my brother owns it,” said Turner. (His brother Steve recently opened another Ace franchise in Fernandina Beach.)

Turner himself got into store management at age 20, when the family bought a store on Normandy Blvd. “It had basic hardware and a garden shop, but we sold a bit of feed and a lot of fencing, something I didn’t know much about but I learned,” he says. The Turners sold that store several years later when a retired steel executive wanted to get into the hardware business. “He lived his dream for a little while, but it got the best of him.” says Turner with a smile. “The hardware business isn’t something you retire into.”

When an outdoor nursery with 2.5 acres and a True Value store on the property came on the market, the Turner family saw a new opportunity. “We turned the store into an Ace,” relates Turner. That was our first venture into outdoor nursery. We’d had garden shops on the sides of our stores, but never a true nursery. That put us on the map in nursery in a big way.”

Opportunity knocked again in 1995 when property became available in Jacksonville Beach. Turner’s father bought five acres and built the biggest store building codes would allow—50,000 square feet with a garden shop. In 1999 the family did a repeat by acquiring property at Atlantic and Hodges and duplicated the Beach’s store on it. “We didn’t know exactly how we would use such a big building,” said Turner. “But we didn’t want to make the mistake we made earlier at our Regency [Atlantic and Southside] store, which had been on a good corner. It originally was a small building, and over the years we kept adding onto that store so we could offer floral and a garden center. The old building became a conglomeration that didn’t look very appealing. We didn’t want to have the same thing happen…adding on like that. So we built big in Jacksonville Beach and on Atlantic and Hodges.”

Remaining flexible

Flexibility is the ability to bend. In retail, that means being able flex with the times and economic conditions.

“One of the best decisions we made was to become an Ace franchisee,” says Turner. “Ace allows you a lot of latitude. You are not required to buy anything from them, although it behooves you to buy everything that Ace offers because they have the buying power, since they have 5,000 stores. But the good thing is that Ace encourages you to bring in other things to serve your neighborhood.”

Not only can the store add items, it can also subtract items, too, something Turner has been willing to do to remain competitive, because of the economy as well as because of the proximity of Home Depot, Lowe’s, and even Super Walmart. “You have to watch your inventory closely,” he says. “If you see that something that turned over four or five times a year is now only turning once a year, you have to reduce the inventory or eliminate the item. You have to know what’s making you money and what’s not.”

Turner has also been willing to recognize when it is time to “fold his hand.” The family had a store in the Regency area (Southside and Atlantic) for a number of years. But when Home Depot came in with a new building, the family recognized the rambling old store had seen its better days. The location was prime, however, and they sold the building and real estate to buy property and build a new store at Atlantic and Hodges.

Similarly, as the economy turned south and Lowe’s joined in the big box battle on Atlantic Blvd. near his store on Atlantic and Hodges, Turner assessed the store’s strengths, trimmed it down to an appropriate size, and leased 30,000 of its 50,000 square feet to Lifestyle Family Fitness. Owning the property instead of renting gave him options, he says. Likewise, owning the Arlington building and land behind it gave the Turners another option for income: They put up a stretch of warehouses behind the store, which have provided a “nice monthly income.”

Differentiating

Although Home Depot and Lowe’s attract some of the same customers as Ace, in some respects they are not direct competitors, says Turner. That’s because Turner has successfully differentiated his stores from all the others.

“We don’t carry lumber; never have,” he says. “And Home Depot caters to commercial trade—maybe 60% or more of its sales are to contractors. We only have about 10% commercial.”

Turner takes full advantage of Ace’s corporate policy that lets individual stores carry items specific to its constituency. He watches trends and seeks out quality products he thinks will sell. His stores carry high end patio furniture, as well as spas and outdoor kitchens. Home Depot carries those items, too, but not the same quality. “We go to furniture shows in Chicago, the Merchandise Mart in Atlanta, and grill shows in Orlando to find higher end patio furniture,” he says. “When customers buy from us, they can get custom-ordered fabrics. They can’t do that at the big boxes. Customers get what’s on the floor. They have no choice, something we give.”

Customer service

Another way in which Turner differentiates his businesses from the big boxes is through excellence in customer service. “You try to give what they don’t—customer service,” says Turner. “You make sure when people come in, they are greeted and let them know you are happy they are there.”

To provide that high level of customer service, Turner prides himself on hiring mostly full-time employees. “We do have some part-timers,” he says, “but we try to keep as many full-time people as we can. We feel we get a more loyal person that way. If someone is here making a living, they are more apt to give it their all instead of someone who is here temporarily. And it’s expensive to train new people, so we don’t want turnover.”

Turnover has not been a problem, especially in the management ranks. His managers have been with him a long time—20 years in Beach’s store, 10 in the other. “They are familiar with the products and make sure employees get trained,” says Turner. That training is important, because customers rely on Ace employees for advice on not only what they need to buy but how to use various products. “If the person who’s waiting on you can’t answer your question, there will be someone in the store who can,” promises Turner.

Ace offers training programs, but Turner makes sure his employees get training on products local customers want, such as shallow-well pumps. He says a vendor put together a training program on pumps for his employees. It was so popular that it had to be repeated.

 “Training is constant,” he says. And it is through training that he makes sure his stores reflect Ace’s slogan—“the helpful hardware place.”. “If anything,” he says, “that’s what makes us different from Home Depot.”

Most customers would agree.

Linda Segall is editor of Advantage: The Resource for Small Business. She can be reached at Linda@advantagebizmag.com or 904-677-2463.

SIDEBAR 1

Competition among Ace franchises?

Turner Ace Hardware is a franchise operation, operating in two locations: 13164 Atlantic Boulevard Jacksonville, and 784 Marsh Landing Parkway, Jacksonville Beach.

A few miles down the road from the JAX Beach store is Proctor Ace Hardware in Ponte Vedra. And Steve Turner, Mike’s brother, operates an Ace store on Arlington Rd., as well as one in Fernandina Beach. There are several other Ace stores within the Jacksonville area.

Do they compete with one another?

“Not at all,” answers Turner. “Ace is good about not saturating the market with franchises. The stores are far enough away that we do not compete. Customers go to store closest to them. Very few will go out of their way to go to another store, unless the one they visited doesn’t have what they need. We actually advertise together because it makes good business sense.”

SIDEBAR 2

How Turner Ace Hardware endures

Turner Ace Hardware has survived numerous economic recessions as well as the onslaught on big box stores. Its endurance is directly related to the Turner family’s willingness and ability to:

• Take advantage of opportunities,

• Be flexible;

• Differentiate; and

• Provide top quality customer service.

By Linda Segall    

You know the saying: “Stuff happens.” And “stuff” does happen, especially when you own and operate a family-run business. That “stuff” can range from the death of a family partner to an irreconcilable relationship problem between managing owners. When these things happen—whose cause is generally a lack of planning and poor communications— too often the fatal consequence is the business itself.

Despite the possibility of “stuff” happening, family businesses comprise the backbone of American businesses, with an estimated 80% to 90% of all small businesses falling into that classification. And many of them are highly successful.

Advantage: The Resource for Small Business talked with the owners of three successful family businesses operating in Jacksonville:

• Selby Kaiser and Linda McMorrow, owners of The Legends of Real Estate (www.sellinglegends.com), 8777 San Jose Blvd., Suite 903.

• Rebecca and Carlton Walden, First Coast Signs (www.firstcoastsigns.com), 3728 Philips Highway, Suite 37. First

Rebecca and Carlton Walden

 Coast Signs designs, manufactures, installs, and supports custom signs including large format digital prints, interior and exterior signs, vehicle  graphics (wraps and lettering) , and LED signs.

• Tracey and Mark Hebert, AlphaGraphics (www.us549.alphagraphics.com), 7999 Philips Highway, Suite 309. AlphaGraphics provides design and printing services to businesses and individuals.

We explored with these owners their secrets to running a family-owned business.

How did you decide to go into business together?

Selby: Because we are identical twins, Linda and I have always been close, and we have always shared common interests. As children in a military family, we moved around the country frequently, and although we both swore we wouldn’t marry a military man, each of us ended up marrying a West Point graduate and later settling in Jacksonville.

Our careers were also somewhat parallel. I was into branch office management, while Linda had developed a brand of her own as an sales agent for a large real estate company in Jacksonville. When our parents’ health demanded more of our time, Linda invited me to join her in sales, which I did for eight years, and in 2006 we decided to open our own real estate office, The Legends of Real Estate.

Our vision initially was to operate a small company, with only us and an administrative assistant. I didn’t go out and recruit associates, but our friends and colleagues wnted to join our way of doing business, and today we have two offices and 35 agents working for us.

Rebecca: We looked for an opportunity to go into business for ourselves. In my past life, I was president and CEO of two community banks in Michigan. I relocated to Jacksonville to be an SBA lender with CIT Small Business Lending. Unfortunately, the economy fell apart, and I had to make decisions about what to do with my life.

Carlton was working in the golf industry and is a PGA  professional. He and I had been together for a couple of years. We decided to get married and to make a lifestyle adjustment that would also allow a flexible schedule to accommodate family situations. We investigated the opportunity of opening our sign company  and got married at the same time.

Tracey: Mark and I were married in June 2008. His job at the time kept him on the road virtually full time, something that we did not want. Working with an entrepreneur coach, we started to do due diligence on several different franchise opportunities, including AlphaGraphics. Mark was familiar with the AlphaGraphics name, since he lived in Utah, where the company is headquartered. We decided to go out to Utah for the company’s “Discovery Day,” which is actually a mutual screening process: We met the AlphaGraphics people, and they met us. Six potential owners participated in Discovery Day class with us.” To our knowledge we are the only ones that completed the process to become owners. We took over our store in December 2008.

How do you divide up your responsibilities?

Rebecca: We intuitively do things we are strong in. Carlton is in charge of inventory—ordering it, making sure it comes in, making sure we get credit for it. He also does purchasing, which is good, because I hate to shop! He does all the banking and facilities. We both are responsible for business development. I do a lot of marketing and take care of the administrative work and working with customers.

Linda: We do essentially what Rebecca and Carlton do—cater to our strengths. Selby was in management for 10 years; she is very skilled at doing the brokerage side of the business. I can do it when she’s not available, but my strength is in sales and working with our clients and customers. Selby is one minute older than me, and I think it shows in her personality! She’s always been the stronger personality. She’s very good with public speaking. She can talk in front of 5,000 people without blinking an eye, whereas I would be quaking in my boots and reading off note cards.

Selby: And if something needs more attention than the other person who usually does it can give, we just jump in and do it together.

Mark: After we decided to purchase the AlphaGraphics franchise, we went through three weeks of training in Utah. One of the things they put us through was to look at our strengths and to divide our duties accordingly. They helped us identify who should do what. We’ve had to trade some of those around, but it has worked out well for us.  

Tracey: My role is to bring sales in and develop relationships with outside customers. Because we are a business-to-business company, our goal is to become a business partner. I also have an accounting background, so I do the bookkeeping, payroll, and marketing.

Mark: My role is in production management. Tracey may get the initial business, but I do the actual quotes. At first she did ordering; it seemed to fall into the realm of accounting. But then we realized that ordering supplies was part of production, so I took on that role.

What kind of business agreement do you have?

Tracey: We have a mutual respect and trust for each other. That said, Mark came up with the idea to make me 51% owner, in order to have a woman-owned business. He owns the other 49% in the company.

Rebecca: Carlton and I got married at the same time we opened our business. We went into this 100%. We do have a pre-nuptial agreement, but we would have had that even if we hadn’t gone into business.

Selby: We have written agreements with all of our agents, but Linda and I have never seen a need to formalize our business arrangement with an agreement. If we were to dissolve the business, we would figure it out. If someone wanted to buy us out, we would split it down the middle. That’s the way we’ve always done it, including buying our building.

How do you handle conflicts?

Carlton: My mother always said, ‘”Think before you speak.” If I have a conflict with Rebecca, I try to sit on it for a while, because I know she is busy and I don’t want to interrupt her strong thought processes. I let her stay in the moment.

Rebecca: I tell Carlton, “Tell me before I go onto the next thing.”

Selby: Because we’ve been together so long, we really don’t have a lot of conflicts.

Linda: A few years ago, though, we were approached by a developer and asked to handle a high-rise condo downtown. Selby knew the players better than I did, and she was excited about it. I had some reservations. I couldn’t put my finger on it, but it didn’t feel right. It took me a few weeks to work through my feelings, and during that time, I didn’t share them with Selby. Then it finally hit me: This was not the time to do this project because we would be abandoning relationships we had built over many years.. That evening, we got our husbands together and we talked it over. We finally agreed it was not the time.

It was a good decision. Within a month or two, we finalized opening our own business. And interestingly, that other project has been put on the shelf. So, the short-answer is this: When we have a difference of opinion, we just talk about it. We trust each other and love each other enough that we want to hear what each has to say, even if it is different.

Mark: We’ve had a couple of conflicts and differences of opinion. Generally, what we end up doing is going back to what we want to accomplish in 10 years. We ask, “What resolution will get us closer to that goal in the long run?” That approach has worked very well for us. It’s not always easy, because sometimes conflicts are emotional. But we try to separate the emotion from the conflict, focus on where we want to be and which solution will get us there. It seem to work pretty well.

What are the secrets to your family-business success?

Tracey: I think mutual respect and appreciation of our employees’ strengths  is our secret.

Mark: Knowing your limitations and trusting the strengths of your spouse. That’s important.

Selby: I don’t think running a successful family business is different from running any other business. We treat associates and employees like family. We buy locally to support other small businesses. And we show that we value our customers. We don’t even use voice mail; we answer all calls ourselves, no matter what time it is.

Rebecca: I think the real secret is this: Remember everything you hated about big business and don’t do it.

Linda Segall is editor of Advantage: The Resource for Small Business. She can be reached at Linda@advantagebizmag.com.

SIDEBAR 1

How to avoid common family-business failures

Experts agree: The most common causes of failure in family-owned businesses can be boiled down to two: a failure to plan and inadequate or inappropriate communication.

Planning—or more precisely, a failure to plan—affects cash flow, your estate, management succession, transfer of ownership, and business practices.

Communication problems course throughout all of the planning areas, but also include managing the business, resolving conflicts, and maintaining a positive workforce.Both planning and communication issues can be addressed in a well crafted business agreement.

Paul Arrington

Paul Arrington

, certified business analyst and director of micro enterprise development at the University of North Florida’s Small Business Development Center, identified several other problem areas inherent to family businesses:

• What’s really in charge? “In some family owned businesses, a parent may be the president, while other family members actually manage the business,” he said. In others, one family member may have the title of president, but ultimate decision making is deferred to the “elder stateman.” To avoid confusion in decision making, Arrington suggests clearly establishing the lines of authoring. Also, consider establishing an advisory status for founders who have transferred management to others.

• Equity or loan? Money creates problems, especially if transactions are informal, said Arrington. Anyone who makes a transaction should know—in writing—if it is a loan or an investment in the business.

• Tunnel vision. If you only involve family members in the business, you can get tunnel vision concerning where the business should go and how to get there. Get business counseling or coaching  and join a peer-to-peer roundtable, said Arrington. And, as your business grows, hire out talent to bring in new ideas.

• Hiring cousin Joe. “An underqualified or unmotivated relative employed in the business creates morale problems with other employees and reduces productivity,” said Arrington. If you hire relatives, put them in positions where their talents can best be cultivated, and pay them commensurate with similar positions in the area. And, be prepared for the difficult task of discipline if the relative does not work out.

• Death, divorce, and disease. “These three D’s can impact the ownership or operation of the business significantly,” said Arrington. Periodically conduct retreats so the family can discuss the business, contingency planning, and problems. Consider asking an impartial facilitator to lead these retreats.

 SIDEBAR 2

Know your strengths and weaknesses

To plan for success, the Family Business Institute (www.familybusinessinstitute.com) recommends doing a complete assessment to identify your business and family strengths and weaknesses, establish priorities, and work on your business, rather than in your business.

Here are some of the questions the Institute recommends every family business owner should consider:

• Are family members compensation fairly and adequately?

• Do you use a proven method to resolve conflicts?

• Is the future ownership of your family company clearly defined? If not, why not?

• What do you want to get out of the business?

• What provisions have you made to exit your business with financial security?

• Have your wills and associated trust documents been updated in the past three years?

• If there is more than one shareholder in your family business, do you have a binding buy-sell agreement?

• Do you have and use a formal or informal board of advisors or board of directors? If not, why not?

• Do you meet regularly to discuss your strategic plans as well as operational plans?

• Do you have written job descriptions for everyone, including family members?

The Family Business Institute recommends taking action on the one or two items you consider are most important to the success of your business. A complete assessment of 80 questions is available at www.familybusinessinstitute.com.

By Robyn A. Friedman    

Rob Lee had spent 11 years working at ALLTEL Information Services when he came up with a better idea. “I saw that many of our clients at the time were very interested in more effectively engaging their customers,” said Lee, who headed up product strategy and software development at ALLTEL. “And most organizations aren’t very effective at that.”

Lee thought that if a company could improve its ability to cross-market to customers—selling a credit card to a customer who already banked with a financial institution, for example—then it would dramatically increase the retention of its customers. After all, it’s easier and cheaper to sell to an existing customer than to go out and find a new one.

But, at the time, the technology that would allow a company to cross-market that way was “not very elegant,” according to Lee, and required a large upfront investment. So instead of asking companies to purchase millions of dollars of software to replace their current systems and then take years to install it and teach employees how to run it, Lee decided to keep the software “in the cloud,” selling it instead as a service platform.

“The organizations that use our platform don’t install it—they access it over the network,” he said. “Whenever and however they engage their customer, they’ll link our platform into that engagement process.”

In 2004, Lee and three partners founded XSell LLC, a Jacksonville-based company focusing on delivering multi-channel cross-sell solutions to its clients. Its software improves targeting, delivers personalized value propositions, and ensures offer consistency for customers across any communication channel.

The four partners initially funded the company with about $4 million from savings and friends and family, “bootstrapping it” for about two years. The first customer using XSell’s solution went live in March 2005.

Basically, XSell’s platform does the following:

• Aggregates and scores detailed public and non-public customer information to match product criteria with customer attributes;
• Builds and continuously enhances a library of offers that are assembled in real time to create personalized customer value propositions at the point of a service interaction; and
• Securely transmits customer transaction information for fulfillment once offers are accepted.

An example: You walk into a cell phone store to check out the latest phones. The salesperson enters your phone number into the computer. In seconds, he knows how long you’ve been a customer, what you’ve been offered before, what you like and dislike about the service, how often you call in, how you use your phone, and what packages are available in your area.

Based on that information, the XSell platform creates a narrowly targeted offer to entice you to buy an additional product from the company. The offer is based on your specific needs. In other words, a 20-year-old may be offered an upgrade that allows unlimited texting, while a senior may be offered high speed Internet service to facilitate video chats with the grandkids.

“It’s all about engaging that individual end customer with the most compelling offer—something that’s right for them,” Lee said. “We don’t want to sell things to customers that they don’t need.”

When Lee was at ALLTEL, he led the acquisition of a number of companies, and he noted a common theme among small companies seeking funding. “A lot tried to raise capital before they were ready,” he said. “That can put you in a very dangerous position because the days of raising a significant amount of capital without giving up most of the company are over.”

So Lee and his partners waited. Their strategy was to have XSell’s product used by a target set of early adopters. That way they could show potential investors that the company had paying customers who were seeing real economic benefits from using the XSell platform. “With a few of those customers, we then went out and sought investment in order to expand the company,” he said.

While XSell was already profitable, Lee wanted to raise capital to increase his sales and marketing budget—to hire additional salespeople and a public relations firm. So he sought angel investors. “Jacksonville is a very fertile area for raising angel capital,” he said. “You have to have the right network, know the right people.”

Lee did. Within 60 days, XSell had its financing. “We had a product that was delivered, installed, was working, and providing a result,” Lee said. “So it wasn’t something speculative, like in the days of Silicon Valley. It was something people could see and that had a customer base already.”

XSell raised $2.5 million during that first round of financing.

About 18 months later, the company went back into the market for an additional round. At that time, XSell had a customer base comprised largely of financial services firms, but Lee felt there was a significant opportunity to expand into the cable, telecom, healthcare, and insurance industries. To do so, he would have to hire personnel with some expertise in those industries. After successfully raising an additional $3.5 million from angels, the company hired four more employees to do sales and marketing.

“We’ve leveraged that investment a lot of different ways,” Lee said. “If you look at the resumes of our management, we definitely are moving from a financial -services bias to a communications/cable/telecom bias. And we’re going to make some moves in healthcare this year that will broaden us further.”

Lee won’t disclose how much of the company he had to give up to the angels in order to lock in the financing. But he will say this: “We’ve been in business six years, and the founders still have controlling interest in the company. And we’ve raised $6 million.”

The firm is up to 20 employees. Lee won’t release specifics about revenues, but he said that the company grew 400% from 2008 to 2009 and is on track to more than double this year.

What’s next for XSell?

“The exit strategy for us is that we are likely to be an acquisition target for a larger technology firm,” Lee said. “That’s really no secret. We’ve certainly had a lot of overtures from organizations that have related technologies. Fortunately we’re in a great position, and we’re not in a hurry.”

What advice does Lee have for other entrepreneurs trying to raise capital? “I can’t imagine going out for financing without a shipping product, a customer you can use a reference, and a result you can quantify,” he said. “There’s a lot to do before you get to those, but once you have it, that opens up a lot of options.”

Xsell (www.goxsell.com) is located at 10151 Deerwood Park Blvd., Bldg. 200/Suite 115, Jacksonville, FL 32256. Rob Lee can be reached at 904-854-6700.

Robyn A. Friedman is a contributing editor to Jacksonville Small Business Advantage. She can be reached at RAFWriter@att.net or through her Web site www.everythingwrite.com

By Linda Segall    

For the last 22 years, every Tuesday 139,000 readers have grabbed a free copy of Folio Weekly from racks placed in businesses throughout Northeast Florida. Most of those racks are empty long before Tuesday, when the new issue is published—a testament to the publication’s popularity. The loyalty of Folio Weekly’s readers can be traced to its founder—Sam Taylor, who recently handed over his responsibilities as publisher to David Brennan.

Throughout his tenure as publisher of the popular weekly, Taylor has never backed off controversy or hedged on digging for the truth, even if it meant “ruffling the feathers” of area business leaders or politicians.

He has also been a mystery man: He says his photograph has never been published locally , and he has shunned interviews and publicity. Because Folio Weekly is a sterling example of a small business success story, Jacksonville Small Business Advantage asked Taylor to talk with us and unveil how he made Folio Weekly the success it is.

Advantage: How did you get your start in publishing?

Taylor: When I was a young man, I earned my way through college by working in the shipyards in Norfolk, Va. I was earning very good money as an outside machinist, the guy who installs finished machined parts. I was making such good money that I never saw my future except in the shipyards, even after I got my degree. But, times changed. I got laid off. I thought, “What am I going to do now?” There was a newspaper 1,500 yards down the street. I walked down there and applied for a job. They hired me in advertising sales.

Advantage: So, you dipped your toe into publishing by selling advertising. How did that lead you to Jacksonville and the start of Folio Weekly?

Taylor: Back in the early 1980s, newspapers got muscle-bound. They had market share and pricing power. But, they realized there was an audience they weren’t reaching—active affluents. These are women and men who are so busy they don’t have time to read a seven-day-a week daily. They read it perhaps twice a week, maybe Saturday and Sunday. So, the active affluents were not being served by the dailies.

The newspaper needed a product for this market. One option was what eventually became Folio Weekly. The newspaper I worked for didn’t invent this format. It saw a market for it in Jacksonville, and the owners asked me to start it up here. That’s how I got here.

Advantage: Was it an immediate success?

Taylor: No, I failed! My bosses promoted me too fast. They assumed because I was good at one part of the business—advertising sales— I would be good at everything else—editorial, production, management, and business operations. They were wrong. I was 30 years old and didn’t know what I didn’t know. I did so poorly that the owners decided to sell Folio Weekly 33 months after I started it up.

Advantage: What kinds of mistakes did you make that caused the venture to fail at first?

Taylor: We hired too many people, and we didn’t pay them enough. We had legions of untrained, poorly motivated people. We had 20 start-up employees. We would have done much better with 11.

Another thing: I got smitten with the entrepreneurial thing called “let’s go shopping.” I went out and bought office stuff, but I wasn’t spending time meeting advertisers. I was busy, but I wasn’t busy on the right things. I didn’t need to pitch a product; I needed to find out what was working to add to their success or reduce their failure.

Advantage: Obviously something happened. Folio Weekly is a highly successful newspaper.

Taylor: Actually, Folio Weekly is not a newspaper. It is a newsprint magazine. There is a difference. News is technically ‘history in a hurry.’ We never had much news. Most of our editorial does not look back. It is “news you can use” of what will happen in our town during the coming week.

But, to answer your question, when the owners decided to sell, they couldn’t find a buyer. So, they ended up selling it to me and one of my co-workers, a buddy of mine. We bought it on March 15, 1991. We made it profitable one year after buying it, and it’s been profitable ever since.

How did we do it? Well, you can see I am 5 feet 5 inches tall. I walked around like a rooster; I made stuff happen. So as soon as I bought the business I laid off every department manager and got costs down. With the operating losses we had time to improve the publication.

Advantage: How as Folio Weekly changed over the years?

Taylor: At first we started with food, fashion, festivals, fitness, and fun. We published on Tuesday, because we wanted to give our readers time to plan their weekend. But, those active affluents—our 25- to55-year-old audience—wanted more. They wanted victims, villains, and heroes. So that’s what we gave them. At first we went out to find our stories. Then, all of a sudden folks who felt like they were being mistreated started calling us. We got into investigative journalism, which neither the TV stations couldn’t handle, and the newspapers never had much stomach for it.

Advantage: What makes your audience so loyal?

Taylor: We have two types of readers: interested readers and determined readers. Interested readers don’t see many of the articles. They look at the horoscope; they really into the food, fashion, festivals, fitness, and fun part of the paper.

Determined readers read 11 pages or more and dig deeper. They are the ones who are looking for the stories on villains, victims, and heroes. And they are the ones who pushed us to go one more notch—to give opinions. Once you get people to check in as citizens, they are interested in opinion. Opinion is like a knife sharpener. You sharpen your knives by taking metal off the edge. You sharpen a citizen’s ability to be incisive by buffing back what they think is true. What’s left is the original point of view, but sharper. When they read Folio, even if they say ‘Folio is full of crap,’ they are better informed. That what citizenship needs. That’s what we give them.

Advantage: What stories stick out in your mind for stirring up controversy?

Taylor: We did a story on a hospital incinerator that wasn’t properly loaded. It wasn’t burning right; it was polluting the air. The hospital said, “How dare you say something like that?” We ran a piece on a megachurch. The minister didn’t like it, and he tried to rattle my editor’s cage. And then there was one on how the Marines recruit. The story was about how the military was not living up to its promises after it got people to sign up. A Marine was upset about the story and came in here. He was outraged that we would publish something like that.

Advantage: You are perceived as a liberal paper in a conservative part of the country. Your editorial content stirs up a lot of controversy. How do you deal with it?

Taylor: For this part of the country, we are perceived as liberal because we are in a relatively conservative area. If you were to take Folio Weekly and publish it in New England, we would look much less liberal.

But to answer your question, if somebody in a story feels like they’ve been wronged, it’s important. We do our homework; we check facts. If we are wrong, we will say so and we will run a correction, but that doesn’t happen often. Usually complaints come because people don’t like what we’ve published. If we don’t believe we were wrong, we tell them they can write a letter to the editor, and if they don’t think a letter is enough “real estate” in the paper, we’ll give them a full page.

The exercise is for us to get it right. We don’t get sued very often, and we’ve never spent a day in court in 22 years, due to our editorial integrity and editorial humbleness.

Advantage: You started this paper. A few months ago, you stepped aside. Why? And what are you going to do now?

Taylor: I trained my replacement. He was ready to take over, so it was time for me to go away. He’s doing a great job. Now I can turn to my other passion—restoring old motorcycles. I have a comfort level in doing that, it’s like going back home, using skills I learned when I worked in the shipyard. I’ll continue to do restoration as a hobby.

I’ve restored some Japanese bikes from ’60s and ’70s. A reader who lives in Japan told me the Japanese want their bikes back, so I am going to Japan in the fall to set up some trade pipelines.

I am a very lucky man..

Folio Weekly (www.folioweekly.com) is published on Tuesdays. Its offices are located at 9456 Philips Highway, Ste. 11, Jacksonville, FL 32256. Linda Segall is editor of Jacksonville Small Business Advantage.

SIDEBAR

Taylor’s tips for small business success

Taylor told Jacksonville Small Business Advantage, “After 35 years of doing what I do, I’ve found that one-third of what I thought was true is true; one-third I thought was true, was true then but is not any longer; and one-third I thought was true was never true.” With those words of wisdom, here are some of Taylor’s success tips:

• Train, don’t reprimand. “Early in my career, I was taught to set goals, praise in public, and reprimand in private. I found out that was bad advice. Setting goals and praising in public were good. But a manager should take ‘reprimand’ out of his tool box. If somebody screws up, look at it as a training opportunity.

• Learn your customers. “When you are first starting out, spend time with your customers. Find out what you can do to make them successful. That’s why you are in business.”

• Hire well, pay well. “Hire good people and pay them a fair salary, even if you are just starting up. If you hire mediocre people, you will get mediocrity.”

• Be kind, not correct. If you have a choice between being kind or being correct, choose being kind. Doing so will maintain personal relationships while you work on perfecting the task.

By Ashley Feit    

When Debbie Burgess lost her high-paying, financial services job, she never dreamed it would lead her to

 opening her own business. Like many people, Burgess thought she would one day retire from her corporate America job and live comfortably ever after. She went through the emotions that most people experience when losing a long-time position, and then she started clearing out her closets.

Burgess started with all those wool business suits she had collected traveling the country as a training specialist working with financial institutions. She suspected that she would never need them again and gathered them up to consign. It was then that she started thinking about a new business concept in consignment.

“I thought about all the motorcycle apparel I saw in my closet, and that my husband had in his, and wondered what we could ever do with the clothes that are in good condition, but didn’t fit anymore,” Burgess explains. “Most consignment shops don’t really have a customer market for motorcycle apparel.”

A unique idea is born

After consigning her suits, Burgess went home and did some Internet research. She could not find a single consignment shop anywhere in the country that specialized in motorcycle apparel. She did find the National Association for Resale and Thrift Shops (NARTS), and she found it just in time to attend its 25th annual conference in Scottsdale, AZ.

Burgess attended the conference as a future business owner and pitched her plan to a few successful shop owners. She wanted to validate her concept since her initial research didn’t reveal another shop like it in the country.

Her concept was centered on her desire to do something for the motorcycle enthusiasts, who, like herself, are always so willing to help others. By giving them a shop where they could recycle those expensive motorcycle apparel items that no longer fit, they could get part of their investment back and help the planet. It would be a small, local solution toward the growing problem of post-consumer textile products contributing to our landfills.

Burgess also wanted to do a few things different for her customers such as allowing them to choose the charity that their unsold items would go to.

By the end of the four-day conference she was known as the “motorcycle lady,” and she also knew that her idea had been validated.

Developing the plan

After confirming her idea at the conference, Burgess returned to Jacksonville ready to bring her idea to life. She contacted the Small Business Development Center (SBDC) at the University of North Florida where she attended workshops and was introduced to a Certified Business Analyst for guidance and idea sharing.

As Burgess was putting together her advisory team, she discovered, much to her surprise, that most all of them shared her same passion for two wheels and the open road. The attorney she partnered with, the insurance agent she’s using, and several people at her bank all ride motorcycles.

“It was great to know they were all motorcycle enthusiasts too. It’s hard to fail when you have a team that believes in what you are doing and shares your passion,” says Debbie.

Location, location, location

Burgess worked on implementing her business plan and set a budget of $25,000, which she pulled from her personal savings and her 401(k). After developing her budget, she began the most difficult part of her new business set up— finding the right location.

“Securing a location was the most challenging part of starting my business,” explains Burgess. “I wanted to be in Mandarin close to my home, and I wanted the location to have safe, easy access for motorcyclists.”

She didn’t have a hard time finding a location, but rather in negotiating an acceptable lease.

“You would think that with all the vacancies in strip malls, this wouldn’t have been so difficult,” Burgess says. “The issue was that I didn’t want to sign a multi-year lease until I knew that my business would work.”

With no examples or history to base her unique business on, Burgess didn’t know what to expect for the interest and profitability of her shop. She didn’t want to get tied into a long lease. After much looking and negotiating, she finally secured a location and a lease to her liking.

Setting up shop

With a lease signed for 2nd Ride Around Consignment Shop in Mandarin, Burgess began working on building the inventory for her shop. She had to do this quickly because a commercial lease agreement requires the business to be active within 30 days of signing the lease, but she was able to negotiate a little extra time. Burgess contacted all of her friends and fellow riders for consignments and shopped garage sales and other stores. She invested about $2,000 of her budget in her initial inventory.

The largest investment for the shop was in the store set up. Burgess spent around $10,000 for furniture and fixtures, and she looked for short-cuts to save money. For example, she used shower curtain hooks for hanging jeans and bought them on markdown all over town. Then, she contacted the manufacturer to purchase them wholesale.

She also visited several motorcycle dealers in town to let them know what she was doing. She asked them to donate posters to help her decorate the inside of the shop. This obviously saved in some decorating expenses, but, more importantly to her, she wanted all motorcycle enthusiasts to feel welcome in her shop, regardless of what brand of motorcycle they ride.

Getting the word out

With a new shop, a sign, consigned inventory, all Burgess needed was customers, and it didn’t take long to find them.

“Motorcyclists are a tight-knit group. Word of mouth is very powerful with all the connections of biker events and groups,” says Burgess. “I was counting on this, along with doing personal presentations at motorcycle riding groups’ monthly meetings. I didn’t have an advertising budget.”

After soliciting her friends and connections for consignments, Burgess had already developed interest in her business. Then she started networking through all of the motorcycle associations, shops and events across town, and people started coming in.

One of her first customers was a relative of an employee at Channel 4. The customer passed the word on and the connection resulted in a story on The Morning Show shortly after 2nd Ride Around Consignment Shop opened.

“I had a lot of people come in after that spot ran, and they said they heard about it on the news,” says Burgess. “You just never know who is going to walk into your store and what they will do for you.”

Re-cycle business is rolling

After less than four months of business, Burgess has more than 55 consignors at 2nd Ride Around Consignment Shop.

“What a ride this has been! I knew it would work; however, I never dreamed it would take off like it has,” Burgess explains. “If it keeps going this way, I’d like to start looking at more locations.”

The idea for more locations has always been part of the big picture for Burgess. “I’d like to offer more locations, and one day, take the concept nationwide with franchise opportunities.”

Sidebar 1

2nd Ride Around Consignment Shop

11018 OId St. Augustine Road, Suite 111

Jacksonville, FL 32257

904-379-9167

www.2ndridearound.com

2nd Ride Around Consignment Shop accepts: men and women’s motorcycle apparel, jeans,

T-shirts and shoes, as well as motorcycle themed purses, jewelry and home décor items. Consigned items are on the sales floor for up to 60 days. The sales price is based on competitive market price and brand research. Consignors will receive 40% of the selling price excluding sales tax. Items that do not sell at the end of the 60 days can be picked up by the consignor or donated to the charity of the consignor’s choice. 2nd Ride Around works with Hubbard House, Humane Society, and the Vietnam Vets.

Sidebar 2

A Passion for riding

Debbie Burgess wasn’t always a motorcycle enthusiast. It wasn’t until she met her husband, Jim, that she got the riding fever.

“I can remember seeing folks on motorcycles back in the ’90s when I was commuting to my corporate job in downtown Jacksonville,” she explains, “and I would think that they must be nuts doing 65 miles per hour on a motorcycle.”

Burgess met her husband in 2002 and he liked to ride; by 2005 she was riding her own motorcycle. “I quickly started enjoying riding, even when I was on the back. There is something about being on a motorcycle, with the wind blowing through your hair, that allows you time away with no worries. That’s what gets you hooked on the lifestyle.”

They both enjoy riding so much that they rented motorcycles on their honeymoon and rode the coastal highway in California. “It was a great thing for us to share on our honeymoon—a common interest that we both have a passion for.”

When she lost her job, Burgess’ husband suggested doing something she would enjoy this time around. As she began to think of what kind of job she would enjoy, riding her bike with Jim came to mind, but she knew no company was going to pay her to do that. She began to think about how she could work with people who shared her passion for riding. She knew she’d had enough of the corporate traveling life—flying all over the country all week and only home for the weekends.

“I thought it would be a given success story because it would be owned and operated by motorcycle enthusiasts that understand the lifestyle,” Burgess said. “I wanted to make a difference by doing something for all the bikers that are always willing to give to others. At the same time, I could help our local economy by opening an independently-owned store in my Mandarin community.”

Ashley Feit provides writing and public relations services to small business. She can be reached at acfeit@att.net.

His business model with nonprofits spurs growth         

By Ashley Cisneros   

A slow economy didn’t stop Brock E. Fazzini from entering the saturated coffee market three years ago. Neither did the bankruptcy sustained by his parent company. Instead of being put off by a sluggish economic outlook, the 24-year-old CEO has led Fazzini’s Coffee & Tea to exponential sales growth. His secret: an unorthodox business model based on giving away generous profit percentages.

A natural businessman

Fazzini grew up in a business family in Frostproof, Fla. “No one in my family had degrees, but everyone had their own business, especially in real estate and development,” says Fazzini, who showed early interest in business as state president of the Future Business Leaders of America, an organization that helps prepare high school students for careers in business.

After studying at the University of Central Florida and Valencia Community College (admittedly taking only “fun” classes) and dancing two years in the Festival of the Lion King theater show at Disney’s Animal Kingdom, Fazzini moved to Jacksonville, where he eventually became a coffee master and a learning coach at Starbucks. He studied Howard Schultz’ book, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, as well as all of the company’s policy and procedure manuals.

“I admired [Starbucks founder] Schultz’ idea about bringing community into business and the notion of selling an experience,” Fazzini says. Coffee (and Schultz’ philosophies) got into his “blood” and never left—even after he joined Dixie Sales Company USA, Inc., a photographic film distributor. There his boss, Harry Shmunes (who is now Fazzini’s Coffee & Tea president and chief operating officer), recognized his passion and asked him to head up a coffee business, with backing from Dixie Sales. In 2007 Fazzini’s Coffee and Tea was born.

Sustainability matters

From the beginning, Fazzini and his team focused on selling wholesale beans and a tea line. “I also wanted my company to serve the highest quality coffee and revolve around community,” Fazzini says. Today, Fazzini’s Coffee & Tea offers 100% USDA Organic, kosher, halal, and Transfair-certified fair trade products. Cultivating an environmentally and socially responsible business was paramount to Fazzini. The company donates 10 cents for each product sold to the Trees for the Future Foundation (www.treesftf.org), which plants tree saplings in deforested rain forests. Fazzini’s Coffee & Tea has planted tens of thousands of saplings in Kenya, Guatemala, and El Salvador.

“Trees for the Future lets us choose the species of tree to plant,” he explains. “The type we prefer is called the moringa tree, which is extremely fast growing. Although it seems unbelievable, within nine months a sapling grows to be 20 feet tall. And almost every part of the moringa tree can be used for human and animal consumption—as well as for biofuels. Scientists claim this tree may solve the world hunger problem,” Fazzini says. “What is amazing is that planting trees in deforested areas has caused dormant species of plants to reactivate and grow. This replaces oxygen, improves the biodiversity in the region, and creates jobs.

“A lot of business owners think that they can’t afford to take up green initiatives, but purchasing coffee and tea from us allows them to play a pivotal role in planting trees,” Fazzini says. “We even recognize our customers for their sustainability efforts. When a customer’s sales reach the point of planting 400 trees, it gets naming rights to a new forest and we present a certificate from Trees for the Future.”

The role of nonprofits

In addition to being environmentally conscious, Fazzini is passionate about nonprofits. He serves on boards for the American Red Cross of St. John’s County, the Leukemia and Lymphoma Society and the Cultural Center at Ponte Vedra Beach. He also has served as an Ambassador to the Jacksonville Regional Chamber of Commerce, and chairs the board of directors for Oasis, the GLBT Center of Northeast Florida.

Fazzini leverages his relationships with nonprofits to align with their corporate partners. A corporate partner that uses Fazzini’s coffee service effectively increases its giving to the nonprofit because up to 50% of the profits from the coffee sold in its establishment go to the agency. In the Northeast Florida area, since July of 2009, all no profits that enter into a relationship with Fazzini’s are part of the HandsOn Jacksonville partnership. This relationship leverages charitable donations by Fazzini’s from 20% to 50%, depending on the nonprofit gifting structure under which the relationship falls.

Fazzini also offers nonprofits a customized Fazzini’s Coffee and Tea Web site. Just as with corporate sales, a generous portion of profits made through Web-site sales goes back to the organization. 

Judith A. M. Smith, D.M., president and CEO of HandsOn Jacksonville (www.handsonjacksonville.org), calls Fazzini’s business model “brilliant.”

“Brock’s company blurs the lines between the for-profit and nonprofit worlds,” Smith says. “His business model makes use of the access and relationships of nonprofits to move a business forward. There are a lot of good causes and good organizations that will benefit from this type of entrepreneurial philanthropy.”

Working with HandsOn Jacksonville helps Fazzini to familiarize as well as establish credibility with more than 100 worthy nonprofit organizations. Smith says that in 2009 Fazzini’s company contributed at least $20,000 to Jacksonville nonprofit organizations and in excess of $75,000 in-kind. Fazzini’s Coffee and Tea has earned residual and in most cases significant revenue for over 60 agencies. 

Fazzini says a total of 50% of the company’s  Northeast Florida sales profits go back to nonprofits—plus approximately 3% goes to reforestation projects. With nonprofits looking for revenue and companies looking for ways to give back, Fazzini’s model works.

Like many businesses, Fazzini’s Coffee and Tea has had its challenges, especially when its parent company was placed into Chapter 7 bankruptcy. “When Dixie Sales went under, Fazzini’s had to start over. All of our assets were Dixie’s, but we were so good at customer service no one knew. It was a depressing time, but in the end, it’s just another interesting part of who we are,” Fazzini says.

In the future, Fazzini plans to replicate the model used with HandsOn Jacksonville with other HandsOn Network affiliates located in target markets, such as Atlanta, Dallas, Houston, or Denver. “We want to start using this exact same model in other cities. We will grow due to our partnerships,” Fazzini says. “We’re adding values to a cup of coffee; we are doing well by doing good.”

Ashley Cisneros is a contributing editor to Jacksonville Small Business Advantage. She can be reached at ashleycisneros@gmail.com.

Fazzini’s business model: Unorthodox but successful

Fazzini credits the growth and success of his coffee business to an unorthodox business model: He gives away a large portion—53%—of his Northeast Florida sales’ profits. The model is based on three things:

• A partnership with local nonprofit organizations,

• A commitment to sustainability, and

• A desire to give back to the community.

Here is how it works:

Fazzini partners with HandsOn Jacksonville, an umbrella nonprofit organization that serves as a “matchmaker” between volunteers and projects benefiting its 95 members. HandsOn arranges for Fazzini to make semi-annual presentations to members to explain how his company can help them in their fund-raising efforts.

When an organization agrees to partner with Fazzini, an executive from the nonprofit arranges a meeting with a decision-maker at one of the nonprofit’s corporate benefactors. During that meeting Fazzini explains that by using his coffee and tea service, the company:

• Supports fair-traded, organically grown products;

• Provides Roasted to order coffees

• Helps reforest rain forests; and

• Gives between 20% and 50% of profits back to the agency, depending on its gift structure.

Fazzini says his model removes the need to advertise or cold call, but by partnering with nonprofits, he has achieved an approximately 95% success rate.

By Linda Segall   

By viewing the old we learn the new — Chinese Proverb

It has been said, “The more things change, the more they stay the same.” Jacksonville Small Business Advantage talked with three retired small business people who reside at Taylor Residences, a community of adults age 62 or older, to discover if that adage is true. What they told us showed that although some things in the business world have changed (technology and workplace demographics, for example), others (such as credit problems and a need to work long hours) have not.

Louise Register, Connie DeLoach, and Ellis Touchton shared some “senior moments”—memories of their years running a small business— as a way to help a younger generation appreciate how business has changed as well as how to take a shortcut to success.

Our retirees

As co-owner with her husband (deceased) of Register Sod & Turf Co., a sod and landscaping company that was located, until recently, on Beach Boulevard, Louise Register, age 94, was active in the company for 47 years until she retired in 1985.

“My husband and I got into the business accidentally,” she said. “He didn’t like to work for other people, so he started landscaping and cleaning up yards for other people. We’d buy shrubbery and go down south to buy sod. People started coming over and asking to buy some of what we had, and pretty soon we were making enough to pay for our load. Then we began to get more landscaping material and developed a backyard nursery. We stayed in one location for 20 years. Sometimes we had upwards of 20 employees during the season.”

Connie DeLoach, 78, is a retired realtor whose business, First Class Properties, was located in Daytona. Like Louise, she “fell” into her business. She was a stay-at-home mother to her three children, but when the last of them went to school, she began working as a secretary in a property management office in Jacksonville. “I got my broker’s license, never thinking I would have the opportunity to use it.”

That changed when Connie moved to Daytona and began to work for a developer of Pelican Bay. “When the builder went under, the Pelican Bay advisory board asked me to stay as its property manager and agent.” For two years, she worked onsite. Then she opened her own office and ran it as a sole proprietor for a couple of years. As she grew the business, she hired agents and took in partners. She ran her company for 10 years before moving back to Jacksonville in 1992.

Although he was not a small business owner, Ellis Touchton was a vice president with Skinner Dairy Co., and worked for the company for 37 years. He achieved his executive position in a classic manner—by working up through the ranks. “I started off loading the trucks, about 3 o’clock in the morning. Next, they gave me the order processing for the next day. Finally, I was put in charge of a few routes, four or five of them. Jacksonville was growing tremendously fast back in those days, and we had to keep putting on more routes… I was asked to be a sales manager.

He explained how he became a vice president in the company: “The owners often flew around in a company airplane. They were fearful that if they had a wreck and were all killed there would be nobody to run the business. They made me vice president so there would be somebody to run the company.” Retiring from the dairy when he was 65 in 1981, he held that position with the company for 15 years.

Challenges

Advantage: What was your biggest challenge as you ran your business?

Connie: Computers! It took me three years to let go of paper. I just could not figure out how the computer worked; I didn’t trust it. I’m one of those people who have to know why something works. It was tough, but I finally got to where I really liked using computers, but it was the hardest thing.

Louise: Sometimes it was hard to make payroll and pay the bills. When the weather was bad, business was bad. We had to borrow money and work hard to pay it back. Sometimes we just broke even. We had one man [a banker] who was real good about loaning us money. We’d even mortgage our house. It was hard; sometimes we’d do without. If a payroll was hard to make, I would do without my salary so the men could have their money. But we managed and did all right. We even bought enough property to build our home and bought the property on Beach Blvd.

Ellis: One of my problems was that I was a little younger than some of the other people. As the promotions came, I had to go over older people, who didn’t like it. We had to make some “adjustments” [firings]. The boss called me in and said, “If so and so gives you any trouble, we’ll just pay him three months.”

Biggest surprise

Advantage: What was the biggest surprise you had as a small business owner?

Louise: It was hard to balance my time. I worked from daylight to dark at the nursery, then came home and worked. And when I was home with my five children, I was close enough they could get me if they needed me. I was sales lady, bookkeeper, everything. I even propagated the plants. It was hard to manage everything.

Connie: The hard work and long hours. I worked by myself for the first two years, from 9 to 9. I didn’t even have a secretary. My husband had been in sales. I never understood why he didn’t like to take phone calls at night, because I figured that was money calling. But after being in business with rental properties, I found the phone rings at all hours and you have to get up at all hours and do things I never thought I would have to do, especially when the maintenance man wasn’t there.

Ellis: I was surprised I had to get involved in the lives of the men I managed—personnel issues. A call might come in at 5 a.m. One time I got called and the person said, “You better get out here. We have a man with a gun waiting to kill one of your salesmen for dating his daughter.” The problem was that the salesman and the woman he was dating were both married. We had these surprises all the time. During my time, the ladies were invading the workplace, so there was more romancing going on all the time. The very ones you didn’t expect to have these problems were the ones who did. We even had to let people go and it fell on me to do that. I guess that was one of the worst things I remember.

Keeping up

Advantage: Times change. How did you manage to stay on top of trends?

Connie: Real estate became hard because of the regulations and paperwork. I took courses and got a GRI (Graduate Realtor Institute) in property management. Finally I hired an attorney to help me stay on top of everything.

Louise: Continuing to learn was important to our business. We had a state association, and we’d meet every so often to keep up to date. We also had one man who was really good at aerating and propagating and I’d learn a lot from him.

Ellis: You had to be willing to learn new things and do new things. When I drove a milk route, I was the first to switch to all paper cartons. Milk was delivered in glass bottles. It was a lot easier to deliver paper cartons; you didn’t have to bring back the bottles. I used to go up to Cincinnati with my boss where there was a meeting once a year. We’d find out what others were doing. For example, we found out one time they were putting milk in gallon jugs. We weren’t doing that here. So we came back to Jacksonville and starting using the gallon jugs; we were the first to do that in the city. We also put in the drive-through dairy stores. The stores took away from the route sales, but made it easier for consumers, so we sold more.

Motivating employees

Advantage: Each of you had employees. How did you engage them to do their best?

Louise: Our employees knew my husband would not fire them if they did a good job. One of the men worked for us for 40 years and retired when he was 65. My husband was good to employees. He’d go pick them up at their homes and bring them to work. He treated people with respect. They knew they could depend on him, so they would go out of their way to do right for him.

Connie: My employees were real estate associates and were on a commission schedule. When sales went up, their commissions grew. Money was a motivator.

Ellis: It wasn’t easy to engage people. We found older people worked better than young people. Employees made what they earned through commissions. We had meetings and incentives and sales contests. We sometimes brought in motivational speakers to get them to work harder and make more money. Money talked.

Insights

Advantage: What kind of advice would you give to small business owners today, based on what you have learned from your career?

Connie: Always be honest; don’t try to scheme. Find your passion and be happy in your job. It’s not worthwhile working at something you don’t like.

Louise: There is no free lunch. Go out and find the jobs. My husband had to do that when times were tough. We’d get in the car and drive around looking for where people were building houses. He’d talk to the builders about putting in landscaping and get jobs that way. 

Ellis: Don’t lie; what you did might get you into trouble at first, but if you lie, you’ll have more trouble. And be willing to start small. You can’t start out high on the totem pole.

Linda Segall, linda@advantagebizmag.com, is editor of Jacksonville Small Business Advantage. The three retired small business people reside at Taylor Residences, part of Taylor Foundation Services, www.taylor-residences.org.

SIDEBAR 1

What has changed?

When the three retirees were beginning their small business careers, a number of changes have occurred in business:

• Demographics. In 1950, approximately 33% of women over the age of 16 participated in the labor force. Today, that rate is approximately 60%. Among women ages 25 – 34, only about 50% worked in 1975, whereas 75% work today.

• Laws. The first civil rights laws did not go into effect until 1964.

• Technology. Manual typewriters were still used in offices, although the popularity of electric typewriters increased significantly when IBM began producing them in 1958. In 1961 IBM introduced the IBM Selectric typewriter, which permitted faster data input, since it replaced typebars with a “ball” of letters. Eventually 75% of all typewriters used in offices were Selectrics. The Apple I personal computer was first sold in 1976; IBM introduced its first PCs in 1981. Car phones grew in popularity in the 1970s, but were still considered a luxury.

SIDEBAR 2

What has stayed the same?

• Need for continuous learning. All of the retirees said they needed to “stay on top.” The need for continuous learning remains today.

• Credit problems. Small business owners in the past have had to find credit to make it over slow periods.

• Human needs. Workplace surveys indicate that the top employee need is to be treated with respect and dignity.

• Long hours. Hard work with little time off was the norm for our retirees, the same as it is today.

Area small business owners find satisfaction and success through philanthropy   

By Ashley Cisneros   

Local small business owners find that supporting philanthropy helps the success of their small businesses. In addition to receiving personal satisfaction from supporting their surrounding communities, business owners report benefitting from their affiliation with respected charities. They receive increased exposure to new segments of the market, forge deeper relationships with clients, and network with fellow entrepreneurs and corporate executives.

These benefits often result in new business leads and work referrals.

Giving doesn’t always mean conferring money. In tough economic times, many companies find it difficult to give monetarily to charitable and philanthropic initiatives. Tourea Robinson, president of the Association of Fundraising Professionals Florida First Coast Chapter, says that most small business opt to demonstrate their support of philanthropy through in-kind donations and services. Robinson reports that corporate and small business giving has remained steady in Jacksonville in 2009.

“Business owners want to know that their contributions are being used in an effective way to improve the community,” she says. “They also appreciate the recognition they receive by giving, and look to have their name affiliated with a certain philanthropic program. They want to be good corporate citizens in the communities in which they operate.”

Instead of contributing financially, several Jacksonville area small businesses donated time and talent as a birthday gift  to Wolfson Children’s Hospital. The hospital, part of Baptist Health, will celebrate 55 years of providing premium pediatric care in 2010.

To commemorate the occasion, the hospital is hosting the One to Grow On Ultramarathon on January 30, 2010. Marathoners have each committed to run 55 miles in honor of Wolfson’s patients. Each mile will be dedicated to a child who has an amazing story at Wolfson.

Julia Handley, Wolfson director of development, calls the involvement of Michael LeGrand Photography, iDrive Marketing, and Hire Methods, Inc., “absolutely essential” to the development of the ultramarathon. The owners of these three small businesses say that their  involvement with the event was good for business.

Increased exposure

Michael LeGrand of Michael LeGrand Photography has built a business providing photography services to companies, educational institutions, hospitals, architecture firms, and more. Clients include The Home Depot, Baptist Health, and Visit Florida.

LeGrand, whose business mostly entails shooting business professionals and physicians, took photos of 55 children for the Wolfson event. The photos appear on the event website at Wolfson55.org and associated materials. (Editor’s note: Some of the photos illustrate this article.)

“My normal work is pretty serious for the most part, so this was a fun project for me,” LeGrand says. “I was especially excited because this is my first opportunity to do philanthropy work.”

LeGrand believes that business owners who get involved with philanthropy projects benefit from exposure, but more importantly from the good karma.

“It definitely gives us more exposure than we would otherwise get,” LeGrand says. “It helps us grow in that respect. Aside from that, doing good to others makes others do good things for you.”

LeGrand says that his involvement in the project allows him to contribute to his community. Businesswise, he says that he also benefits from new additions to his portfolio.

“Larger corporations have more opportunities and ways to give back either with manpower or money, whereas small businesses are limited by manpower and finances,” LeGrand says. “We give back by providing the services that we give to our regular clients to foundations and charities. I would definitely consider contributing to a philanthropic project again.”

LeGrand has donated five day-long photo shoots, plus photo editing services for each child. He says that he usually charges $1,200 for a day-long shoot.

“I photographed a set of four-month-old twins to toddlers who were barely standing to older children,” LeGrand says. “I did the photo shoots at the children’s rehabilitation center in one giant room filled with toys, maps, bikes and scooters. I wanted to make sure that each photo really represented the child.”

Networking opportunities and referrals

Alex Benavides founded iDrive Marketing almost two years ago to provide quality branding, marketing and advertising services to businesses without the large ad agency premiums.

Benavides become involved with the Wolfson marathon though his clients Clint Drawdy and Chad Perce of Hire Methods, Inc.

Benavides leveraged his full-service advertising agency to help coordinate the Wolfson project. He developed all of the marketing materials including the Web site, posters, fliers, and a Facebook.com event page. Business owners benefit from giving back to the community as long as certain conditions are met, Benavides says.

“You have to be doing this for a good purpose,” Benavides says. “You can’t get involved with charity work to make money; that’s not how this works. You have to really care about the cause, and be willing to follow through with what you promise. You have to be authentic. This truly reflects to the people who are involved with the project. When you care about the people, that’s when you get the true networking benefit.”

Due to his involvement with the Wolfson marathon, Benavides has already generated two leads. In addition to helping Wolfson, iDrive Marketing has also contributed Web site development services benefiting First Coast No More Homeless Pets (FCNMHP). Before launching iDrive Marketing, Benavides performed philanthropic work with another agency benefiting the Brunell Family Foundation, the North Florida School of Special Education, and the Sister to Sister Campaign, to name a few.

Most of Benavides’ contributions to philanthropic projects have been through service.

“I’ve contributed to projects by finding resources for charities and leveraging my relationships with other vendors such as printers,” Benavides says.

One of the biggest challenges for Benavides was finding a vendor to manufacture 55 three-foot glass birthday candles for the event. The Wolfson 55 committee is also planning a charity concert in the spring.

“If you would have asked me how to go about planning a concert six months ago, I wouldn’t have had a clue. Now I do,” Benavides says. “I’ve learned to stretch dollars and do amazing things with a modest budget for clients. The more avenues you have, the more creative you can be with your solutions.”

Benavides estimates donating 500 to 525 hours to the Wolfson project.

“You have to be genuine when giving, and it will come back to you,” he says. “The doctors at Wolfson can do amazing things to improve a child’s life. Parents don’t have to fly to a major metropolitan city; they can get quality care right here at home.”

Stronger client relationships

Business owners Clint Drawdy and Chad Perce make service of paramount importance in their business practices at Hire Methods, Inc., the parent company of Medical Methods and iMethods Technical Recruiting.

Drawdy and Perce have been affiliated with Baptist Health for years, and Perce serves as chair person of the Wolfson event.

“Service is a large part of the culture here at our company,” Perce says. “Wolfson speaks to us both professionally and personally because of the important work they do to impact children.”

Perce finds that good things happen to business owners who serve their communities.

“There is a fine line between genuinely and authentically being involved in the community and having selfish motives for gain,” he says. “Service is rewarding for the soul. Positive things happen to business owners when they give genuinely. These include forging deeper relationships with clients, gaining trust and credibility, and winning referrals through networking. This is about rallying around something bigger than yourself.”

Drawdy believes that even smaller businesses can have a tremendous impact on the community. He says that getting involved can boost a company’s morale and increase retention.

“When businesses get involved with philanthropy, they can give their vendors opportunities to give back to the community as well,” Drawdy says. “In addition, business owners also have the opportunity to meet with company executives and CEOs that would otherwise be difficult to meet.”

The owners say they haven’t spent a lot of time quantifying the services they’ve contributed to the Wolfson 55 event.

“In this economic environment, we did more in-kind services this year than we have any other year,” Drawdy says.”We love the fact that we give our time. If we weren’t involved in the Wolfson project, many of the people in our network would not be involved either.”

Drawdy has advice for business owners wanting to get involved in philanthropic activities.

“Speak to your personnel and find out what they want to rally behind,” he says. “Find a cause that your staff is passionate about. Once you get a handle on that, opportunities will come more naturally.”

Perce encourages businesses to not select a cause blindly.

“Picking a charity simply because they are a big name is not the way to go,” Perce says. “Slow down and ask questions. You will find plenty of opportunities to serve. Don’t think you’re too small. No one is too small to give. Challenge yourself to get involved. If you’re not involved, get involved.”

Ashley Cisneros is a contributing editor to Jacksonville Small Business Advantage. She can be reached at ashleycisneros@gmail.com.

SIDEBAR

Ultramarathon culminates Wolfson birthday celebration

An ultramarathon in which a select group of runners will complete 55 miles as part of the One to Grow On celebration in honor of Wolfson Children’s Hospital’s 55^th birthday will be Jan. 30. A mini-marathon of five miles—Run 5 to Keep Kids Alive—will also be held on the same day. Runners will complete the same five-mile loop as the ultra marathoners. The events are fund raisers for the hospital and culminate the birthday celebration.

More than 120 local companies are supporters of the One to Grow On celebration. Individuals and companies wishing to support the hospital can donate at www.wolfson55.org or call 904-202-2881.

By Ashley Cisneros    

People can’t stop talking about Three Layers, A Coffee House. The Springfield business was named the Best Coffee House of Jacksonville by Folio Weekly, gained coverage in Southern Living, and garnered a visit from Gov. Charlie Crist. Like many other entrepreneurs, partners Jeff Wright and Shawn McGuire have an interesting story.

The couple moved to Florida from Atlanta in 2007. McGuire was successful in the construction and real estate industries. Wright worked in health care, and made special-order cakes from his home kitchen for more than a decade.

For as long as Wright has been making cakes, people have told him that his cakes were the best they’ve ever had. Guests have called the hosts of parties where Wright’s cakes were served because they wanted to compliment Wright on his cakes. They even sent flowers. Friends and family urged Wright to start a business.

McGuire suggested that Wright name the would-be business. Months later, Wright announced that he would call it Three Layers, A Coffee House. The name represented the three layers he used in every cake he baked  and his belief that true inner peace embodies the mind, body and spirit—three layers.

Months after deciding on a name, the opportunity to launch Three Layers presented itself, but it was completely unexpected.

New Floridians

Wright and McGuire moved to Orlando after McGuire was recruited by a real estate firm in Central Florida. But they discovered the city wasn’t the right fit for them.

“We started to consider other areas of Florida, and we had a few requirements for our new home,” Wright says. “It had to be a place where Shawn could sell real estate, specifically historic homes. We’re urban dwellers, so it had to have an urban core. And it had to be near the water.”

After reviewing city information on the Internet, Wright and McGuire kept reading about the historic Springfield neighborhood of Jacksonville. After a visit to the active community, they were hooked.

Some locals tried to persuade them not to move to Springfield.

“People told us, ‘Oh, you don’t want to be there,’” Wright says. “The neighborhood was rundown and crime-infested about 10 years ago. But it’s nothing like that now.”

McGuire began searching for offices for his new real estate venture. He found a four-unit building at 1602 Walnut Street. Although he decided it wasn’t suitable for his real estate office, he wanted to show it to Wright because of the unique architecture.

When Wright walked in the 1925 building, tears filled his eyes, McGuire says.

“He turned and told me, ‘This is it. This is where Three Layers is supposed to be,’” McGuire recalls.

The building offered not only a place for a new business, but a place for the couple to live as well.

Their decision was a surprise to both of them. “I remember telling Jeff, ‘A coffee house? But, we’re looking for a place for the real estate business,’ Three Layers wasn’t on our radar at that point,” McGuire says.

But Three Layers was meant to be.

A financial plan

“Starting Three Layers was a new experience for us,” McGuire says. “I’d done construction, restoration, and real estate, but nothing like this before.”

Another entrepreneur gave McGuire a contact at the Small Business Administration (SBA). The SBA required McGuire to produce a business plan. He spent three days writing his first business plan using Business Plan Pro software. He used a how-to book about opening a coffee house, and demographic information from the Springfield Preservation & Revitalization (SPAR) Council.

The partners secured a loan from CenterBank of Jacksonville guaranteed by the SBA, and put down $60,000.

“We did an interest reserve deal. It included $175,000 to cover the cost of the building, $50,000 for build-out, $25,000 to cover our mortgage payments while we got started, plus $25,000 in equipment start-up costs,” McGuire says. “The interest rate was good, and it all happened pretty fast. If we would have pursued the same loan now that we did back then, the scenario would be very different.”

A budding business

Wright and McGuire worked tirelessly to build Three Layers, A Coffee House, in only a few months. A then-threatening recession presented challenges, but they believed in the vision for the coffee house.

“Shawn had his real estate business, and I was bringing in income from a part-time job at Memorial Hospital,” Wright says. “We lived in the same building of the coffee house, and we didn’t have a mortgage payment thanks to the great deal we received from the SBA. We knew we would have to put in long hours and hard work, but we figured if we can make it in this economic climate, we’d be OK.”

The owners say that their slogan, “Live simply, love generously, care deeply, speak kindly,” is not only a foundation for Three Layers, but a personal mantra they live by. Wright received it an e-mail several years ago, and it stuck with him.

The partners conducted guerilla market research by visiting coffee houses each time they traveled to a new city. They studied the corporate giants, networked with local roasters, and researched equipment.

“We asked a lot of questions to find out who was using what equipment, the advantages and disadvantages of using certain products, and what changes the owners would make if they could,” Wright says. “We checked out the prices other owners were charging, too.”

The menu was designed to showcase Wright’s treasured recipes from family and friends. The recipe for Italian Cream cake, Wright’s favorite, came from a friend’s family in Knoxville, Tenn. The cookie recipes originated from Wright’s mother, and his English Muffin Bread recipe came from his father. The partners drew non-compete and confidentially agreements to protect the recipes. Today, they’re also trademarking and copyrighting the best-selling “Jeff Squares.”

They also found great deals on equipment.

“Sometimes people just gave us things,” Wright says.

The marketing plan was simple. The partners printed fliers and spoke to everyone they met. As people visited the coffee house, word spread quickly, and soon the press began to call. A visit from a local television producer resulted in news coverage.

McGuire says that the first operational plan entailed him opening Three Layers in the morning, tending to the long lines, and closing at 11 a.m. Then, he’d work on his real estate business. Wright would leave his part-time job at 5 p.m. to open the coffee house by 5:30 p.m.

 “Well, there just weren’t long lines at the beginning,” McGuire says. “We had a very limited menu in the beginning consisting of cake, coffee and espresso.”

Soon customers were asking for lunch.

Expansion

Wright and McGuire decided to repurpose their guest bedroom to give Wright more room to prepare food. Out came the guest bed, and in went new commercial equipment.

After finding a four-bedroom house, only steps from the coffee house, Wright and McGuire moved out of the building. They turned their old bedroom into a special events room, and opened a wine bar called The Cellar.

They also hired a landscaper to transform their courtyard into a lush Zen Garden featuring reclaimed bricks, drought-tolerant bamboo, and underground water storage ponds. Now, the Zen Garden is reserved at least once a week for birthdays, receptions, book club meetings, and more.

The owners have also given back to the community through events such as the Springfield Autumn Music Festival that benefitted the American Cancer Society and The Leukemia & Lymphoma Society.

The buzz about Three Layers, A Coffee House, has translated to awards, press coverage, and even a visit from Gov. Charlie Crist.

The governor was in Jacksonville to sign a piece of legislation. When he told his local driver he wanted to go to Starbucks, the driver told him he should try Three Layers.

“Gov. Crist and his entire entourage came to the coffee house,” McGuire says. “We had a guitar player during lunch that day. Gov. Crist borrowed his guitar and played a Beatles song for us.”

Challenges and goals

Wright says it is still a challenge to get some native Jacksonvillians to visit Three Layers, A Coffee House, because of Springfield’s stigma from years ago.

“We actually had some part-time applicants call and cancel their interviews once they looked up the location of the coffee house, or when their family or friends heard that the business was in Springfield,” Wright says.

Positive press coverage and word-of-mouth have helped the owners combat the old reputation of Springfield.

McGuire says that one of the partners’ biggest goals is to implement processes to make the coffee house so systematic, that it can be run easily.

“This will free Jeff and me up to focus on other ventures,” McGuire says.

McGuire calls the success of Three Layers more of a statement than a cause for the neighborhood.

“We thought we’d offer a great place to hang out, but we soon became the flagship business for a neighborhood long forgotten. We proved that, yes, you can start a business in a once horrible neighborhood and succeed.”

Ashley Cisneros is a contributing editor to Jacksonville Advantage. She can be reached at ashleycisneros@gmail.com.

SIDEBAR

Three Layers, A Coffee House

1602 Walnut Street

Jacksonville, FL 32206

(Corner of E. 6th Street and Walnut)

904-355-9791

Hours of Operation

8 a.m. to 10 p.m., Tuesday through Thursday

8 a.m. to 11 .m., Friday and Saturday

8 a.m. to 10 p.m., Sunday

Closed Monday

www.threelayersacoffeehouse.com

threelayers@gmail.com