Evolution of an Enterprise, Chapter 10: 10 Burning Questions

Education is key to the Evolution of an Enterprise series.

Jason Mitchell and Michael Mardis, owners of theworkshop 308 LLC, will go through many ups and downs during their first year as business owners, and it’s important that readers have the opportunity to learn from their journey.

Their design studio at 308 W. Commercial St. is just two months old. There’s still much to experience, but Chapter 10 seemed like an appropriate time to get some outside perspective on 10 burning questions.

Springfield Business Journal asked experts in various fields to critique the entrepreneurs’ performance thus far.

Question 1: Mitchell and Mardis started theworkshop 308 with only $20,000. They will likely soon seek a bank loan. Did they start their business with enough capital? What other financial advice would you give them?

Bob Hammerschmidt, Commerce Bank regional president: Generally, in terms of the capital assets, you usually have about 20 percent or 25 percent down, and usually a business will need about three months’ operating income on hand. If you consider just those very, very general benchmarks and what the company wants to do in terms of designing furniture, designing homes, building furniture, maintaining two different inventories – one at Staxx and one at their shop – they are undercapitalized. As to what they need, that really depends on how much business they’re going to have.

My biggest advice to them is to narrow their focus at first, especially since they have limited capital. … They’re really going to get easily distracted unless they have a plan.

Question 2: Mitchell and Mardis started theworkshop 308 before developing a business plan. Did they jump in too quickly?

Robert Wyatt, Drury University Breech School of Business Administration director: We advise everybody to do a business plan. That’s not only for startup companies (but) that’s for companies already in existence. It evolves into more of a strategic plan at some point. … They also need to make sure that the product is something that Springfield will buy. Many times we have people who have a fantastic product, and they just don’t have customers that want to buy. Market research would help them identify whether that need is there or if they need to generate that demand. … Entrepreneurs are dreamers. They are big-picture (people), so the whole purpose behind the planning process is to make them consider some of those business dimensions.

Question 3: Your firm is one of the top home builders in Springfield. Mitchell and Mardis want to design homes. Though their concepts for green homes are different than traditional designs and construction, what advice could you give them?

Kenny Ross, Morelock-Ross Group of Cos. co-owner and co-founder: The most important thing is (to) be good listeners and make every effort to do what their clients want and expect, and provide what the clients want rather than … what they want. That’s two different things. … If they’re going to be at the forefront of getting into the green building ideas, they’re going to have to educate (builders). … It’s going to be a teamwork process, because they’re going to have to blend the traditional ideas that are accepted in the market along with the new ideas that they’re trying to put forth. Practicality and economy are going to be important.

Question 4: You’ve formed and owned several small businesses, starting with the establishment of Julie’s Chewies Gourmet Cookies in 1988. What lessons did you learn along the way that could help Mitchell and Mardis?

Julie Higgins, Higgins Marketing LLC founder and owner: Just like Mitchell and Mardis, I firmly believed in my product and was passionate about getting the word out. … Mitchell and Mardis have a niche, which is designing “green.” However, businesses launching innovative ideas must have a market strategy, which informs and educates the public. Without proper information and education, the first response from a potential client will be “no.”

I would advise them on their Web site to inform and educate (people on) the meaning of “green.” The 20s and 30s age brackets have a better understanding of what it means to be green. However, some of the over-40s and up might think they need to wear Birkenstocks and go hug a tree, which isn’t (true) at all. Simplify green to the public.

(Also,) I wish years ago I would have known the benefits of outsourcing and tapping into talents outside my business. Now, many (people) work virtually and it is easier to, and at times more cost-effective to, outsource than to hire.

Question 5: Mitchell and Mardis took some flak from the architectural community because they called themselves architects before earning their licenses. They’ve since recanted their position and call themselves designers. Have they damaged their chances locally of working as architects someday?

Chris Ball, Jack Ball & Associates Architects PC principal and owner: I don’t think one has anything to do with the other. I think their chance of working locally as an architect someday has a lot more to do with … what kind of architect they become. … I think the issue with them calling themselves architects is a serious one, and I think they’ve responded well to it. That’s over.

Question 6: You’re known for creating K-Man in Jordan Valley Park. You, like Mitchell and Mardis, depend on people understanding and enjoying the fruits of your creative labor to be successful in business. What are some unique challenges creative businesspeople face?

Russ RuBert, RuBert Studios sculptor, founder and owner: First and foremost, I say to theworkshop 308: Springfield absolutely needs you. Don’t let conservative comments stop you from becoming a part of the creative fabric of Springfield. … (They should help) the more established architectural firms connect with and understand (younger) clients while developing that client base themselves. (That) should be a business focus as they complete their certification. As a young, creative business, I believe that is their true power (and) a great potential revenue stream.

Question 7: Theworkshop 308 primarily offers two services: designing environmentally friendly homes and designing and building environmentally friendly furniture. Are they effectively defining their niche in the business world?

Tom Young, president and CEO of Young & Co. advertising agency: That could be a problem, yeah. … Basically, you want to identify yourself with one product line – have an identity. When you … become all things to all people, you lose that identity. You’re not known for anything. … Maybe they could do two-step marketing … design the home and then say, ‘We can also help you with furniture.’ So you go out and market yourselves as home designers, but you have this capability of doing furniture. It depends on if there’s a market for each one of those. If there’s a market for furniture, they probably ought to create a separate identity for furniture and market it that way.

Question 8: How important is the deal theworkshop 308 struck with Staxx Apparel to showcase its original furniture pieces inside Meghan Chambers’ South Avenue store? What are the pros and cons of such partnerships?

Wyatt: That’s a great idea. We call that cross-branding. … For this company, I don’t see really much downside because of (Staxx’s) tremendous reputation. It sort of seems logical that people would like both of those kinds of products. … It looks like good, cheap advertising.

Question 9: With a limited startup budget of $20,000, should Mitchell and Mardis be advertising? What about a marketing plan?

Young: The old saying is, if you don’t make a plan for yourself, you will have one made for you by your actions. … They don’t have a lot of money to do a lot of advertising. You could … do some Web marketing with that type of budget. They need to be probably in the phone directories and so forth. However, (if) you start making decisions like that (then) you need to really know who you’re trying to target.

Question 10: You’ve had a business partner, Wayne Morelock, since 1982. What advice would you give Mitchell and Mardis to keep them together?

Ross: No. 1 is that they share the same goal. No. 2, they have to maintain a working relationship that includes communicating with each other and not sweating the small stuff. … Respect each other’s opinion, and respect each other’s position of what you’re trying to accomplish, and work towards it together yet separately, because you have to sometimes divide to conquer.