“The title of David's book, "Blueprint to a Billion" could be daunting to small business owners, many of whom are striving to make their first million. But David's makeover session with Priscilla and Joey Sanchez, the owners of Caboots, really demonstrated how useful his ideas are for entrepreneurs at every stage. He helped the Sanchezes cultivate a business model, then walked them through the steps of applying his seven essentials to the various parts of their company. Aftewards, they couldn't stop praising his ideas--and they couldn't wait to use them to grow their business.
David's advice helped make the Caboots makeover one of FSB's best to date.
-- Mina Kimes,
Fortune Small Business Magazine
Priscilla and Joey started to describe their situation. As we walked into the small show room, I couldn't help but notice tons of pictures on the wall that customers had taken of their boots. This reminded me of the Crocs website -- were these their Marquee Customers who loved their boots so much that they told other customers and took pictures to send out? As we walked through the building Joey and Priscilla started telling stories of Ned Bennet the CEO of Options Express, Riders of the Sky stopping in last week and Larry Winget of A&E who are their Marquee Customers. Gerald Nelson, the Assistant to the Chief of Police for New York City owns 20 pairs of their boots. Gil Lederman, an Oncologist, gets the record for 49 pairs!!! I don't have that many shoes!
During our factory tour, I saw that the benefit of this brand isn't just the comfort or style of the boot but the care of the owners and the small team who hand assemble these boots. Arturo was cutting out leather for a custom pattern, Javier was hand painting the boots and Luis was hand sanding the soles. All made in America with pride. This is why these boots are more comfortable to wear.
Then we went to the back and I saw the pairs of the boots that Joey and Priscilla make for "The Pirates of the Caribbean" movie. Need a pair…only $400! Next to these Joey showed us those famous Star Wars white boots. Seems there is a huge following in costume boots. Finally, I saw a rack of engineered boots for motorcycle enthusiasts and State Troopers.
Back in the showroom, we settled down to talk. They described they wanted to grow. "How big?" I asked. "Well, from $2M, we would be thrilled to grow to be multiple times our size someday," Joey and Priscilla shared. So we now quantified their aspiration. The question in my mind was if I could lay out a roadmap to help them grow Champion Boots to the next level, what is the next level and how many next levels would it take?
They felt they needed investment to grow and wanted to add employees. How much did they need?
I asked them which company is the role model for their business. Joey said, "Taco Bell" and Priscilla said, "Sundance". Why? Joey is focused on the production process to scale and Priscilla relates to the higher order benefits – the lifestyle – of their boots. Both are right. This hinted that one is inside focused and one could be outside focused but are they managing to maximize their effectiveness?
As they described what they do so well, it appeared they were describing three lines of business: Custom Boots, Costume Boots and Engineered Boots. I drew out a chart that looked like a business structure and an organization chart. I asked, "What is your revenue, profit and where are your growth opportunities?" What a discussion! To simply summarize, while Joey and Priscilla had been doing this implicitly, an explicit discussion of managing their business explicitly had huge impacts on how they would grow. The analogy for this business was the three lines of business Microsoft defined in its early days when they broke their business into Tools, Operating Systems, and Microsoft Office.
What we found was a simple picture. If Joey and Priscilla could be the Inside-Outside Pair to manage three discrete lines of business, we could redefine Caboots so investors, employees and customers could better relate to each segment. We defined a goal to take their business to the next level: "Double each line of business from $.5M to a million. This would get the business to $3M." From here, double and double again and we are on the way to achieving exponential growth.
First short term action: Clarify what are your lines of business- with a focus on product and market. Your goal is to become the virtual general managers each of the lines of business that we defined today and to lead them to a million in revenue: custom boots, and costume boots and engineered or utility boots. Therefore, you need a simple strategy, business plan, financials and actions against the 7 Essentials for each line of business.
The second short term action: Figure out the financials for each line of business and develop a 3-6-9 month forecast for each business.