London-based A Couple of Squares is tasting sweet success by selling gingerbread cookies throughout North America to corporate clients, Hollywood celebrities and coffee drinkers.
In 1997, Mary Bradshaw and Bernadette Erb saw an opening in the market for a better product.
"We were trying to be different from the companies that were already out there - and other companies didn't have lots of visibility," says Bradshaw, the company's operations director.
What set them apart is fresh ingredients: Real butter and real eggs rather than canola oil and frozen egg yolks, notes Erb, director of sales and marketing.
|Peter Tiahur, Business Edge|
|Co-owners Bernadette Erb, left, and Mary Bradshaw, right, display their "summer bear" cookies with A Couple of Squares managerial team Luisa Rodriguez, Lisa Butterworth, Rachel Bradshaw and Dana Hansen, back row left to right.|
The duo met as co-workers: Bradshaw was general manager at Sebastians, a self-serve restaurant in London, and Erb was her assistant manager.
Although they had little business experience, "passion drove us forward," Erb says and they decided to set up shop.
They found a space "which happened to be a ready-to-go bakery that was closed," says Erb.
With that space and $500 in their pocket, "we thought we had nothing to lose," she adds.
The initial product line included squares, brownies and cookies, but business began to improve in 2000 when they started focusing solely on spiced gingerbread cookies, Bradshaw says.
"After Christmas when things were slowing down, we thought we needed another product," says Bradshaw. "In previous years, I did a bear with a scarf that went over well for Sebastians."
So a gingerbread cookie was introduced, to which colourful icing decorations were later added. Shortly after, the company dropped the brownies and squares.
Today, the popular spiced gingerbread cookie with icing takes a variety of forms. There have been cookies shaped like a woman's makeup kit complete with lipstick and rouge for corporate clients such as Estée Lauder, and cookies decorated like a book cover for McGraw Hill publishing.
Retail customers can also purchase individual cookies such as bears or monkeys.
That same year, the company came close to doubling its sales from the previous year, and operations moved from a 2,000-sq.-ft. space to one almost twice as large. Individual cookies range from $2.20 up to $9, while a giftbox set is about $16.
Erb says things really picked up, however, when she began an active marketing program. "I was driving around and knocking on people's doors in Toronto and Kitchener at specialty food shops, bakeries and many food stores."
Some of those companies, which are now clients, included Second Cup and Laura Secord, to whom they send out several thousand cookies a month. Clients in the United States make up about 25 per cent of business, Erb says.
Media attention also helped. In 2001, London City Life magazine ran a feature story, which gave them something to show potential customers, Erb says.
The same year, A Couple of Squares won best new food product and best packaging and food design from the Canadian Association of Specialty Foods.
Success, however, was not without its share of trial and errors, the duo says.
At the beginning, employees put in long hours, sometimes overnight, to fill orders during the busiest times at Christmas, Valentine's Day and Easter, Bradshaw says. (The company employs 30 people on a full-time basis, but during busy seasonal periods, staff numbers double to 60 or more workers).
"We can manage our time more efficiently," she says. "We try to make sure everyone's workday is 9 to 5:30, with weekends off," she says. "That's our goal, even at Christmas."
Another learning curve was standardized inventory, the women say.
"You want to standardize things - ribbons, boxes and labels - without losing that creative aspect where everything is individual," Bradshaw says. "Once we say we like this or that, we take it and tweak it so that it fits in a bag size and we can keep the number of ribbons and boxes down."
The two women also say cashflow was a tricky problem early on. "If we take a 90,000 order, you don't get paid for it (upfront)," Bradshaw says. "Then someone else wants 47,000 cookies. It's hard when we're doing this organically and alone."
Cashflow problems are not unusual, however, and are the single most common reason small businesses fail.
"During early explosive growth, a company has no assets in the bank and this is when they are most vulnerable, particularly for seasonal companies," says Stewart Thornhill, assistant professor of strategic management and entrepreneurship at the Richard Ivey School of Business at the University of Western Ontario.
Thornhill says about half of small businesses die before the five-year mark and only 20 per cent are alive after 10 years.
But not only has A Couple of Squares survived, it has made its mark in Hollywood, where actor Halle Berry bought a cookie at Kitson, a Los Angeles store. That led to an article in the London Free Press and even more publicity, Erb says.
That kind of marketing comes down to pure luck, Thornhill says. "If a product gets in the right hands of the right people, then it can spread. Martha Stewart starting profiling Lee Valley Tools and all of a sudden the sales went nuts. It only takes a couple of influential players."
The biggest market, making up about 50 per cent of sales, is corporate clients, Erb says. "An individual will call after receiving a logo cookie at a shower, tradeshow or event and inquire about purchasing cookies for their own company and/or event."
Eventually the two partners hope to sell off business, perhaps to a manager, since they say staff is one of the biggest reasons for their success.
"They all really care about their work - from making the dough to coming in early during busy hours if we need them," Bradshaw says. "We wouldn't be here without them."
(Melanie Chambers can be reached at email@example.com)