Can a dream of starting a furniture company turn into an amazing American entrepreneurial success story?
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Lauren Russell is living proof that dreams can come true.
She was kind enough to participate in one of our entrepreneur interviews, and she shares some great advice for those of you who are just getting started.
Lauren, why don't you start by introducing yourself and telling us about your company?
My name is Lauren Russell. I'm the founder and Creative Director of Russell & Mackenna furniture.
In 2003, my husband, Kevin, and I took the plunge into business ownership, kissed our jobs good-bye, and set out in pursuit of the American Dream.
We started a business to design, build and sell our own line of colorful cottage style furniture. A mere four months after we launched, one of our pieces was featured in Coastal Living magazine. The phone began ringing off the hook with orders.
We knew we needed help managing the growth, so we asked Larry Strassner, my happily retired father to help us with the company. With his Dad's many years of business experience, which included running a publicly held company, we now had the strong management and leadership skills to help make this little furniture company an American success story.
Russell & Mackenna now ships furniture from a 6,000 square foot production facility in Jessup, MD all over the country including regular deliveries to the Hamptons, Martha's Vineyard, Kiawah Island and Palm Beach
Where is your business located?
Our manufacturing facility and corporate offices are in Jessup Maryland. Our flagship store is about 20 minutes away in Severna Park, Maryland, just north of Annapolis.
When did you start the business?
In earnest, I would say the company started when we attended our first trade show…the Atlanta Gift Show, in January of 2004.
All we could afford was a tiny 10 x 10 foot space – keep in mind we were selling big pieces of furniture! We had pieces crammed in every square inch and stacked on top of each other. We actually had to stand in the aisles, which was very frowned upon by the management company. But, our sense of humor and intense passion carried us through -- we had a great time and laughed a lot.
What were you doing before this, and is this your first business?
Prior to founding Russell & Mackenna, Kevin worked for T. Rowe Price in Baltimore as an investment counselor and was on staff at The Severn School in Maryland.
I have been a graphic and interactive web design artist since graduating from college in 1994 and was an Art Director at an advertising agency for several years before going it solo as a Marketing Consultant specializing in promoting consumer products.
Where did you get the startup money?
Our first large order and the deposit check for $18,000 that came with it served as the initial seed money. From there we leveraged the equity in our home for a $115,000 line of credit with BB&T bank that carried us into our second year.
Sales growth has averaged over 100% year after year. Funding our growth has been an ongoing challenge. In 2007 we sold about 15% of our common stock in an offering to family and friends. We are encouraged by the fact that our growth continues to accelerate in the face of the current economic downturn. Our financial advisor is currently preparing to seek a private placement on the order of $1.5 million for our company.
Who are your main competitors? How do you compete against them?
There are a handful of companies domestically producing high end colorful cottage furniture on the coast of Maine and in South Carolina's low country. We keep our eye on what they, do but more importantly what they don't do. I think it is important to clearly identify the weaknesses of your competition and make them your strengths.
That's great advice. So, how has your experience in running the business been different from what you expected?
It's been more rewarding than we ever expected. When we signed on we knew we would be making lots of sacrifices in order to build something from nothing. The sacrifices are huge, no surprise there. Fortunately, however, the payoff happens a little bit each day. It comes in the form of accomplishments every week as we watch our little grass roots company turn into a national brand.
Is there anything you wish you had done differently?
Not a thing. I admit that when I reflect on some of the mistakes we made I cringe, but I wouldn't change them for anything. It was the agony of making mistakes that taught us how to do it better the next time. We've made a lot of mistakes and often joke internally that we have mastered the art of making lemonade from lemons!
So what have you done that has been very effective in helping to grow the business?
The best thing we ever did was to realize the importance of Public Relations early on. One of our first hires was a Director of Public Relations. She was able to achieve a PR audit of close to $500K before we reached $250K in sales!
Her efforts had a large impact on revenue and brand awareness. Aside from Coastal Living, we've had editorial coverage in O at Home, House Beautiful, Better Homes & Gardens and The Washington Post among others.
What advice would you give to somebody else who wanted to start a similar business?
Find out what your good at and become the BEST at it. Building a brand that appeals to a very specific niche market has been a successful strategy for us.
It is so easy to lose focus early on when opportunities start popping up everywhere. If you do not have a business plan that you whole-heartedly live by, you will not be able to maintain focus. We have constantly been tempted to broaden our market with diversifying our product line, but that's a short term cash strategy that we feel strongly will sink your brand in the long run.
We rework our business plan every 6 months. So my advice is to determine your niche and maintain laser precision focus.
It's so important to treat your business plan as a living document and revisit it. That's good advice for all new entrepreneurs. Lauren, thanks so much for sharing your entrepreneurial experience with us, and good luck in growing your furniture business.