Challenges, problems, and triumphs
-- from a manufacturer's perspective.
"How and Why We Changed Our Business"
Sometimes necessity forces gutsy businesses
into new, scary areas.
by Jim and Linda Connors, Calico Crossroads (September
(Note: Recently CLN reported about a dairy farmer
who fell on hard times and switched to raising ... goats. It was
published as a reminder of how a business owner sometimes has to
make very difficult decisions and changes in order to survive. That
started an exchange of emails with Jim and Linda, whose Calico
Crossroads is a well known, well respected producer of
counted-thread leaflets and chart packs. They are expanding their
company into a major, completely different area.)
We remember the first time we attended the Charlotte Needle Arts
show back in 1997. The excitement was like electricity in the air
and when the doors opened on the first day, the crowds literally
burst through with people dashing off to be the first in line at
their favorite designer¹s booth.
How things have changed over time! By summer 2001, the writing
was on the wall; it was obvious that the heady days of cross-stitch
had come and gone as we watched as a mere handful of buyers trickled
into a much smaller exhibit hall. The excitement had finally moved
on and it was clear that if Calico Crossroads was to stay in
business, we could no longer look to cross stitch as our primary
means of revenue. That summer, the search for an alternative
resource began in earnest.
After much thought and market research, we finally settled on
consumer machine embroidery design and purchased our first machine
and software that December. Thus began a journey lasting nearly four
years from inception to our first sale.
Why machine embroidery? Several reasons. It leveraged our
existing skill sets: Jim is network systems sales and marketing
manager/engineer and Linda is a skilled computer graphic artist and
desk top publisher. Our "Kats by Kelly" designs
could be easily transported over to machine embroidery (or at least
we thought so at the time – more on this later).
The technical and financial barriers to entry were especially
steep, greatly limiting market entry to professionals with the
skills and deep pockets. Our digitizing software alone cost nearly
$20,000. And, unlike in the more restrictive cross stitch market, we
could establish dual consumer/wholesale sales channels that would
allow us to promote our products and generate an immediate revenue
stream while at the same time supporting our retailers and driving
business to them without fearing the usual boycotts and
blacklistings so common in the cross stitch industry.
The challenges we faced were many and at times appeared
insurmountable. The biggest was how to maintain our cross-stitch
revenue stream to support our machine embroidery development.
Calico Crossroads basically has 1.25 employees. Linda does
all the designing and runs the day-to-day operations while Jim helps
out evenings and weekends when needed with technical issues,
marketing, photography, and various other tasks.
Running the business was a full-time job for Linda and any moves
into machine embroidery would, out of necessity, come at the expense
of cross stitch. This was especially scary, as revenues would
inevitably decline as we learned machine embroidery in an already
declining cross stitch market. This was something that we had to
accept and plan for. The trick was for the fall-off to coincide with
the increase. Talk about a delicate balancing act! Even the
slightest miscalculation could quickly put us out of business.
The learning curve was especially steep. Actually there were two
major curves: learning the machine and learning how to digitize
using the software. Learning the machine was the easy part; learning
to digitize properly was even more of a challenge. As one could
imagine, professional software packages such as Wilcom are
especially difficult and time consuming to master correctly.
Fortunately, there are many training classes offered nationwide;
they just require considerable time, money, and commitment. Creating
the updated website, www.calicocrossroads.com,
incorporating machine embroidery with downloadable files, mastering
and manufacturing CDs, and a host of other related learning
experiences proved very educational as well.
Three years and eight months after committing to machine
embroidery and buying our first embroidery machine, we stand ready
to enter a fresh and very challenging marketplace. Our new website
is up and running, marketing efforts have commenced, and we have
just made our very first machine embroidery sale.
At this point, we are optimistic that we have made the right
decisions, have a professional product, and will be able to recoup
our considerable investments in this new business – but only time
will tell. Our first digitized offerings are some of our "Kats
by Kelly" designs, but watch for other original designs to
Cross stitch may be in a slump and all good things must come to
pass, but history always seems to repeat itself, so don't look for
us to abandon cross stitch anytime soon.
(Note: Visit www.calicocrossroads.com
to see the results of Jim and Linda's efforts. Have you made a major
change in your business? Share your story with CLN readers.
To read previous "Vinny" columns, click on the titles in
the right-hand column.)