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Challenges, problems, and triumphs -- from a manufacturer's perspective.

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"How and Why We Changed Our Business"

Sometimes necessity forces gutsy businesses into new, scary areas.

by Jim and Linda Connors, Calico Crossroads (September 19, 2005)

(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 come soon.

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. Email mike@clnonline.com. To read previous "Vinny" columns, click on the titles in the right-hand column.)

xxx

 

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