The bigger, the better: if you need quick cash flow to stay in business—and who doesn't?—Skip the small retailers and go straight for companies that buy in bulk

Entrepreneur, Oct, 2002 by Don Debelak

LET'S SAY YOU DESIGN A NEW CLOTH-ing product. The conventional approach taken by many underfinanced inventors is to start by selling to small, local customers. The goal is to slowly and steadily build a market for their products. Problem is, this approach isn't likely to generate the kind of revenue your business needs to survive.

Here's a better approach: Go after the biggest customers you can find. After all, it often requires the same amount of work to land a small sale as it does a big one. And the benefit is, when you do finally make a sale, it will generate revenue to grow your business. This was the approach taken by 33-year-old Sharon Thomas-Ray when she launched her Chicago business, Y-Tie Neckwear.

Slow Going

Thomas-Ray's idea originated in 1995 when she took a marketing class at National Lewis University in Chicago. One of the assignments was to develop a product and create an introduction plan. While working at a fashion show, she noticed how long it took models to tie their ties to the right length. Thomas-Ray decided that an adjustable tie with a zipper would solve the problem, as well as make a good project for her class. Once the school assignment was completed, she practically had her business in place. "Lots of people told me they liked how easy it was to adjust the Y-Tie, so I decided to try to introduce it," says Thomas-Ray. In 1998, she got a patent on her invention and was ready to go.

Thomas-Ray's first efforts were spent targeting the local Chicago retail market. She made some sales, but progress was slow. Then she got her big break Publicity in the Chicago Sun Times and on the WGN Morning News led to an $8,000 purchase from The Salvation Army. Landing that deal gave Thomas-Ray the idea that maybe she was wasting her time chasing after small retail orders when she could be pursuing bigger ones.

Branching Out

Thomas-Ray decided to approach the Chicago Police Department and the local Pace Bus Service in an effort to learn more about how the uniform market worked. She discovered an entire network of uniform shops existed nationwide. "In Chicago, the important store serving the market was Kale Uniforms, which is a part of the Flying Cross by Fechheimer, a major uniform distributor," says Thomas-Ray With the help of Kale Uniforms, Thomas-Ray added the Chicago Transit Authority and the Chicago-Area Suburban (Pace Bus Service) to her list of customers in 1999 and 2000.

Thomas-Ray also discovered the restaurant uniform market through Chef Direct, a Chicago-area restaurant distributor. Attending the 2000 and 2001 National Restaurant Association Shows led to business with chains such as Pizzeria Uno. Thomas-Ray also exhibited at the National Association of Uniform Manufacturers and Distributors, where she signed on 15 independent sales agents.

And the business continues to add customers as major distributor Fech-heimer added the Y-Tie to its catalog for the first time this year. "Being in the catalog gives buyers nationwide a chance to see and stock the Y-Tie," Thomas-Ray says.

Retailing for $12.95 (polyester) and $24.95 (silk), the ties are also sold on the company's Web site (www.ytie.com) and advertised in Made to Measure, a uniform trade magazine. The ads have led Thomas-Ray into yet another new market: "I've been getting orders from tuxedo shops, which is why I introduced the silk tie."

Soon Thomas-Ray was seeing potential markets everywhere. She wondered: What about the military or even the Post Office? Landing even one branch of the military would be a major coup, but Thomas-Ray didn't know how to go about it. Then she attended a fund-raiser for her congressman, Jesse Jackson Jr.

"I took a Y-Tie necktie to give to him," Thomas-Ray says. "He thought it was a great idea, and he started to arrange meetings with the appropriate purchasing people. I met with Army, Air Force, Marines and Navy people, and I was flying out to Washington about every other week in the summer of 2001." Unfortunately, 9/11 interrupted that activity, but Thomas-Ray has been able to reconnect with her contacts and hopes to land some government business in 2003.

Steps to Success

Don't be intimidated. Big buyers are often easier to deal with than smaller customers with limited budgets. Read industry trade magazines for stories on big buyers in your market. You can find lists of trade magazines at the library in the Gale Directory of Publications and Broadcast Media (Gale Publishing). Check the magazines for listings of contacts in your area. They can recommend trade shows for you to attend.

Don't be afraid to use sales agents, other manufacturers, contacts at association meetings or even your local congressperson to get your foot in the door. And follow up many times. It's not unusual to make seven to 10 calls before landing a big account.

Thomas-Ray projects 2002 sales of $750,000, and there's no telling just how big Y-Tie Neckware will become now that the company has a nationwide sales network and contacts at big institutional customers. Thomas-Ray's strategies can work for any inventor: Find out who your major customers might be, and chase them first. Not only will it give you a jump-start in sales, but you'll also get the cash flow you need to grow your business.