Plowing profits back into the business - profile of Innovative Concepts - Secrets of Success

Home Office Computing, Sept, 1991 by Michael D. Espindle

Plowing Profits Back Into the Business

When college student Daryn Ross was offered a job selling T-shirts for a local sporting goods store, he almost took it. But then he concluded that he could do better selling his own T-shirts. So he started Innovative Concepts, a custom ad-specialty and imprinting supplier that sells T-shirts, mugs, and other items to fraternities, sororities, and professional organizations.

"I knew that every organization at my college was a potential client, and, believe me, I contacted them all," says the 25-year-old entrepreneur, who built the business in his dorm room at Missouri's William Jewell College.

He lined up his own sportswear wholesaler and soon discovered that William Jewell's fraternities and sororities were his best customers. Soon, he was supplying nearly every social organization on campus with customerized party favors and other items.

"In the past four years, Innovative Concepts has grown from a small company selling to about 10 organizations to a chief competitor in this business, working with 150 different organizations and businesses across the country," says Ross. "My gross sales have doubled every year." Innovative Concepts' annual gross sales are now around $350,000, and Ross predicts that sales for the coming year will near $1 million.

PUTTING PROFITS TO WORK

Ross has used the classic bootstrap method of starting a business - that is, letting business revenues fuel future growth. "I attribute my success to hard work and to the fact that all profits of the company are used to finance expansion efforts. I've never had to take a loan; the company is completely self-financed. This debt-free growth has been crucial to Inn-Con's success."

This methodical expansion strategy has paid off for Ross in a relatively short time. In 1990, just three years after he started the business, he was able to launch an aggressive direct-mail campaign with a 28-page full-color catalog (Favors Plus) that was mailed out to about 8,000 people. The catalog offered everything from sportswear to beach thongs, all custom imprinted, and party favors to support almost any theme imaginable.

"In the year or so since I published that catalog, my business has just about tripled in size," he says. "It proved to be a very smart business move."

The increase in business prompted Ross to hire a full-time office manager to handle customer service, production scheduling, and accounting, as well as a part-time sales rep who travels to colleges and sells specialty items to campus stores and groups.

The success of that campaign has also helped Ross and his parents purchase their own imprinting and print-production equipment. His parents work as subcontractors, handling Inn-Con's production orders. This unique arrangement allows Ross to control the production of the merchandise he offers in-house (or in this case, "in-barn," since the equipment is kept at his parents' farm). Ross says he can better service his clientele this way.

"Now, I control the quality and the turnaround time of my products, which gives me a distinct edge over my competition," he claims. "Most of the national companies deliver in three or four weeks. Because I control the physical plant, I can deliver merchandise in less than two. It's a real advantage. And, I've eliminated the middleman, so my profits are growing as well."

MAC-BASED PRINTING

The manufacture of custom-imprinted clothing and party favors to a large marketplace engenders a great deal of production scheduling, design work, and billing. According to Ross, his arsenal of office equipment not only makes those time-consuming tasks possible but also frees up his day to focus on sales. He handles purchasing and billing and contact database chores with Dac Easy and PFS:File, respectively, on a Tandy 1000 SX computer. He uses a Ricoh fax machine daily to review and approve art proofs for products that are still in production. Ross travels with a Tandy 1400 LT laptop, and his Pontiac Trans Am sports a Uniden cellular phone.

"Last January we bought a Macintosh IIci-based graphics workstation (with Linographics software) for the printing end of the business, and I'm now shopping around to turn the whole company into a Mac shop," he says.

EYEING NEW MARKETS

Innovative Concepts' plans for the coming year mirror the same kind of sturdy expansion Ross has employed throughout the life of his business. Ross anticipates expansion of his printing facilities, as well as updating and reissuing his college catalog. Another catalog targeted at elementary and high school is in the works.

"I don't point to money as a symbol of business success," he says. "I'm in it for the opportunity to start and grow a business that is mine. Looking back at how the company has changed and grown and prospered - that's what gives me the most pleasure."

PHOTO : Innovative Concepts' custom-printed products struck a chord with fraternity and sorority houses. Now the company wants to develop new products for elementary and high schools.