“…the key has been being opportunistic and finding ways to help our customers, our channel customers as well as the end consumers, the users of our products.”

Interview by Mike Sullivan


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Mike:
Hi, I’m Mike Sullivan. Thanks for joining us again today on MO.com, where we feature small business owners and entrepreneurs, and then bring you hints, tips, insights, and perspectives on what it takes to be successful. Joining us today is Steve Greenspon of Honey-Can-Do. Steve founded Honey-Can-Do back in 2008, and they are now a leading provider of home storage, organization, and laundry care products. They sell both their own brand and private label in stores such as Target, Bed Bath & Beyond, Menards, and other leading retailers.

Steve, thanks for joining us. Can you tell us a little bit more about Honey-Can-Do, and what it is you actually provide and sell?

Steve:
Honey-Can-Do is a provider of home storage and organization products, as well as garment care products. We sell things like shoe racks, laundry hampers, laundry sorters, coat hangers, wardrobes and related items, and we sell them through retailers and distributors, ecommerce websites, and catalogs. Primarily we provide products to North and South America, although we also have products throughout the world. I believe it’s about 30 countries throughout the world.

Mike:
Thanks for that explanation. Can you tell me about your history, what steps kind of led you to where you are today, serving the industry that Honey-Can-Do serves today?

Steve:
I did my undergrad at Northwestern University. I have my MBA from Kellogg. Before this company, I was with a bath and plumbing related company, which sold products primarily through home centers and hardware stores. I sold out my share of that company in 2006 and knew that I wanted to stay in consumer products. I like the people in the industry. I like serving retailers. I like being involved in handling new products and providing fun and unique things for consumers. So I just kind of walked the aisles at some local retailers, and thought this would be a fun category. It’s something easy for me to understand. I know how to work a closet. I know how to work laundry related things. It’s not biomedical devices or technology or complicated things like that. I enjoy the product category a great deal, so I thought it would be fun.

Mike:
Tell me about how you went about funding or procuring any capital needs for launching the business.

Steve:
The company, in terms of capital, is 100% self-funded and self-guaranteed. We have a very strong relationship with our bank, and they’ve been very, very supportive. We work with JPMorgan Chase, their Chicago branch here. It’s been a very strong relationship. We’re intertwined with them a number of different ways, in terms of our payroll service and our credit card processing and our lines of credit. Basically, they’ve been very supportive. They believe in the company, they believe in the management that we have here, and have been a great partner throughout the process.

Mike:
I mentioned in the intro some of the large national chains that you’re providing your products to, such as K-Mart, Amazon, Bed Bath & Beyond. How does one go about landing those types of retailers and being able to provide products to them? It seems like that’s a pretty big step.

Steve:
It’s all a matter of being able to service them and being able to provide them the confidence that you can service them. It’s much different to call on a large, national mass retailer and be able to serve them than it would be a local, independent retailer. They have a lot of specific needs that you need to address, pricing being among them, but it’s certainly not a primary one. It’s capacity. You have to show them that you’re not going to run out of inventory, that you’re going to be able to ship on time consistently, that you’re going to able to ship the same product and the same high quality consistently. Technologically, you’re going to need to support them in terms of managing their inventory or accepting and confirming orders. You have to be able to meet their needs for quality control at the factories, as well as for social compliance, as well, meaning the sustainability, not having child labor involved in your factories, being able to show them that you’re accounting for overtime, and meeting certain standards for social compliance. It’s a huge investment, but you need to do it to even realistically call on and serve a large retailer like that.

Mike:
So for other small business owners out there, who are thinking right now, hey, I’d love to get my product in a Target or I’d love to get my product in a K-Mart, how do you prepare to go in for that conversation or to call on one of these major chains to see if they will accept your product and stock it on their shelves?

Steve:
Well, before you even call on the stores, you’ve got to make sure that you know which stores to call on. Who is your product meant for? Where do the people that would be most interested in your product shop? So once you know that, you’ll know who to call on. From there, you would need to give a compelling reason for a large retailer to hold your product. What do you project the potential sales would be and profit? Why do you think that it would be successful in their stores?

These stores have a limited amount of space and need to have a certain return for every linear foot within their space. What’s the opportunity cost if they take out an existing product and put yours in? You need to show the merchant why your product would be better than something that they currently have in the stores there. From that, you need to learn as much as you can about the retailers and what’s important to them. There are some very basic things, like showing that you can produce the product consistently with the same quality, being able to meet their capacity needs, being able to ship on time and complete. It’s just instilling that confidence and then being able to execute once you have the order.

Mike:
As an entrepreneur, what would you say has been your most challenging moment?

Steve:
I have my most challenging moment every single day, I think. We have a tremendous, tremendous team here, and building the team and building the management team, everybody from the person that drives the forklift to our head of supply chain and head of operations. Just being able to communicate as a team and build the team. It’s consistently going to be a process in motion to do that. With the right people, there’s nothing we can’t do, and that makes a lot of the other challenges that we have seem a little bit easier to handle.

Mike:
Honey-Can-Do has been in business now for a few years. How would you, looking back, describe that experience and where you’re at today?

Steve:
It’s been a lot of work, a lot of very late nights, a lot of traveling, a lot of early mornings, as well. Through it all, of course, family is the highest priority, and I’ve always gotten home by a certain time and been able to play with my son, spend time with my wife throughout it. But basically, it’s spending the day at work, going home, spending some family time, and then once my son is in bed, I get back to work on things. It seems a never-ending process to look for opportunities. Basically, the key has been being opportunistic and finding ways to help our customers, our channel customers as well as the end consumers, the users of our products. Finding products, finding price points, finding ways to reach out to them, and serving their needs. That’s allowed us to grow. We are consistently trying to grow with existing customers. We are consistently trying to reach out to new customers as well, but the biggest thing is we need to have products which meet a need, at a price point which is appealing, with consistent quality which is appealing, and being able to communicate that.

Mike:
All right, fantastic. What does the future hold for Honey-Can-Do?

Steve:
We’re coming out with a lot of new products. We come out with about 100 unique products throughout the year, every single year. We’ll get into a number of new categories. We want to basically provide a whole home solution for consumers. We’re getting more and more into kitchen storage and organization products, bathroom storage and organization, possibly garage storage and organization, being able to be a full line and being able to meet their needs. We want to always be consistent with our product quality and our customer service, and try to find a way to build that loyalty among consumers. That way when they’re looking for products for their home, they’ll think of and consider Honey-Can-Do for those needs. We want to maintain what we’re doing. We’ve got a great staff here. We certainly want to do our best to maintain the same staff and grow our staff, and provide opportunities for the people here. Then most of all, we want to have fun. That’s been a great part of growing the company. We have had some challenges, but we have a lot more good days than bad days, and we just try to have fun while we’re doing it.

Mike:
Steve, thanks so much for your time, and we’ll all keep an eye out for the Honey-Can-Do products in our local stores. Thank you.

Steve:
Okay, I really appreciate it.