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The #Takeoff series is about crowdsourcing issues important to Canadian small businesses. They tell us about their defining moments and we write about their stories, the issues, and strategies for success or how to overcome obstacles.
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The timing was perfect. With the grand opening of their Brampton, Ont., tea shop – called T by Daniel – scheduled for the day before Valentine’s Day, Daniel and Renata Lewis expected a steady stream of customers looking for last-minute gifts for a partner or spouse.
But what happened next far exceeded the couple’s expectations. On opening day a year ago, large crowds packed into their store, straining their capacity to serve and exhausting their supply of loose-leaf teas, hot water and paper cups branded with the company’s signature bow-tie graphic.
“People just kept coming in, and they weren’t just local people from Brampton,” says Mr. Lewis, who launched T by Daniel in 2010 as an online retailer of loose-leaf teas. “From door to wall, the store was packed – it was a good problem to have.”
While the aroma of freshly steeped tea must have attracted many customers, it wasn’t the only reason they came, says Mr. Lewis, a former hip-hop artist. The day before the store’s grand opening, a reporter from Global TV interviewed him and his wife. Mr. Lewis revealed in the interview that he had been stabbed in 2009 by people he knew from the music scene in high school.
Instead of getting revenge on his attackers, Mr. Lewis decided to move on with his life. Shortly after the attack, he signed up for a government skills training program, where he got the idea of starting a “cool” tea company.
Mr. Lewis says being featured on TV was the takeoff moment for T by Daniel. The media coverage brought people to the company’s bricks-and-mortar store and increased traffic on its website. Over the following months, T by Daniel sales continued to increase, resulting in a 75-per-cent annual revenue boost in 2014 from the previous year.
“His story resonated with people,” says Sonia Prashar, founder and principal at spPR Inc., a Toronto public relations and communications firm. “That led to them wanting to jump on and support him in his business venture.”
But the company’s moment in the media spotlight clearly created some challenges, says Ms. Prashar. While Mr. Lewis should be commended for his ability to connect with audiences, he and his wife could have been better prepared for the public reaction to the media story, she says. In addition to ensuring they had enough supplies to fill orders, they could have considered lining up additional people to work behind the counter.
The company started as an online retailer of loose-leaf teas in 2010. (J.P. MOCZULSKI FOR THE GLOBE AND MAIL)
“As soon as they learned they were getting media coverage, it would have been good to start planning how they were going to deal with the increased attention and demand the coverage would create,” she says.
Beyond getting adequate resources such as people and products in place, businesses that get media coverage should also have a communications strategy to ensure what they’re saying on air or in print is consistent with their brand, says Ms. Prashar.
For some businesses, knowing what story to tell the media is a big challenge and they often end up spinning an uninteresting narrative, Ms. Prashar says. She recommends that entrepreneurs sit down with their team to brainstorm ideas before they start talking to reporters.
“Look at how your business is relevant to your local community, or if you’re doing something that’s really new and different,” she says. “And don’t be afraid to talk about your life story, especially if it shows an interesting path to how you came to start your business.”
“And don’t forget to keep the dialogue going by engaging with your audience on social media,” she adds. “Have a social media hashtag that you can follow, so if someone says something you can engage back with them and keep the conversation going.”
Robert Tousignant, president of Trybec Management Services Inc., a Montreal supply chain management consulting firm, says there’s no magical solution for ensuring there’s enough product on hand when demand spikes suddenly. The problem is common across all types and size of companies, he notes.
“If you look at beer companies, they run into this challenge during particular times of the year, such as the July 4th weekend,” Mr. Tousignant says. “If the weather is very hot, demand goes up but if it’s very cool people are not buying as much beer.”
But unlike beer companies and other larger operations, small businesses tend to lack enough historical data to help them gear up for demand fluctuations, and most cannot afford to overstock their warehouse in anticipation of a sudden rush on their products, Mr. Tousignant says.
There are, however, actions small business owners can take to prepare for sudden increases in demand while minimizing the risk of building too much inventory. For companies that manufacture products, Mr. Touissignant suggests keeping extra raw material, but not finished goods.
The tea shop ran out of supplies on opening day. A couple of ways to deal with demand fluctuations is to keep on hand extra raw material, but not finished goods, and to line up suppliers who can respond quickly, experts say. (J.P. MOCZULSKI FOR THE GLOBE AND MAIL)
“Wait until the last possible moment to turn the material into finished goods,” he says. “This way you’re building inventory with a lower impact on your bottom line.”
It is also a good idea to line up suppliers who can respond to demand peaks and valleys, Mr. Tousignant says. In some cases, it may make sense to set up supply bases in different regions to ensure there is always a source available somewhere.
“Set up agreements with potential suppliers that can deliver products at short notice,” he says. “This kind of thing happens all the time, where a business is featured in a newspaper article or on TV and that pushes up demand. But it shouldn’t be the only time for a business to think about how to reduce its supply chain risks – you should always have a contingency plan.”
For Mr. Lewis, the entire experience has been a great lesson learned. In hindsight, he could have called on friends and relatives to help out at the store, he says. Instead of relying on kettles to supply the store with enough hot water, he could have rented a couple of large electric urns.
“I should have reacted faster to accommodate the continuous flow of customers and avoid all those hiccups we experienced,” he says. “But now we know, and we’re going to be better prepared next time.”