THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, June 19, 1995 TAG: 9506170249
SECTION: BUSINESS WEEKLY PAGE: 15 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY LON WAGNER, BUSINESS WEEKLY
LENGTH: Long : 149 lines
Five years and $150,000 have passed since Colleen Damweber and Robert and Marise Michalochick had an idea for a new product.
They pooled their money, bought some foam, stitched a flotation vest inside a child's swimming suit, got a patent, found a manufacturer and called the product Buoywear. They've now sold 2,200 Buoywear outfits, and have won preliminary Coast Guard approval for the floatation device.
The path of the fledgling manufacturer in Virginia Beach illustrates the complexities of getting even a small business started.
Though Buoywear's founders now know the product will float - their own kids wear Buoywear in the pool everyday - the same cannot yet be said of their business.
At the rate its going, Buoywear could take another five years to make the transition from a product to a money-making business, says Dennis Ackerman, director of the entrepreneurial center at Old Dominion University who has been advising the company.
With the right help though, the company could be pulling down $1 million in sales by next summer, he says.
Buoywear needs an experienced business manager who can school the company on marketing, sales, finances and strategy, Ackerman says.
Marise Michalochick could handle those tasks after a couple of years of on-the-job training, he says, but the company needs to jump its business to the next level now.
``They have the basics in all those areas, but they don't have the correct management skills to hit the home run ,'' Ackerman says.
``I mean, the product is a great product, and people who buy it, love it, but great products don't jump off the shelf. I see 50 great products a year.''
Marise Michalochick finds Ackerman's assessment harsh but accurate. In fact, Buoywear's founders are looking for a business manager. ``Whenever you can't do something you go out and find someone to fill in the gaps,'' she said.
Until recently, a fulltime manager wasn't a high priority. Instead of managerial skills, they brought the product to market with a combination of stubbornness, perseverance, money and sweat.
``What we tried to do is when we hit a wall, back up, say `OK , what have we done wrong? How can we mitigate it? What's the best direction to go now?' '' Marise Michalochick says.
The Virginia Beach threesome went to a trade show two weeks ago in Florida, for instance, and the show was a flop. Instead of just coming back home, they hit the road and sold the Buoywear they had taken to the show. They ended up with three new accounts.
One of those walls is the reason Damweber and the Michalochicks find themselves sitting at sewing machines stitching foam into swimming suits during every spare hour - even though they should be managing the business.
``We didn't expect to be sitting behind sewing machines five years later,'' says Marise Michalochick. ``We joke about that.''
Perhaps Buoywear's biggest lesson came at the hands of a Georgia company they licensed to manufacture and market the flotation suits. The manufacturer promised to take Buoywear into big department stores, and the folks at Buoywear figured they'd sit back and collect royalties.
When the first suits came back, the Buoywear founders thought the stitching looked shabby. They also quickly found out that Buoywear is not a mass market item easily sold in department stores - it's a specialty item more saleable at pool stores, swimming shops and even boat stores.
``This is something that's needed, but it's not known,'' Robert Michalochick says. ``It's not a pair of Levi's or Dockers - it doesn't ride on its name.''
Chalk it up to inexperience, says Ackerman.
``There are a lot of people who would have understood that the large company was a mass market company,'' Ackerman says. ``This is not a K-Mart item, this is a boutique item.''
Buoywear is now suing the Georgia company for breech of contract.
These days, Buoywear gets the foam flotation devices from a Texas company and the swimsuits from a North Carolina apparel maker - and the partners sew them together with a help of a support brace they rigged to hold the suits.
While working all that out, they are also plodding through the process of getting Coast Guard approval. The actual flotation foam is Coast Guard-approved, but it will likely take four more months before the Coast Guard could give final approval to the whole suit.
If they get Coast Guard approval, a big market could open up for recreational boat users. A Coast Guard law that went into effect this spring requires children under 12 to wear a floatation devices aboard boats shorter than 26 feet.
Nothing in establishing Buoywear has come cheaply. They had to buy $4,000 worth of foam - since it came only in 50-foot-by-5-foot rolls - just to make the prototype to show the Coast Guard.
They got a utility and a design patent, which cost about $8,800. Their trademarks cost $6,000 and legal fees another $25,000.
Because parents put their children's lives in the hands of Buoywear, product liability and corporate insurance runs $12,000 a year.
``You have to be willing to lose just about everything,'' Robert Michalochick says. ``You live, breathe and drink your business. Your savings accounts are down to zero. Your charge cards are maxed out.''
``You walk around with lumps in your stomach,'' Damweber says.
Buoywear is a full-time job only for Marise Michalochick. Her husband works part time in sales for a high-tech dental imaging firm, and Damweber works for the city of Virginia Beach.
As much money as Buoywear's founders have spent, it could have been more. They discovered that by doing some of the legwork themselves they cut the cost of a marketing video from $30,000 to $19,000. All they had to do is arrange for some models.
``We figured how professional could 1- to 6-year-olds be?'' Marise says. ``We took all our neighborhood children and put them in suits. It's not hard to convince kids to go swimming.''
During another photo shoot, things didn't go quite as well. The Michalochicks got their daughter Kayla to pose in the water for a brochure. They joke that they had only one picture to choose from - the one out of 300 in which she wasn't crying.
With all the work they've put in, the Michalochicks and Damweber may find Ackerman's suggestion for what it takes to make it to the next level the toughest thing they've tried yet.
They have to bring in outsiders and let them help manage the company, Ackerman says.
``The classic tension in most of my clients is their products become like babies to them and they have trouble letting go, wanting to keep control,'' he says. ``Many times for a company to grow you have to let go of a piece.''
With the right management team, Ackerman said Buoywear could have $1 million in sales by next year and $25 million in five years. The stubbornness of Buoywear's founders has cost them some time - ``they've learned everything the hard way,'' Ackerman said - but it has also kept the company alive.
``People who are crazy enough to start a business are poor at listening and very stubborn,'' Ackerman says. ``At the same time, that stubbornness and persistence is what leads some to get anyplace.
``The greatest ones are the ones who are stubborn, but are also willing to listen.''
Over the next couple of years, Buoywear's founders will find out whether they created a solid business or, like hundreds of other people, just had a good idea. ILLUSTRATION: Color staff photos by Jim Walker
Buoywear founders Robert and Marise Michalochick and Colleen
Damweber.[color cover photo]
Because customers put their children in Buoywear, the company pays
$12,000 a year in product liability and corporate insurance.
Colleen Damweber puts the finishing touches on one of the patented
flotations suits. She and Robert and Marise Michalochick founded the
company five years ago and have invested $150,000 in its future.
Buoywear's founders discovered that doing some of the legwork
themselves they could cut costs. They used the Michalochick's
children and neighbors' children as models for brochures and other
promotional material.
by CNB