A market for fine tastes: the bespoke business success
Entrepreneurs Shane Hills from Koko Black chocolaterie and Margot Spalding from Jimmy Possum furniture both started other businesses before they found heights of success.
They spoke to our Ballarat and Geelong Small Business Coach event audiences about how they navigated some serious challenges to grow their now-highly-successful businesses.
Shane Hills’ sugar hit: the success of chocolaterie Koko Black
The allure of chocolate was far too great for Koko Black founder Shane Hills to listen to wary friends and family who thought starting a business was risky.
“I love the personality and identity of what chocolate is.”
A former investment banker, Shane Hills had already bought boutique confectionery store, Suga, before exploring the chocolate market.
He thought about the experience consumers had with chocolate.
“I loved chocolate, but then I looked around Melbourne at how it was being delivered, and to me was all the same,” Shane said.
“You’d walk into the store, grab a box off the shelf and pay for it at the counter, and that was all the experience was.
“I really started to think about how I would bring that to life in a physical way and think I was passionate about was the product, but it was also about designing the environment and creating something around the product.”
In 2001, Shane began developing his business model (for what has become Koko Black).
But a trip to Germany and Belgium made him realise he didn’t have enough knowledge about making chocolate.
After discussions with many people in Germany and Belgium he crossed paths with chocolatier Dries Cnockaert.
Dries agreed to help Shane launch his business in Melbourne’s Royal Arcade.
Shane still believes the combination of a high quality product and a sensory experience is what makes Koko Black successful.
He described the business’ growth as “gradual” until a huge spike in 2014.
“Last year I felt we were too comfortable. We had been opening one store per year and last year we did six and that increased our production by 50 per cent and we added 120 staff,” Shane said.
“It’s been a crazy, demanding year.”
Though he believed adding staff and new stores weren’t necessarily the only indicators of growth.
“It’s about doing whatever makes us stronger as a business.”
Shane believed a positive attitude, which was instilled throughout the leadership team at Koko Black, helped the company and team deal better with challenges.
Shane said a leadership course he took some years ago took him valuable lessons about “finding your dare in life” to seize opportunities, and then recognise and use your support network of people to keep you grounded.
He said he was grateful for a mentorship with Autobarn founder Amos Bush he earned through a City of Melbourne grant.
He admired Amos’ ability to open 100 Autobarn stores before retiring and described him as “the dearest, supportive friend.”
Shane said one of the lessons he’d learned in business was “it’s not all you. Seek as much help as you can.”
How Jimmy Possum founder Margot Spalding carved a market for custom furniture
Jimmy Possum co-owner Margot Spalding credited the 1995 furniture exhibition Furnitex for putting her furniture manufacturing business in the spotlight.
“We went to this show and I sold enough furniture to keep the boys working for 10 months and I promised it in 10 – 12 weeks,” Margot said.
She laughed recalling her husband Alan saying each day of the four-day trade show they should go home because Margot kept selling more furniture than he could make.
But she was determined to sell to as many customers as possible using the four days of the exhibition, to kick start the customer base.
Margot and Alan quickly brought on new staff, got a new factory shed and bought more tools so they could meet the demand.
But before that, the business ran on a slim budget and a lot of hard work.
They could barely afford to buy a shed to operate their business in.
“Bendigo Bank lent us $15,000…so we had friends who helped lay the slabs for a shed and put it up over a few weeks, and we bought an old panel saw and hired one unqualified person. $15,000 went a lot further then.”
While Alan’s trade was furniture manufacturing, Margot had to diversify her skillset (she had a background in design and teaching) to grow the business in any way she could.
She learnt to spray furniture and she even did cold-call marketing before entering the fateful trade show.
Now, Jimmy Possum is a multi-million-dollar business and every department of the business is managed internally.
“We design the product, we make it, we do own our own recruitment, and we freight it. We have our own trucks and deliver ourselves, we do our own visual merchandising, we do our own training, and we train our apprentices at the factory.
“We have our own art department, we do our own marketing -we do it all in-house.”
Margot said both her own and Alan’s “fierce independence” was a key reason they did everything in-house.
They also felt they could offer a better service to customers when they had control over the end-to-end experience.
Margot said a bad experience with a freight company was the reason they decided to buy their own trucks and deliver product.
“We were sick of freighters breaking our product. I was at our Brisbane store once, and a truck arrived, and every single piece of furniture was damaged in some way.
“Ultimately it was to the customers’ disadvantage.”
But Margot believed the growth journey and independence Jimmy Possum had might not be attainable to business owners starting out now.
“It’s different now, you actually need to collaborate with people in business. You’ve got to have a hashtag and an app beside you all the time.“
Margot said the list of challenges Jimmy Possum faced in its 20-year-history was long.
“If I had about three and a half days, I could go through the list.”
She recalled thinking Jimmy Possum would lose its market entirely when Chinese-imported furniture at super-low prices threatened Australian manufacturers.
At that time, Jimmy Possum was just a manufacturer, not yet a retailer.
But the team took the challenge head on and opened their own stores.
They also refined their retail model so much they diversified their manufacturing skills to meet customer needs.
“We started in our own stores. But we had other brands’ sofas. And when people came into a Jimmy Possum store they didn’t want to buy somebody else’s sofas so we had to learn how to make sofas.”
It wasn’t an easy transition.
“That was a serious headache. But now, because our specialty is actually extraordinary fabrics, sofas are out specialty.”
Margot believed the two biggest challenges for most small businesses was “money and people”.
So it was very important to make solid hiring decisions, to invest in people personally and financially, as well as always knowing the bank account’s debits and credits.
Loved Margot and Shane’s advice? During our Small Business Coach events, we also heard from other highly-successful entrepreneurs.