To start a new business… or to buy an existing business? That’s the question that many entrepreneurs ask themselves before taking the plunge. Creating a business from scratch, while intoxicating during the day-dream phase, may not be as exciting when it comes to the reality of execution. After all, there are so many steps to follow to plan, fund, and market the new business idea. With the concept not yet ‘proven’, there are the added hurdles to jump over. While many of us may ultimately choose this route, what about buying an existing business instead? After all, the big plus that comes with buying an existing business is that it’s already up and running. The planning legwork has already been done. If the business is already generating revenue, this may be a better model for you if you want to mitigate your tolerance for risk but want to be your own boss, especially if it’s a business that you’re passionate about.
Q: Why are you passionate about Li-Lac Chocolates?
A: Li-Lac Chocolates is an 88-year old company with a tradition of hand-making old-world chocolates. My passion for this business comes from the heritage and old-world charm of the brand. Almost all the recipes were created by our founder, George Demetrious, who opened this shop in in Greenwich Village in 1923. His recipes and production methods have been passed down through three generations. Today every item is still made by hand in small batches using copper kettles and marble tables.
Q: Wow! Copper kettles! Ok, so what were you doing before Li-Lac?
A: I worked at Bath & Body Works and Unilever – big multi-national companies – in brand development for skincare and beauty products. I was fortunate in my career to have been a part of some very entrepreneurial campaigns – such as the launch of the now-famous Dove ‘Real Beauty’ campaign. I’ve always had in the back of my mind that someday I’d like to run my own business, but didn’t really know what kind of business I wanted. When I found Li-Lac Chocolates, I just fell in love with the brand and the products. I knew this was the business for me.
Q: As a corporate refugee turned entrepreneur, how important do you feel having experience is- especially since you weren’t a ‘chocolatier’ by training?
A: This is a tricky question because experience can be both an asset and a liability. Of course, having the right business skills are critical. But sometimes success comes from seeing things from a different perspective. At Li-Lac I am applying fundamental skills that I learned in marketing and management which will serve as building blocks for creating a solid foundation. But I can also look at the business in a way people inside the industry can’t – because I’m not bound by the conventions of the industry. For example, when I look at the business at Li-Lac my first inclination is to think ‘how would we do it at Bath & Body Works’. You can start to imagine how this kind of approach can quickly lead to breakthrough new ideas.
Q: What’s it like running a business in the current economy? Do you think it can work to your advantage?
A: Even in tough economies, some businesses thrive while others falter. At Li-Lac there are several things we can leverage to our advantage. First, we can focus on inexpensive guerilla marketing to promote the business. We can also apply disciplined principles in the way we manage costs. Finally, we can create the right incentives for our employees so everyone is working towards the same objectives (and rewarded accordingly when they are achieved). These things may seem obvious or basic, but can lead to a competitive advantage. Plus everyone loves chocolates, so that’s always an advantage!
A follow up discussion with Anthony revealed the importance of doing your homework to understand what’s involved with purchasing a business, such as understanding the lease/operating terms, absorbing any liabilities, and retaining key employees. Getting clarity around all the key terms of a business purchase is critical so you can operate and grow your business successfully. I know that Anthony spent almost a full year performing due diligence and making sure that this was the right business for him. So, even if you decide to buy an existing business, do your homework.