There are lots of reasons why new businesses fail. Sometimes though, it’s just a case of losing heart and giving up because things haven’t worked out as hoped.
When things are stalled in your new farm enterprise, how long do you wait? When do fortitude and determination turn into folly and a blind refusal to recognize that things just aren’t working?
It’s a question Nina Gupta faced when she was pioneering compact fluorescent lighting (CFLs) in the early 1990s. Today, Greenlite Lighting Corp., headquartered in Point Clare, Que., is a success story with sales of $30 million annually – five times what it did five years ago.
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But it didn’t happen overnight.
“We had no idea it was going to take as long as it did,” says Gupta.
“It took six or seven years before it really took off. In the beginning our sales were $300,000 a year. We’d call potential customers and they literally would not know what we were talking about. They’d just go, ‘what?’ “
Still, Gupta never wavered. She not only believed fervently that energy-efficient lighting was going to kill off incandescent bulbs, but she was also convinced that to take on the General Electrics and Phillips of the world, Greenlite had to stay green. She believed that only by sticking to energy-efficient lighting would her company develop a cachet with consumers and acquire the expertise that comes from being wholly committed to one technology.
Of course, that meant refusing to sell incandescent or halogen lighting, which would have been the easy way to supplement sales in those tough early years.
What kept her going, she says, was knowing that the fundamentals of her business plan remained valid.
Gupta’s reasoning was that lighting is a necessity that ranks just behind food, water and shelter. We might turn off lights to save energy costs, but we won’t cut back to just one lamp in the living room.
As well, incandescent lighting would always be second-rate because creating light through heat is fundamentally wasteful.
Also, energy is only going to get more expensive.
The other key was having the financial ability to stay in the game.
“Even today, with a turnover of $30 million, we only have 25 people,” Gupta says.
“When I started it was just me and one other girl. We’re very old school when it comes to finances. So we could afford to wait for it to turn around.”
But waiting didn’t mean doing nothing. Gupta worked tirelessly to understand the marketplace, often by setting up kiosks in malls to talk to consumers. She already knew people were confused by the different wattage, strange shapes and other quirks of CFLs. However, knowing someone’s concerns and knowing how to address them are two different things. Gupta says she “learned the hard way” that you develop effective sales strategies by spending lots of time listening to potential customers.
That’s why Greenlite has become famous for giving away its lights.
“Younger people are no problem, but people in the age 35 and up category always say to me, ‘I bought one 10 years ago for 10 or 15 bucks, and it hissed and flickered and the light had a funny colour,’ ” Gupta says.
“I can talk all I want to that person and it won’t do a bit of good because they got burned 10 years ago. The only way to show them that the technology has changed and it doesn’t hiss or flicker is to put one in their hands for free.”
Today, Gupta has a shelf full of awards for entrepreneurship, but she says she will never forget all those years of missed sales targets and long unrewarded hours.
Many farmer entrepreneurs are in exactly that place. They’ve spent years building their farm market, agritourism enterprise or value-added business. However, the payoff hasn’t come and now with the economy in the grips of a recession, they’re wondering if it ever will.
Gupta’s advice is to ignore the frustration and focus on the reasons they started the business in the first place.
“If you can poke a hole in your fundamentals, then you should get out,” she says.
“But if the fundamentals are sound and you can afford to hang in there, I’d say stick with it.
“There was no way I was going to quit because I knew the moment I threw in the towel that would be when this business took off.”
Thinking of packing it in? Maybe it’s time to haul out that business plan and see if your bright idea still shines.
Glenn Cheater is editor of the Canadian Farm Manager, the newsletter of the Canadian Farm Business Management Council. The newsletter as well as archived columns from this series can be found at www.farmcentre.com.
