EMH prepared a serial entrepreneur for growth through ensuring current operations were optimized and future plans were well-vetted.
Sucré, a purveyor of high-end confections, chocolates and cakes, had established a thriving retail location after only a short time in business. To support demand, the company moved production from its shop, located in uptown New Orleans, to an offsite facility with greater capacity. Confident in the appeal of his products and brand, the owner sought to raise $1 million in capital to fuel aggressive growth plans. These plans included expansion into three new Texas markets over the short span of two years.
The owner of Sucré approached EMH Strategy (EMH) to create a financial model that better reflected the company’s growth potential. This initial project, however, opened the door for EMH to assist Sucré in other areas, including strategic planning, operations, financial performance and human resource management.
EMH worked closely with Sucré’s management team to create a financial model, updating it on a monthly basis to refine forecasted assumptions. As EMH consultants dove deep into the project and became familiar with the business and its members, they saw opportunities to contribute additional expertise in the following areas:
Growth and Expansion
After looking at the business more closely, EMH found that the current model would not be adequate to fuel the aggressive growth plans without undue risk. EMH consultants advised the owner to first attempt to seek growth in ways that were not as capital-intensive and uncertain as building new stores in unfamiliar markets. We discussed the possibilities for growth such as greater attention to online sales, the creation of distribution channels in larger retailers and shopping centers, and finding retail locations in the local market. These solutions would take advantage of the existing production facility and require a single regional manager to efficiently serve the growing business.
During peak times, such as Christmas and Mardi Gras, Sucré’s resources and employees became overtaxed. EMH developed a model that projected demand and worked with management to implement a process model that mitigated extreme peaks and valleys in production, and reduced total labor cost. In addition, our consultants negotiated with overseas packaging vendors to arrive at optimal order sizes which reduced inventory costs.
Sucré’s owners began their careers in the high-pressure world of restaurant kitchens, where the culture tends to be defined by a hardline management style. Because this management style does not translate well to a retail or corporate setting, EMH provided training regarding how to motivate employees and created an employee manual to set clear guidelines and structure. Additionally, EMH created systems and procedures at the retail and management level that enabled better and more efficient communication, which translated to optimal customer service.
EMH Strategy determined the company’s value, and Sucré received funding from investors it was seeking. In addition, EMH’s advice about finding a reasonable pace of growth made both the owner and investors more comfortable with the deal. Sucré has also taken a more conservative and less risky path to expansion into new markets. While Sucré has opted for a slower growth strategy, the company remains ambitious in its plans. It has grown through new distribution channels in its local market, an increase in online sales, and a new retail location in Metairie.
In addition, EMH’s consulting work for Sucré has made operations more efficient, reduced expenses, and created a happier, more productive work environment.