Painting her way out of a corner
Painting a jungle mural from a kit in the bedroom of her new twin grandchildren was giving the artist in Patricia Newton a pain in the neck.
Why was the lion frowning? What was with the toucan’s backward ankles? And, darn, that monkey was ugly! The former Walt Disney Imagineering designer couldn’t help but paint over the offending primate, put a smile on the lion and fix the bird legs.
Wowed, her son suggested she start a business of her own to design murals aimed at parents looking to create some low-cost magic in their kids’ rooms.
Four years later, Newton’s Elephants on the Wall business sells about $100,000 a year worth of paint-by-number kits. Her 96 designs include pirate ships, princess castles, mermaids and inquisitive mom-and-baby blue dinosaurs designed to look as if they are peeking out from behind a room’s door.
The designs, which cost $29.95 to $124.95, have been filmed for Home & Garden Television’s “I Want That!,” touted in Better Homes & Gardens and praised online for their cheerful, polished graphics.
Last week, Newton shipped her latest round of product and packaging samples from the Altadena business to national fabric and crafts retailer Jo-Ann Stores Inc. A distributor hopes to have Elephants on the Wall on Jo-Ann’s shelves by next summer, she said. On Friday, Newton said she had received an order for 114 pieces from a separate distributor for sale at Wal-Mart Stores Inc.’s website.
Now, Newton is unsure where to focus her limited funds and how to take the next steps to build sales momentum.
“There isn’t a closet big enough for the hats I have to wear,” says Newton, who ran her own graphic design shop after leaving Disney Co.
Consultant Warren Cooley, a small-business owner turned executive at the Valley Economic Development Center in Van Nuys, met with Newton and her husband, Ross, who handles shipping and accounting while running his own home-based business selling drug-test kits.
Cooley was impressed with the quality of the mural kit, its simple instructions and its functional and attractive tubular packaging.
“What an imaginative product she has created,” says Cooley, who heads the nonprofit’s retail and business services division. Here are some of his recommendations:
* Target major retailers. Elephants on the Wall filled orders from its first retailer customers recently, including the Milkshakes & Honey boutique in Elk Grove, Calif., and a small chain in Mexico. Although that exposure could help increase sales, Cooley advises the small firm to go after much bigger fish in its bid to increase revenue.
Elephants on the Wall already has the strong product, great packaging and display materials needed to attract big retailers, he says.
“It’s at a place where it’s got really good potential for a major chain to pick it up,” Cooley says.
Newton is jazzed to be working on the low-cost line for Jo-Ann’s, but she says she has had little luck cracking the corporate wall at other national chains.
Cooley helped her create a hit list by category: Baby product stores; broad category stores, such as Target Corp.; paint and wallpaper stores and home improvement stores such as Lowe’s Cos. The consultant, who says he knows his way around the new-product development scene at several major retailers, will pick 10 to contact. When a buyer agrees to look at the product -- and he hopes four to six will -- he’ll turn the work over to Newton.
“It’s a godsend,” Newton says. “I hit a wall trying to reach these people, I don’t know whom to call and then they don’t return calls.”
* Create a strategic business plan. Like many small-business owners, Newton has never sat down and written a business plan. Doing so would force her to take time for the planning and business development strategizing she has said she wants for her business.
Cooley says he will help her prepare a business strategy plan that will focus on creating goals and strategies as the business nears the end of what he considers Phase 1 of its growth.
“This type of plan is more appropriate because the business needs more action steps than planning steps,” he says.
He wants to see three to five strategies for the next two phases of growth that cover product development, marketing, financing and other key areas over the next five years. Each strategy will include the steps to be taken and designate who will be responsible for them.
* Test pricing. Newton has enough margin to enable her to experiment with the lower pricing that large retailers may require, the consultant says. But she’ll have to keep her eye on the price structure, test different levels and product sizes.
She may be able to make a profit on a lower price if she cracks a larger retailer, which leads to higher volume sales, he says. Being flexible is important to get her product in the brick-and-mortar retail environment he thinks is best for it.
“It’s got a quality, and yet a simplicity to it, that makes its greatest impact when seen,” Cooley says.
* Prepare to tap debt financing. To move to the next stage of growth, the company will have to find more capital, Cooley says. He expects that the first orders from large retailers will be big, around 4,000 to 6,000 units, and cost the company $20,000 to $25,000 each to fill.
Cooley recommends that Newton apply for a $50,000 line of credit. With a line of credit, Newton uses only what she needs from the total.
The consultant, who helps other small firms find loans through the Valley Economic Development Center, says he will help her put together a loan package.
* Protect intellectual property. Cooley advises all small-business owners to be sure to protect their inventions, designs, writings and other intellectual property rights with patents, trademarks or copyrights. That protection is even more important when they step onto the national stage, Cooley says.
“The product is really good,” he says. “She just needs more eyes on it.”
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Elephants on the Wall
Business: The Altadena company designs and sells paint-by-number wall murals for children’s rooms.
Owner: Patricia W. Newton
Employees: One part-timer
Revenue: $100,000 projected for 2008
Founded: July 2005
Start-up funds: $50,000 from credit cards, family and home equity loans
CHALLENGE
How to find and focus on the best direction for the business and find the money needed to grow.
GOAL
Newton wants to build a brand through more online sales (www.elephantsonthewall.com) and become a major player in stores such as Babies R Us, Target, Pottery Barn Kids and zoo gift shops.
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Meet the expert:
WARREN COOLEY
Cooley is director of retail and business services at the Valley Economic Development Center, a nonprofit organization that receives private and government funding to counsel entrepreneurs, arrange financing for businesses and foster job creation. The Van Nuys-based group has six offices in Los Angeles County and owns the Pacoima Development Federal Credit Union. Cooley has owned several businesses including an economic consulting and construction management business.
