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Need Input regarding "re-start"

    • 48 posts
    August 6, 2008 10:01 AM EDT
    I am curious...if you were able to generate over 1M in sales in just 10 1/2 months...why did you walk away from the business initially? How long ago did you have this sales surge, and how long have you been away from the biz?
    • 48 posts
    August 7, 2008 6:17 AM EDT
    Jerry -
     
    if your numbers are from 1991, isn`t there the potential that they are no longer as `relevant` as they would be if they were, say, from 2001?
     
    The reason why I ask is this:
     
    1) your notes assume that the 364 stores you did business with in 1991 would (potentially) purchase again. But maybe some are out of business. Or have new pharmacists/buyers. Or have changed their policy on buying these kinds of things?
     
    2) Further, since the `fight obesity` market has exploded, there are a ton of `fight obesity` products out there. Your solution is not as unique as it was 17 years ago. Perhaps many phrmacies will believe they offer enough options currently and don`t need yours.
     
    3) Pricing point - 17 years ago you obviously had the right pricing points. But today, with more competition and a crappy economy...how will your pricing fare? To the pharmacist? To the Consumer?
     
    I`m not picking a fight, I`m just asking questions that I don`t know the answer to and don`t know the market well enough to find out on my own. I`m not even suggesting that I am a candidate for investing with you...but if I were to invest in a business that was profitable 17 years ago but has been inactive since, I would be wary about using those old sales numbers as the sole data for  forming year-forward projections.
    • 11 posts
    August 6, 2008 6:24 AM EDT
    Re-starting a previously very successful (and profitable) business
    enigma, mystery, paradox, puzzle, question

    And all of the above.

    At the suggestion of another "blogger", I am beginning this thread in hopes of solving the headlined problem(s)
    I am in the earliest stages of entertaining the thought of "re-starting" my previously very successful (and profitable) business.

    Two issues still to be addressed and resolved.

    First

    , because of my age..... I am quite interested in finding someone who might at some time be interested in assuming ownership of a new company.........

    and

    Secondly

    , if I do indeed pursue the re-start, and do attract the right individual(s) to join me in this venture, I am definitely going to require a reasonable investment on the part of that person or persons.

    With all that said, I am seeking input, thoughts, ideas, suggestions, advice, and generally opinions from the readers of this great forum regarding issues described above.

    Who knows? This just might find a perfect match and everyone can enter a win/win situation.

    As I attempt to weigh all aspects to be considered, one factor seems to surface more frequently than others.

    How to place a "value" on the overall proposition and thereby determine what would be a fair and reasonable investment amount to hold forth to that person or persons who may be interested in joining with me in this venture.

    Make the amount too high, and completely discourage any and all persons interested.

    Make it too low, and fail to show the true potential held within.

     Just to share with the readers a few significant, material facts.

    This re-start company will participate in a market presently determined to be an astounding $35B
    (yes BILLION) market and growing.

    Previously, my company was positioned in a very small niche of the overall marketplace and yet enjoyed sales which went from a zero base initially to over $1M in sales in just 10 ½ months period of time with a substantial profit being reported.

     To quickly summarize, this "re-start" venture is literally in a mode of "turn the key to the on position and start your engines".

     Please feel free to make comments, suggestions etc.   I appreciate all input.

     Jerry aka ijitterbug

     

     

     

     

    • 11 posts
    August 6, 2008 5:05 PM EDT
    Hello DefMall and CraigL:
    Thanks to each of you for responding to my post asking for suggestions etc. regarding the possible "re-start" of my former company.
     
    Let me address the questions "why did you walk away from the business initially? How long ago did you have this sales surge, and how long have you been away from the biz? "

    To make a long story short and more importantly, straight to the point. I sold my company in late November 1991 to an individual who had a great deal of money and was consistently pressing me to either invest in the company or buy it in its entirety. Well, I named a price, and darned if he didn’t take me up. In concluding the transaction I had very good legal counsel, and as part of the sale in what I felt was an unlikely eventuality; should the company fail etc.,  I retained all rights to formula(s), contract manufacturing contacts, and of particular value, the proprietary marketing methodology and stratagems which I conceived, developed, implemented and managed. Flash forward just a short 18 months after I consummated the sale, the buyer placed the company into insolvency. There were several causes for his actions, not the least of which were his attempts to increase his "bottom line" by reducing the advertising regularity, and even worse, changing the formula(s) of the product using less expensive ingredients.

    "how long have you been away from the biz? " After his (the purchaser of the company) having placed it into insolvency, I immediately through legal recourse"reclaimed" all rights and other valuable assets. As I took preliminary steps toward re-establishing my company, I began to have some urgent health problems which led to my having a 6 way bypass. Needless to say, that slowed me down considerably. Some 6 months of regaining a degree of normalcy and not having anyone at that particular time who was interested in assisting me with running the company and eventually taking full stewardship, I opted to curtail my efforts to rebuild the company.

    Now to address the question, "what sort of business this was" etc.

     Without going into great depth regarding the innermost workings of the company,

    With the collaboration of a well known Clinical Nutritionist (MD), Pharmacologists, Toxicologists, numerous Rph’s (registered pharmacists) and relying on various publicized studies and reports of highly acclaimed researchers (PHDs), I was instrumental in creating, designing and developing a scientifically formulated balance of ingredients into a chewable tablet so designed as to assist a person in their efforts to stay on a weight loss regimen.

    This product was marketed to a very specific niche. The Independent Retail Drugstore.

    Initially, I chose a limited (12 Western State) geographical market to enter. In a relatively short period of time, by using a highly creative and effective methodology designed by me, I was able to secure a small number (less than 600) Independent Retail Drugstores to participate in my company program.  There are presently 18,478 Independent Retail Drugstores in the United States.
    A quick point to be made here.   If the company after its "re-start" is only able to acquire 10% of available stores nationally, projections show this would result in sales exceeding $3M.  Fact:  My previous efforts to bring stores into the program resulted in over 30% of stores solicited joined the program.

    It is of great importance to note there are two ABSOLUTES when selling into a Drugstore.

    1st.

    Literally all stores have limited shelf space. It is very difficult to convince a Pharmacist to bring something into his/her store without a prior demand for the product.

    2nd.

    Once a product is accepted by the Pharmacist to be placed in his/her store.....it is of critical importance that DEMAND for product is created, ergo, the product quickly moves off the shelf and repeat sales follow.

    These two criteria were addressed early on by me. I created and implemented specific methods to assure quick acceptance of my product into the store, and then followed with a unique and highly effective method to build sales for my product in each store in the company program.

    To conclude this rather lengthy disclosure.........

    Contract manufacturers are in place, the method by which individual stores are brought into the program is in place.

    And best of all, the United States National Institute of Health has declared "Obesity has risen to epidemic levels in the U.S. It causes devastating and costly health problems, reduces life expectancy, and is associated with stigma and discrimination."

    In a small way, the company’s chewable tablet will help fight the "Battle of the Bulge".

    Hope this answers some of the questions.

    Jerry aka ijitterbug

     

     
     
    • 11 posts
    August 7, 2008 5:56 AM EDT
    DefMall and CraigL
    and all other readers.

    As a brief follow up to my previous post in which I highlighted the overall aspects of a "re-start" of my company being discussed, I felt the following information might provide further insight of the total picture and potential financial results.

    First.... I mentioned that the company had initiqally acquired less than 600 Independent Retail Drugstore accounts which resulted in sales of slightly more than $1M in just 10 ½ Months.

    Actual numbers were as follows....    Excerpts are taken from historical data of July 1991

    Total accounts = 535 stores

    In July 1991, 68 % (364) of the stores purchased product. Average purchase per store was $324.00 x 363 stores = $117,936.00 total sales.

    If the above numbers are "extrapolated" to reflect results today (increase in selling price etc.)

    the results for the same number of stores would be sales of $170,352.00

    Projecting out for a full twelve month selling cycle.... Annual sales would exceed $2M with the same 535 store base.

    Again, referring to the total number of Independent Retail Drugstores nationwide of 18,478 and further assuming an acquisition rate of merely 10%.... (1,848)

    Applying same purchasing formula from July 1991...

    1,848 x 68% = 1,257 stores would purchase product. At today’s proposed selling price

    Total monthly sales generated would be $58,827.60 for an

    Annual Total sales projected to be $3,459,312.00

    To the heart of the matter.

    If there a person or persons is interested in pursuing this "re-start" with me,

    the question is.....

    What would be a reasonable investment required of that person or persons based on above.

    Some preliminary thoughts, suggestions, ideas would be greatly appreciated.

    Thanks again to each of our readers for your input.

    Jerry aka ijitterbug

    • 11 posts
    August 7, 2008 3:12 PM EDT
    Hi DefMall:

    Good points all.....

    Let see if we can dispel your doubts underlying each point.

    1st.
    There is no assumption voiced or implied that all, or even any of the original stores with whom I did business with during 1991 are still in business, much less would be participants once again if my company is "re-started". To the contrary, there is a greater potential that many, if indeed, not all of them are no longer in business having been forced out by large chain stores coming on the scene or retirement of the original proprietors. (limited research however does show a limited number of those drugstores still in business) Numbers referred to in my previous statements reflect only percentages of stores who were participants in my company’s program that bought product. The present marketplace is comprised of some 18,478 Independent Retail Drugstores in existence today.

    2nd.

    You are right in observing that the "fight obesity` market has exploded", particularly in light of the fact that the NIH has made obesity one of its primary concerns. However my product, a chewable tablet, made from all natural ingredients and scientifically formulated for its specific purpose still has a great deal of exclusivity to the marketplace. In fact, I know of no other product which would be considered direct competition presently available. Your statement "Perhaps many phrmacies (sic) will believe they offer enough options currently and don`t need yours" fails to take into consideration many factors. The very fact that each store does indeed have a plethora of weight loss products on their shelves (as do all their competitors) is to our advantage. Part of the presentation made to each store in an attempt to bring them into our program is to emphasize to the decision maker the fact that we are selling strictly to the Independent and will not go to their major competitors ie: the WalMarts, Walgreens, RiteAids, etc. with our product. It is sold strictly through the Independent. (Great selling point) and equally as important, we will not place every Independent in a given market in our program. We offer a degree of marketplace exclusivity to participating pharmacies.

    3rd.

    "Pricing point" Our product will be competitively priced. Up to date research of products currently on the shelves of drugstores indicate there are several products priced at, or even in some cases, above where ours will be priced.

    Without divulging strategic marketing and creative advertising methods, etc., let me assure you that in today’s competitive market, I am highly optimistic that our methods and strategies will have even greater impact and reception than in 1991. More and more Independents are facing mounting pressure from some of the "giants" in the marketplace and welcome literally "with open arms" a company such as ours who offers them something their competition cannot get. Couple that fact with the highly unique advertising method we will employ almost guarantees our company’s success once again.

    DefMall, the two pronged methodologies (proprietary) which will again be employed if the company does "re-start" have potentially even more significant importance today than they had originally.

    Thanks again for the considerable thought you have given this thus far. Your questions and input are greatly appreciated.

    Jerry aka ijitterbug

     
    • 11 posts
    August 8, 2008 5:25 AM EDT

    To all readers ...

    Subject: Input requested concerning possible "re-start" of company

    Thanks to everyone who has come to this forum and presented some great questions and thoughts regarding my original post.

    Crunch time! Please take a "leap of faith" with me.

    Hopefully my response(s) to questions have served to indicate how strongly I feel about the potential which exists for such a "re-start".

    For the moment at least, please allow me to ask everyone who would respond, to take at face value the following assumptions regarding the "re-start" and projections thereof.

    ASSUME

    Of the 18,478 existing Independent Retail Drugstores the "re_start" company will be able to acquire a very conservative 10% (1,847) of these stores who are willing to participate in the company’s program.

    68% of the 1,847 (1,257) stores would purchase product monthly

    $58,827.60 per month = $3,459,312.00 annualized sales

    Very conservative estimate of projected minimum net/net profit (after all expense and taxes)

    6.237 % of gross = $215,757.28 net/net profit

    The question. Taken at face value, if those figures were actualized,

    What dollar amount would you determine to be fair and equitable as a minimal investment in this "re-start"?

    Jerry aka ijitterbug