Everyone loves stories of regular folks overcoming huge obstacles en route to glory; it’s the backbone of more or less every movie ever made…cinema classics like say Invincible, the amazing saga of one man’s dream to play for the Philadelphia Eagles. Only three months until the season kicks off in Green Bay. Go Birds.
Here are three such entrepreneurs who dealt with a con man, the financial ramifications of divorce and the watery aftermath of Hurricane Katrina. I discovered how strong personal fortitude can be in times of duress for Success Magazine.
And also found out that no trip to New Orleans is complete without a handheld strawberry pie.
Every entrepreneur goes through tough times, but when things got downright impossible, these three business owners refused to give up.
An old joke begins: How do you make God laugh? The punch line: Make a plan. Life throws a lot of stuff at us, which is why handling adversity is at the heart of the human condition.Reid Fujita, Carol Gardner, and Drew Ramsey each made plans that must have given the Almighty quite a chuckle. Their livelihoods took a beating at the hands of a con man, a divorce, and a killer storm. But you can’t keep a good business owner down. Here you’ll meet three individuals who had the fortitude to rise up, stay strong, and get back in the race.
REID FUJITA
CEO, CINNAMON GIRL
AGE: 41
LOCATION: HONOLULU, HAWAII
INDUSTRY: FASHION
According to the Association of Certified Fraud Examiners, small
businesses (those with fewer than 100 employees) lose considerable
amounts of money to swindlers every year—about $190,000 per victim.
Just ask Reid Fujita. “Nobody likes to get ripped off,” he says, “but
hopefully, some budding entrepreneur can learn from my mistakes.”
In 1989, Fujita and a friend, Bill Speck created H30, a tabloid newspaper focused solely on Hawaiian surfing. In 1993, H3O became a full-fledged media company with the debut of a surfing television show that was syndicated to regional affiliates of the Prime Sports Network, and included big-wave footage by surfing great Mark Foo. “H3O was never really profitable, but it was great fun to build, and we did all right in the years it was ripping,” Fujita says, estimating that the company made over a million dollars in its best year.
Then things started heading south. Two days before Christmas in 1994, Foo died in an 18-foot wave crash. Fox bought out Prime Sports in the late 1990s and the program petered out.
H3O forged ahead for another couple of years, but the economy took a dip that walloped the surfing industry, and H30’s sales dropped 30%. Fujita soon found himself in growing debt, and decided to sell.
He rejected two cash offers came in from local buyers, which he felt undervalued his life’s work. And then he got a call from a “Mr. X” in Los Angeles. Mr. X’s convoluted scheme to steal as much as he could from Fujita initially looked like an attractive deal. He agreed to buy all of H30’s stock, and his claims that he had the means to do it checked out when Fujita verified them. Mr. X also agreed to assume all of H30’s growing debt. The total sales price would be $145,000. Mr. X made an up-front payment of $25,000 and agreed to pay Fujita $2,000 a month for the next five years. A well-respected law firm handled the deal for Mr. X, which further bolstered Fujita’s impression that H30 was in good hands.
After the sale, Fujita happily teamed up with his wife, Jonelle, to help run Cinnamon Girl, her fledgling dress company. But it soon became obvious that Fujita’s trust in Mr. X had been misplaced. Fujita learned that freelance writers and photographers who had worked for H30 weren’t getting paid, staffers were jumping ship, and the rent was long overdue. Then American Express started calling. They wanted to know when Fujita planned to pay H30’s $18,000 bill.
Four months after the August 1998 sale, Fujita checked out the H30 office and beheld a nightmare. Just about everything was gone. “It was bad news. I knew I’d been jacked,” he says.
Rooting through the debris, Fujita found a list of serial numbers
that corresponded to several pieces of expensive¬—and missing¬¬—office
equipment. Before the sale, he had provided the serial numbers to Mr. X
to apprise him of H30’s assets. Mr. X, claiming to be the owner of the
equipment, exaggerated its value and financed it for $60,000, leaving
Fujita to repay the leasing company. This scam gave Mr. X the $25,000
he used to pay Fujita. In the end, Mr X walked away with around
$200,000 and the fraud cost Fujita a total of $150,000. He didn’t
finish repaying H30’s debts until 2003.
Perhaps surprisingly, Fujita never filed criminal charges. He believes Mr. X assumed that he would give up and file for bankruptcy, but he didn’t feel it was the right thing to do. “It was stressful for Jonelle when I had to borrow Cinnamon Girl money, but she was always supportive,” he says. Fortunately, Cinnamon Girl was soon off and running, and today it has seven stores, a Hawaiian manufacturing plant, more than 100 employees, and revenues upwards of $5 million. These days, Fujita has let go of most of his anger toward Mr. X. He realizes how much better he has it than his con man nemesis. “That guy has to live a nomadic life under a cloud of suspicion, while I’m close to surpassing my greatest dreams. I’d say I came out ahead.”
CAROL GARDNER
FOUNDER, ZELDA WISDOM
AGE: 61
LOCATION: PORTLAND, OREGON
INDUSTRY: GREETING CARDS
In 1997, Carol Gardner, author of a popular humor book, Bumper Sticker Wisdom, and her husband of 27 years divorced. Gardner, who was unemployed, promptly inherited a marital debt of $1.5 million on a real estate development project. She needed to find a source of income—and some inspiration—in a hurry. Her divorce attorney suggested she get a therapist, or the cheaper alternative, a pet. She took her lawyer’s advice and chose a sad-faced bulldog that mirrored her state of mind. Gardner christened her pup “Zelda”.
In 1999, Gardner was living off of four credit cards when a friend
told her about a Christmas card contest at a local pet store. The grand
prize? A 40-pound bag of dog food every month for a year. Since neither
Gardner nor Zelda was in any position to scoff at a free meal, Gardner
outfitted the dog in a Santa hat, placed her in a bubble bath, and
added the tagline, “For Christmas I got a dog for my husband … good
trade, huh?” Gardner won the dog food, but more importantly, a star was
born.
Gardner began researching the greeting card industry and learned that she had created an original character. Plenty of animals had appeared on greeting cards, but nobody had successfully combined a live, named dog, costumes, and folksy nuggets of get-through-the-day wisdom. Gardner stocked up on post-Halloween costumes and began assembling a creative team. The first line of Zelda Wisdom greeting cards debuted in January 2000. “I knew we had a perfect match of the visual and verbal,” Gardner remembers.
Though Gardner had run up $40,000 on her credit cards, she was confident that Zelda Wisdom would make a splash at the National Stationery Show in New York. Gardner took out a full-page ad in the show’s catalog that featured Zelda dressed like a bee with the tagline, “Why BEE normal?” The licensees came buzzing. Gardner started signing deals, and today there are hundreds of Zelda incarnations available all over the world.
“Gardner is tenacious, and nothing holds her back,” says Jim Bradshaw, the former president of Hallmark Canada and a sales and marketing consultant for Westland Giftware. “But she is also smart enough to drop an idea if it isn’t working. She understands that a dog and some editorial isn’t enough for a sustainable business.” Toward that end, a major media push has always been a centerpiece of Gardner’s plan. Zelda Wisdom nabbed spots on Good Morning America and even paid a visit to the queen bee herself, Oprah Winfrey.
Today, Gardner’s money woes are behind her. She won’t disclose financials, but an industry analyst says Zelda Wisdom is worth roughly $50 million. In 2005, the company inked a three-year contract with Hallmark, the premier player in the game with more than 50% of market share. Zelda Wisdom has some 80 cards out at any given time (20 new ones are rotated in annually) and more than 100 e-cards. In addition, Gardner has written seven books, and she plans to introduce a new title every year. Zelda’s Web site gets more than a million hits a month and her owner’s inspirational story has even made the pages of Chicken Soup for the Entreprenuer’s Soul.
Gardner hopes that there will be a major motion picture in Zelda’s future. But for now, she is expanding the company’s philanthropic efforts. Zelda is the official “spokesdog” for the Delta Society Pet Partners, a nonprofit organization dedicated to improving human health through service and therapy animals.
Gardner recently celebrated her 61st birthday with friends,
champagne toasts to her good fortune, and plenty of bragging about her
age. Zelda could do the same. At 10 years old, Gardner says her canine
muse is still “incredibly healthy,” although he does have two
understudies, Zoe and Zee Zee.
As for romance, Gardner is happily playing the field. Potential suitors should know her main requirement: Must love dogs. That one’s nonnegotiable.
DREW RAMSEY
OWNER, HUBIG'S PIES
AGE: 38
LOCATION: NEW ORLEANS, LOUISIANA
INDUSTRY: BAKED GOODS
As a volunteer police officer, Drew Ramsey saw it all after Hurricane Katrina devastated his city in August 2005. In the storm’s aftermath, his wife, Kathleen, then five months pregnant, paddled to safety in a canoe, not knowing if she’d ever be able to return to their house. Fiercely loyal to his hometown, Ramsey stayed behind to police New Orleans, not knowing what had become of the bakery that was his livelihood. When he first surveyed the damage done to his family’s pie-making business, founded in 1922, Ramsey felt so utterly defeated that he couldn’t see any way he could get the store open again.
By the time Ramsey started shoveling congealed pie filling out of the destroyed coolers, though, he had banished all thoughts of dropping out of the baking business. He and his partners vowed to find a way to go forward, out of loyalty to family, the company, and the community.
“You adapt, adjust, and overcome,” Ramsey says. Even today, Savory Simon is still the face of the company, serving as its official mascot.
On a typical pre-Katrina day, 30,000 to 35,000 single-serving pies
were produced. They cost 89 cents each and came in flavors like apple,
lemon, coconut, and pineapple. Hubig’s pies were sold throughout
southern Louisiana and the company was a stable, well-oiled baking
machine. Several of its employees had worked for Hubig’s for more than
25 years. “Our business was simple; and it had been going on for three
generations,” Ramsey says.
But there has been nothing simple about making pies post-Katrina. Though other Hubig’s facilites were flooded, the main plant was spared. Still, it needed many repairs. The list of problems was long: cashed gas lines, sporadic electricity, and the destruction of fully half of the company’s 20 delivery vans.
And don’t get Ramsey going on insurance companies. Though Hubig’s has always been fully insured—its policy covered business interruption—that didn’t help when the company was forced to take a reduced settlement and make hard decisions about where to allocate funds. “We had to tell longtime employees that we didn’t expect them to work for free, but we couldn’t pay them until we get back in business,” Ramsey says. He estimates that total losses have totaled well over a million dollars. The human cost was even higher. Two Hubig’s employees with over 50 years of combined experience died as a result of the storm. For five months, Hubig’s made nothing, and incoming funds went straight to the recovery effort. Many of the core employees returned, hard hats in hand, to help rebuild. This can-do spirit helped the company slowly return to something close to normalcy, and by the beginning of 2006, Hubig’s was baking pies once again. Ramsey says giving away a batch of test-run pies to first responders last January felt like “manna from heaven.”
Sales climbed each month after that, and delivery routes grew from
six to 12. The company was finally back on stable financial footing,
although that’s partly attributable to its slashed workforce. Hubig’s
has gone from 60 to 30 employees, making it a challenge to find the
time and resources to reach customers with isolated stores. But by
February 2006, Ramsey, along with his wife and newborn daughter, were
distributing free pies along a Mardi Gras parade route. The cheering
crowds made it clear that Savory Simon was still the pie man, and
everyone wanted to taste his wares. “You have to understand, these were
people who lost everything, and yet they found value in the
availability of our pies,” Ramsey says, pausing to collect himself.
“That was the moment I realized why it’s worth all the trouble to keep
our family business in New Orleans.”
(Cinnamon Girl photo by J. Demello)
(Success, May/June 2007)
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