How We Let Our Customers Rewrite Our Business Plan

Last Updated Aug 16, 2010 2:20 PM EDT

By Sue Elliott, Co-founder, Davidson Chocolate Company, Davidson, N.C.
A month after my son, my husband and I started Davidson Chocolate Company, our community was hit with a double whammy: In September 2008, a hurricane created a two-week gas shortage in our region, and our country slipped into a recession. Not exactly the best time to sell high-end sweets.

In our first month of business, parents who were picking up their kids at the two schools across the street from our shop would come over and spend the afternoon shopping. During the gas shortage, families started driving straight home to conserve gas and money. We knew that if we didn't act quickly, we might be in serious trouble.

We Listened to Our Customers
After cutting our staff from nine employees to five -- two part-time, three full-time-- we were faced with the challenge of recovering and growing our business. Often, customers would come in to get a gourmet treat for themselves -- say, a few of our pricey truffles -- and wind up buying the same for their kids. Some complained as they left that they had spent more than they intended.

To help parents treat themselves and keep their kids happy, we created a less expensive, kid-friendly alternative to our higher-end products, which can cost up to $29.95 per pound. The new products were novelty chocolates in the shape of animals -- frogs, dogs, sheep and more -- so not only did the parents spend less money, but the kids got excited about coming back to our store. This way, parents returned more often because they felt that their dollars went further.

The next thing we did was adjust our store hours to better conform to our customers' schedules. Originally we stayed open until 6 p.m., but as we neared the summer, we thought we might be able to get more business in the evenings. Davidson is a big walking community, and we noticed that people go out for strolls or ride bikes with their families after dinner. So we decided to stay open later -- until 8:30 in the summer, and 7:00 in the winter. During that summer, we often did more business between 6 p.m. and 8 p.m. than we did during the day.

We Got Involved with the Community
Perhaps our most important decision was to connect with our immediate community through the charter and private schools next door. We began donating chocolates and coupons to school events, and printing school slogans on chocolate bars and sugar paper, all of which has made us quite popular. Parents who owned local businesses and appreciated our community-oriented business ethics began calling us with catering jobs, wholesale corporate orders, and other work. We also contributed to charity events and other community activities. While it can certainly be hard to give when things are tight, it turned out to be a wise investment in our company's future.

Maintaining Quality -- and Preparing to Grow
We've seen a lot of companies win awards for their excellent business plans and then go bust. A business plan is worthless if it doesn't grow out of an understanding of your customers' needs. It's also about knowing where to be flexible and where to hold your ground. We were willing to change the size of the chocolates and downsize the business, but we weren't willing to change the quality of our product or our customer service approach, which is what brings people into our store in the first place.

Last year we had $150,000 in sales. We're not wealthy but we're making a living doing something we love. We have plans to start a new store in Charlotte, which we hope will more than double our revenues for next year.

-- As told to Harper Willis

Before Sue Elliott and family opened the store in Davidson, they owned a chocolate store in western North Carolina, which was sold in February 2008.