From Candles to Iconic Canadian Brand: A Small Business Turnaround Story

The Journey of a Serial Entrepreneur

Adam Goldberg's entrepreneurial journey began early, working in his father's retail business from age 16. By his early 20s, he was running a chain of 80 stores with $75-80 million in revenue and 1,000 employees. After selling his stake to his brother in 2000, Adam ventured into new territory.

He briefly experimented with a jewelry retail concept that didn't pan out, then spent 20 years building a successful wholesale costume jewelry business. By 2020, that company was doing $40-50 million in revenue with over 100 employees. Adam sold a majority stake and initially retired to Florida.

The Search for a New Challenge

Despite achieving financial success, Adam felt restless in retirement. His wife and peers encouraged him to find a new business venture. After exploring several options, Adam's accountant introduced him to a small, struggling candle manufacturing business.

The company had seen its revenue drop from $5 million to around $1.2-1.3 million. The founder had passed away during COVID, leaving his wife running the business in distress. Despite its problems, Adam saw potential.

Buying and Turning Around a Struggling Business

Adam purchased the candle company for $600,000 total - $300,000 for inventory and goodwill, plus $300,000 in working capital. He initially partnered with a friend, though that arrangement only lasted a few months.

The early days were challenging. Adam lost several major customers, including Staples, shortly after taking over. Revenue dropped further as longstanding relationships ended. Adam realized he had misjudged the situation and failed to do proper due diligence.

He made several mistakes initially, including:

• Overhiring, bringing on expensive executives and bloating the payroll
• Not focusing enough on sales and revenue generation
• Lacking deep product knowledge to effectively sell to customers
• Disappearing to Florida for months while trying to run the business remotely

Adam had to make difficult decisions, letting go of most employees including the founder's daughter. He apologized to the remaining staff and became a student of the business, learning the intricacies of candle manufacturing.

Finding a Niche with Maple Syrup Candles

A key turning point came when Adam attended a major gift show in Atlanta. After writing just $700 in orders over 5 days, he realized their undifferentiated candles weren't compelling in a crowded market.

Adam decided to focus on an existing product line - maple syrup scented candles in iconic Canadian maple syrup tins. These had always been popular, accounting for about half of the company's volume.

He brought on a new partner, a successful retailer with 100 stores in Canada. Together they developed a vision to license the iconic maple syrup tin artwork and expand it to other products beyond just candles.

Licensing an Iconic Canadian Image

The maple syrup tin image features a red cabin in a snowy Canadian forest, with French text for "maple syrup." It's deeply nostalgic and instantly recognizable to Canadians.

Adam and his partner pitched the owners of the artwork, Dominion Grimm, on an expanded licensing deal. With their professional backgrounds and vision for elevating the brand, they secured an agreement.

This allowed them to use the artwork on a wide range of products beyond just candles - mugs, clothing, accessories and more. The goal was to become "the Maple Guys" with an expanded line of Canadian-themed merchandise.

Early Success and Future Growth

The new strategy is already showing promise:

• A major retailer ordered 10,000 mugs with the iconic artwork
• The candle business has rebounded, with February sales beating budget by 200%
• New customers are seeking out Canadian-made products amid supply chain and trade issues
• There's strong interest from retailers in the expanded product line

Adam is projecting 2024 revenue around $1.5 million, with hopes to double that in 2025. While still early days, he's confident in the potential for significant growth.

Key factors in the turnaround include:

• Focusing on a differentiated niche (maple syrup scented candles) rather than competing as a generic candle maker
• Leveraging existing brand equity in the iconic maple syrup tin image
• Expanding into new product categories beyond just candles
• Emphasizing the "Made in Canada" aspect amid trade tensions
• Maintaining the high-quality maple scent that drives repeat purchases

Lessons Learned

Adam's experience offers several insights for other entrepreneurs and business buyers:

1. Do proper due diligence - Adam regrets not speaking to key customers before the purchase to gauge their loyalty.

2. Focus on sales first - Revenue solves many problems. Adam initially got distracted by other priorities.

3. Learn the business deeply - As an industry outsider, Adam needed time to truly understand candle manufacturing and sales.

4. Find a differentiator - Generic products struggle in crowded markets. The maple syrup niche provided a unique angle.

5. Leverage existing assets - The maple tin artwork was an underutilized asset with huge potential.

6. Be willing to pivot - When the initial strategy wasn't working, Adam was open to dramatically shifting direction.

7. Build strong partnerships - Bringing on an experienced retail partner provided crucial strategic guidance.

8. Take care of key employees - Despite layoffs, Adam worked to improve morale and give remaining staff a sense of ownership.

9. Balance work and life - Even while fully committed to the business, Adam maintains flexibility to spend time in Florida.

10. Stay humble and keep learning - Adam's willingness to admit mistakes and become a student of the business was crucial.

The Human Side of Small Business

One of Adam's key realizations was the more personal nature of running a small business compared to his previous larger companies. He now knows all his employees by name and feels a deep responsibility to them.

While initially viewing it as just a "lifestyle business," Adam has become fully invested in its success - not just financially, but emotionally. He takes pride in providing stable jobs and building something meaningful.

This human element has added a new dimension of satisfaction to his entrepreneurial journey. For Adam, success is no longer just about revenue and profits, but about the impact on people's lives and creating a positive company culture.

Looking Ahead

While still early in the turnaround process, Adam is optimistic about the future. The expanded product line and licensing strategy open up significant growth potential. He's committed to seeing it through, leveraging his decades of retail and wholesale experience.

At the same time, Adam is mindful of maintaining work-life balance. He remains actively involved even when working remotely from Florida. His goal is to be "all in" with passion and commitment, but without the stress and burnout of his younger years.

For entrepreneurs considering buying a small business, Adam's story highlights both the challenges and rewards. While not without risk, acquiring and turning around a struggling company can be deeply fulfilling - financially, professionally, and personally.

By focusing on a differentiated niche, leveraging existing assets, and building strong partnerships, it's possible to breathe new life into a declining business. With persistence, humility, and a willingness to learn, even a "micro-business" can become a thriving enterprise.

Article created from: https://www.youtube.com/watch?v=vp_HFXcI4Ug