Entrepreneur Rachael Smith knows it pays to be organized.
Her own personal experience lugging two young children through the airport, digging through her bag to find a favorite toy to calm her son, inspired her.
So the former schoolteacher invented a diaper bag with a pull-out drawer and lots of pockets to help on-the-go parents stay organized. “I thought, ‘Why don’t diaper bags have drawers?'” to make it easier for parents to find what they need instantly, Smith said. “So many bags are beautiful, but have no function. You can’t find what you need.”
Leave it to a female entrepreneur to come up with a practical solution for everyday life. Time and again, women see business opportunities when they can’t find what they need in the marketplace, experts say. As many as eight out of 10 businesses launched by women offer products and services for consumers, not businesses, because women find the consumer market more accessible, said Victoria Colligan, founder of Ladies Who Launch, which offers resources and networking for women entrepreneurs.
It makes sense that women know what other consumers want to buy, said Carol Dougal, co-president and co-founder of the Women’s Business Development Center in Chicago. “Women are the household managers. They are the biggest shoppers,” Dougal said.
Still, having an epiphany of an idea is not the same as actually bringing it to market. “Few people actually develop an idea, take it to market and are successful at it,” said James M. Lynch, owner of Biggest Possible Future, a business coaching firm in Deerfield.
Smith tapped a contact with corporate sales experience to be her chief operating officer, and her resolve carried her forward, Lynch said.
Chicago inventor Lori Greiner is another persistent entrepreneur who knows what women want. Her first product was a jewelry organizer that provided a way to hang 100 pairs of earrings, safeguarding them from tangles. By the end of her first year in business, she had sold about $1 million worth of organizers in JCPenney stores and on Home Shopping Network.
Fourteen years and more than 250 products later, Greiner is a regular on QVC with a monthly program called “Clever and Unique Creations by Lori Greiner.” She has introduced 30 to 40 new products a year, including cosmetics organizers, cell phone holders and cooking utensils.
“I have an innate instinct for knowing what’s going to work,” she said. Her company, For Your Ease Only Inc., has achieved more than $350 million in sales since it began in 1996, she said.
During the recession, she shifted to more inexpensive products. In general, she said, “$19.99 is a sweet spot,” though a popular mirrored jewelry cabinet sells for $145.
While new product ideas came easily to Greiner from the start, the hard part was getting retailers’ attention. With a directory of retailers she found in the library, Greiner started calling the largest ones. Most wouldn’t return her calls, but Greiner’s persistence paid off when JCPenney agreed to put the jewelry organizer in Chicago stores and take it nationwide if it did well. By demonstrating the product, Greiner boosted sales and won the national account.
A successful stint on Home Shopping Network led to an appearance on QVC UK, which in turn led her to QVC USA, where she has been a regular for the past 10 years.
Finding a major customer is critical to succeeding with low-priced products. “With a small household product, you don’t get the big bucks or profit margin quickly,” said Dougal of the Women’s Business Development Center. “It takes an awful lot of diaper bags to make a lot of money.”
It took Smith about a year and plenty of capital to launch the business and create a prototype. “You need $100,000 or more to get a business like this off the ground,” Smith said.
Smith got her foot in the door at Kmart through networking with other mothers at play groups. One friend knew someone whose sister worked at Kmart and she invited Smith to make a pitch in June 2009.
That type of networking is becoming more common, Dougal said. “Women now are very happy talking shop with one another,” she said. While men might golf together, women network “right there on the playground,” where they might find an accountant, an attorney and a customer among their peers.
By January, Smith’s diaper bags were selling in Kmart stores for about $25, while specialty boutiques sell deluxe versions for as much as $120. “New ideas can come from anyone,” said Cheryl Olinger, general merchandise manager at Sears Holdings’ Kids-Kmart.
While some female inventors downplay their gender, Smith touts her mothering role as an asset to her business. “This is all about being a real mom in the trenches who needed a bag” that was fashionable and functional, she said. Mrs. Smith’s Bags convert from shoulder bag to backpack for hands-free carrying. Besides the organizer drawer at the bottom, they come with a key hook, padded sunglasses case and washable full-size changing pad.
Smith was a stay-at-home mother when she started her business. “I didn’t plan to have a diaper bag company,” she said. “I planned to make life more enjoyable, so I solved a problem and made a bag.”