In 1996, Michael and Ramona Woods decided to turn their mutual experience in the salon-servicing industry into an opportunity to become business owners. They launched Ashtae Products, which sells multicultural hair products to professional salons and beauty schools.
Unlike many other newcomers to the world of business management, the couple had no problem attracting customers. Thanks to their previous experience, Michael and Ramona doubled Ashtae’s sales each of the company’s first three years. The problem was that the couple had little profit to show for their efforts. “We failed to realize that knowing how to sell and make money doesn’t mean you know how to keep it,” Michael recalls.
Michael and Ramona have been able to augment their sales know-how with sound business planning and management. Ashtae has moved to its own location in Greensboro, added staff members and increased its market share—despite the nationwide economic slowdown of the past two years. More importantly, the company’s financial picture is very strong, rewarding Michael and Ramona with a healthy profit. The couple can now focus comfortably on building an aggressive long-term strategy for Ashtae, and their own future as entrepreneurs.
Michael and Ramona continue to have regular meeting with Eric and other counselors at SCORE. “Their greatest asset is the ability to help a company understand the business cycle, and to plan for the various stages of growth,” Michael says. “Eric and SCORE opened our eyes to the real deal about running a business instead of the business running you. If we had never met them, we’d probably be unprofitable—and out of business.”
Michael and Ramona made an appointment with SCORE volunteer mentor Eric Indermaur, a CPA and former corporate vice president of finance. A review of the company’s financial and accounting data helped Eric pinpoint Ashtae’s problem: The company was growing too fast. Its inventory supply chain was out of sync with the normal ebbs and flows of the business cycle.
Eric helped Michael and Ramona better understand where Ashtae’s money was going, how to scrutinize the financial data and how to calculate sustainable profit margins. He also helped them secure a loan from the Greensboro Venture Capital Fund to provide a stable source of funds to finance inventory growth and turnover.