The Knockout Lesson
This company owner knew exactly why she didn't want her professional boxing career to take off. The same line of thinking gave her the confidence to temper her company's growth
Over the past 10 years I have struggled with the question of growth. How big should my business grow? How fast? Should I dilute shareholder equity in order to grow? How much debt can I risk? Those questions all came to me during the very public success of my business in its early years. In 1985 I opened the first Amy's Ice Cream, in Austin, Tex. I received an embarrassing amount of local and regional press during the first few years, including being named the Austin Chamber of Commerce's Young Entrepreneur of the Year and the Austin Business Journal's Entrepreneur of the Year.
Many people followed the progress of the business closely. They constantly asked me the same questions. "How many stores do you have now? What are your company's total sales now? Where will you be opening next?" Speedy growth into new locations and new markets seemed the only measure of our success to those people. Their measure had some merit, but I came to believe that growth is wise only when accomplished with an understanding of what makes your business concept competitive and sustainable.
Our success rests not in bottom-line growth but in our ability to meet challenges adequately: our responsiveness to our communities' changing needs, our continued commitment to innovative employee training and motivation, and our commitment to constant improvement in service standards. That progress can occur with or without increasing the number of stores or the sales per store. In theory, of course, success would lead to an increase in those numbers -- but the most important signs of success would still not be visible to the outside observer. That said, I will confess that I have always felt a vague sense of failure if I didn't have a new unit or some grotesque multiple of the previous year's sales to report.
Over time I learned to resolve that quandary -- in large part because of my experiences in a parallel life with little apparent relevance to my business: my boxing career. During the time that I grew a business I also became increasingly immersed in boxing, which I fell into almost as serendipitously as business. Initially, I felt distaste for the sport, which I considered a pugilistic exercise with no true merit. I had participated in sports throughout my life but saw boxing as an exercise driven by a desire to harm and dominate.
That changed when I suffered a running injury and was sent to a boxing gym to exercise as therapy. I trained in boxing for several years, testing my skills along the way by sparring with increasingly difficult opponents, until in 1991 I had the opportunity to compete in the second professional women's tournament in Texas history. Just as in business, I received considerable media attention and support. People soon asked me when my next match would be, whom I would fight, and when I would launch my professional career. But rather than directly responding to supporters' queries, I chose to revisit my motives for getting involved with professional boxing and to evaluate the risks and benefits of continued competition.
I had no difficulty listening to my instincts. The risk was clear. Professional boxing doesn't allow for protective headgear, which is mandatory in amateur boxing, and amateur boxing at that time wasn't open to women. And so despite the support I received, I chose to continue boxing but not to pursue future professional bouts. I participate now with a clear eye toward my motives: physical fitness, the challenge of competition in a controlled sparring situation, and the active promotion of the sport for other young women. In that way I believe I'll reach the greatest success.
The risks of professional boxing were so physical and so immediate that I was able to listen to my gut rather than to supporters' cries for more. I wasn't avoiding a challenge. I was taking measured risks I felt would best lead me toward my idea of success. That was a lesson I needed to apply in my business. If my business grew too quickly, it ran the risk of following the fate of the many other ice-cream stores that had flourished and failed over the past 20 years. The risk to me personally would be that the business might become one I no longer admired or even enjoyed.
In 10 years we have opened nine stores and closed two. Each shop was given a different design, using the talents of varied architects and artists. Although that method of store design is more time-consuming than duplicating a prototype is, I believe it enables the company to respond more appropriately to the special tastes of each market. That strategy also provides an opportunity for constant design evolution and generates continual consumer interest. Each store has experienced consistent sales growth, even during the economic downturn of the late 1980s and the entrance of multiple competitors in the market. All growth has been financed by cash flow or cash-flow-supported debt, leaving shareholder equity undiluted.
There's no right or wrong strategy for growth, but sometimes it's difficult not to respond in the direction that receives the most support. Slow growth with an emphasis on our system design is the strategy that's most consistent with my skills, my motives for being in business, my instinct for what makes the company successful, and my risk comfort level. My experiences with boxing allowed me to see clearly that it is only you who will be hurt if, contrary to your own best judgment, you follow the crowd. I'm extremely satisfied with and proud of the progress of my business today, and I believe all stakeholders (shareholders, customers, and employees) have been well served. I think of it as the George Foreman approach to business: pick your battles, be true to your beliefs, and win in the long run.* * *
Amy Miller is the CEO of Amy's Ice Cream, a $2-million company based in Austin, Tex.