Can't We Have Another?

When to launch a second brand. Plus: The ins and outs of outsourcing.

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Our apparel business is considering launching a new product line in the same collegiate outerwear realm as our current brand but as a separate division. Managers are debating whether to create the new division now or wait until we have increased customer awareness of our original business, which has grown consistently for 10 years. Is it too risky to allocate resources to a second brand?

Barry Lipsett
Charles River Apparel, Medford, Mass.

In the decision to start a second brand -- as in the decision to have a second child -- resources are not necessarily the most important issue. In both cases you've already got a lot of the necessary stuff. Companies that sport multiple brands on the outside may operate a single back office on the inside, and scale, as you've probably heard, has a habit of producing economies. Yes, you'll have to hire. But you may not have to hire much.

First, says Robert Brunner, CEO of Pentagram Design, a specialist in brand development, consider how the new brand is likely to contribute to your customers' experience and whether it communicates your company's core values: "Many companies get ahead of themselves by focusing more on operations and less on what they are selling."

What matters most, of course, is whether the new entity will be welcomed into the world. Finding entirely new customers is the best bet; existing customers will only embrace the upstart if it offers something that differs significantly from what you sell now. Ultimately, says Irene Steiner, vice president of marketing for the Vermont Teddy Bear Co., fortune favors the cautious: "Listen to what your customers have to say. Grow conservatively, and don't gamble with what you can't afford to lose."

Our small machine shop has found it cheaper to import some products from overseas than to build them in-house. I am charged with learning all the relevant rules and regulations, establishing contacts overseas, and arranging for freight. Where should I start?

Mike Broxterman
Youngers and Sons Manufacturing Co.
Viola, Kansas

We notice you don't use the "O" word, which is probably wise. Offshore outsourcing presents an opportunity to save money and take sides in one of the political season's ugliest brawls. But you're not asking whether to outsource; you're asking how. For starters, rules and regs are posted on the U.S. Customs and Border Protection website (www.customs.ustreas.gov). The document "Importing to the United States" is particularly helpful. If the prospect of navigating government bureaucracy fails to delight you, consider retaining a customs broker. Those handy folks will file all your documents, arrange inspections, and ease your importing travails in general.

As for the rest, when doing business in Rome (or India or China) do as the Romans (or Indians or Chinese) do. First, choose vendors who have experience working with American companies and check out their work. Then ask those vendors for guidance. "If the manufacturer has shipped to the United States, he can put you in touch with a freight forwarder to discuss shipping rates," says Sam Wiseman, founder of watchmaker Oui Bee Art in Casper, Wyo. The freight forwarder, in turn, can put you in touch with a good customs broker.

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