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Re: The Inside Secrets of "The Pampered Chef"...
> I recently had the privilege of sitting in
> on a lecture featuring the founder and
> chairman of “The Pampered Chef,” Doris
> It was one of the most enlightening talks on
> entrepreneurialism and growing a business
> I’ve ever heard.
> Here are some of the highlights…
> Doris claims she isn’t an entrepreneur in
> the classic sense. She isn’t a risk taker.
> She didn’t know anything about business when
> she started. She isn’t interested in
> starting more businesses.
> Doris was a teacher by trade until she
> married and starting having children. It was
> her wish to be a stay-at-home mom BUT ALSO
> have the ability of earning extra income.
> She was an economics teacher in school who
> also loves to cook. She especially loves
> kitchen “gadgets”. Her kitchen was full of
> them… But unlike other people she knew how
> to use them correctly. Friends visiting her
> house would marvel at her “gadgets” and the
> amount of time they saved Doris in the
> The idea hit Doris…Why not put on home
> parties showing and selling kitchen gadgets?
> She borrowed $3,000 from a life insurance
> policy to start the business, which
> consisted of 71 different products that
> would be carried in six large trunks. By the
> way, this $3,000 is the only money she ever
> borrowed to fund the business.
> She spent a long time putting her first
> Kitchen Show together. Finally the night
> arrived to go out and do it. She remarked
> how it poured that night, literally
> drenching her to the bone. On top of that
> the big trunks she carried her products in
> were too big. They couldn’t be carried
> through the doors. The hand to be pushed
> through awkwardly. While she was doing this
> she thought, “This was the stupidest thing
> I’ve ever done.”
> Needless to say, at this first home party
> she sold $175 worth of products and had four
> more parties scheduled… and “The Pampered
> Chef” was born (as a side note the average
> Kitchen Consultant today sells $525 worth of
> products during an average home party).
> Doris said that she didn’t do surveys or
> marketing studies or even a business plan.
> She just did what she felt was right and
> natural for the business.
> That’s not to say she was doing everything
> herself because her husband was a source of
> support. He helped where he could and didn’t
> complain. He would go out on Saturdays and
> help deliver the products Doris sold during
> the week.
> Doris admits she was scared to death. But
> she knew what she was doing was the right
> Her “business” consisted of 400 square-feet
> in her basement amongst the pipes and bugs.
> This served as her headquarters until 1983.
> Another woman approached her in 1981 to be a
> “Kitchen Consultant” but Doris didn’t feel
> she was prepared for that commitment. Her
> husband pushed her to do it. She did and
> soon had 12 women working as independent
> Kitchen Consultants.
> Doris remarked, “How each consultant brought
> something new to the business.”
> After spending a few years making the
> deliveries on Saturday’s, they struck upon
> the idea of using UPS to deliver the
> products. This allowed the business to
> expand well beyond its home base of Chicago.
> Doris says, “I never imagined people outside
> the mid-west wanting to be consultants”.
> At the 10th anniversary of the company the
> statement was made that it was the goal of
> the company to have 600 consultants…at the
> time they had 300.
> At one point in the 90’s they actually had
> to stop recruiting consultants in order to
> let the business “catch-up”.
> Along the way they hired employees also, but
> these folks are never referred to as
> employees. They are “Co-workers” and
> everyone is on a first name basis.
> Today the “Pampered Chef” has 75,000 Kitchen
> Consultants worldwide. And their main
> building is over 700,000 square-feet in
> Today they have approximately 200 items, 15
> of which are holdovers from the original 71
> Doris took on her first Kitchen Show.
> Today the “Pampered Chef” has annual sales
> of over $700,000,000.
> When it comes to the “Secrets” of her
> success, Doris says, “Look at all the
> business books listed at Amazon, there are
> no secrets.” Her success can be attributed
> to 3 things:
> 1. “Working hard with determination and
> 2. “Have total focus.”
> 3. “Commitment to the highest standards in
> your work.”
> Along the way Doris stuck her thumb in the
> eye of two principles often held with great
> reverence in the entrepreneurial community.
> 1. Multiple Streams of Income-She remarked
> that they had opportunities to take the
> business in different directions at many
> points in time. Such as when they were
> offered the chance to distribute other
> product lines. But she always felt by doing
> this it would take their focus away from
> their core business. Or in the late 90’s
> when they put up a web site, everyone
> thought they would start selling direct to
> the consumer and bypass the Kitchen
> Consultants, which did not and would not
> happen according to Doris. She knows what
> the “Pampered Chef” does well and doesn’t
> deviate from that path. Repeatedly
> throughout the lecture she talked about how
> important focus was in the growing of their
> business. I know from my perspective that
> focus is more of a problem with most
> entrepreneurs and not a lack of finances. I
> use to think multiple streams of income was
> where it was at but over the past few years
> I’ve changed my mind completely on the
> subject. Most people do not have the
> capacity, and not necessarily financial but
> mental and managerial, in order to create
> several successful business units at the
> same time. How often does Multiple Streams
> of Income end up being Multiple Streams of
> 2. Doris never had an “Exit Strategy”. Even
> though she sold the business to Warren
> Buffet in 2002, she insisted (which I’m sure
> he supported fully) that she stay on as the
> head of the company. She said, “I’ll never
> retire” and added, “Why exit something that
> you love doing?” Warren Buffet said he
> shared the same point of view. This one hit
> me hard… “Exit Strategy” is such a
> fundamental belief in the entrepreneurial
> community but if you are doing something you
> love how could you just jettison it and go
> on to something else? And if you can do it,
> how connected to the business could you have
> been in the first place and how much did
> that hamper your ultimate success?
> Incentives still work. The “Pampered Chef”
> uses with great success incentives like
> trips. They started using them in the late
> 1980’s and are still a powerful tool today.
> We’re not so educated or cultured that free
> trips aren’t effective as a sale’s tool.
> Doris had mentors along the way. She allowed
> and welcomed the help of others. Quite often
> today I see small businesses stay “small”
> because the owner thinks they know all the
> answers. Impossible. The fastest way to grow
> a business is using the skills and insights
> possessed by others. What doing everything
> yourself limits is your paycheck.
> When I first received my invite for this
> lecture, the card gave some background
> information on the “Pampered Chef”. I looked
> it over and read the annual sales volume of
> $72,500,000 and thought, “That’s pretty
> impressive”. Yesterday before the lecture I
> was re-reading the card and it suddenly
> occurred to me that I had left out a “0”,
> and the sales were $725,000,000. That is a
> huge figure no matter how you slice it and
> it speaks highly of Doris’ management style.
> Her core beliefs fully supported her core
> competencies. She believes companies go
> wrong when the two no longer support each
> other. Many entrepreneurs I come in contact
> give very little thought to their core
> competencies… not too mention their core
> beliefs. Their entire focus is “making
> money” and they don’t care how they get
> there or what they sacrifice.
> “Hard work is necessary,” according to
> Doris. You can’t fake it. I guess I can’t
> imagine someone sitting around in the
> underwear growing their business to ¾ of a
> billion dollars per year. If I would have
> had the time I would have asked her about
> what she thinks of the folks trying to get
> rich without sacrificing anything. But, I
> already know how she would have answered.
> If you think about this, the concept Doris
> put together is extremely simple. And that
> is why is so darned profitable. Now look at
> Doris did not manufacturer any of the
> products she sold. All she did is show
> people how to use existing high quality
> products more efficiently. This is where she
> created value. Yes the products she sells
> are very good products. Are they the best
> out there? Probably not. But the value is in
> the showing how to use them. This is what
> people pay money for. The high quality of
> the product is just an adjunct. The Kitchen
> Consultants put on a show, they entertain.
> Remember people will spend their last dollar
> to be entertained.
> Are you boo-hooing how your business is
> going or how the economy sucks so badly that
> you can’t start a business? Doris pointed
> out that when she started her business in
> 1980 the prime lending rate was 15% and
> inflation was double digits. Unemployed was
> several points higher than it is right now.
> But people still bought expensive kitchen
> gadgets. Do you still think it’s a bad time
> to start or grow a business?
> Doris knew nothing about sales and
> marketing. She didn’t wait to find the one
> book or audio program to “inspire” her to
> greatness. The only thing she knew was how
> to use kitchen tools better than most and
> had the ability to teach others how to use
> them too.
> I’m sure I’ve missed some other key points
> from the talk, no matter how fast you write
> you can never get everything. But I think I
> got the main points and those main points I
> gladly give you the reader and hopefully
> they make your entrepreneurial life a little
> Take care,
> Mike Winicki
Thanks, Mike, for sharing with us. I'm relieved to hear that I'm not the only one disillusioned with the multiple streams of income thing. I tried the multiple this, that, and everything else...even related ones...and y'know what? When I concentrated on one site, one product, I finally made a bit of money. Best of all, I stopped having to work every day, 18 hours a day...much to my, and my family's, relief.
Very interesting post.
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