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La Cage Au Folles

By Bruce Freeman

Carol Frank of Dallas, TX is the entrepreneur behind Avian Adventures, a company specializing in large, high quality bird cages, which are a lot more sophisticated than you might realize. After all, if you treat her right, Polly may still want a cracker at age 80! Carol’s avian adventures actually started after she received her CPA license and a master’s degree from SMU in 1987. She took an entrepreneurship class which required a new business plan for a pet shop. An animal lover her whole life, Ms Frank was already working with the ASPCA, and was a volunteer and board member at the zoo, so the pet shop was an exciting assignment for her. Carol envisioned a better shopping experience for pet lovers than the dark, dingy stores of the past and “The Animal Kingdom” as her first store was named, became that reality.

Two years later, she realized that she was falling in love with birds specifically and parrots, in particular, and decided to specialize. She began to expand her product line and soon bird food and product manufacturers began to ask her to distribute their lines. Carol decided to sell The Animal Kingdom and open Avian Kingdom Supply, a business devoted to distributing products for birds. Avian Kingdom kept her busy for eight years and by the time she sold it in 1998; she had a 20,000 square foot warehouse and was selling $2 million annually.

Avian Adventures began in 1996 when Ms. Frank was looking around for a high-quality line of designer birdcages to add to her line at Avian Kingdom. She couldn’t find anything that she liked so she decided to hire a designer and have her own line manufactured in Mexico. Her first shipment was delivered in February of ‘96 and she just couldn’t keep them in stock. Avian Adventures exploded and soon she was selling 1000 cages a month and continuing to grow. This is the point in the story where the suspenseful music comes up and you just know something is going to happen. Suddenly, sales began to flat line and then, decline.

It didn’t take long for Carol to discover that the Mexican manufacturer she had such a good handshake relationship with was now selling her birdcage line to a very large competitor. Meetings with attorneys confirmed that she couldn’t get a patent since the product had already been on the market for over a year, but she was able to copyright her design. Since she had only one supplier, she tried, unsuccessfully, to find other suppliers who could make cages to her specifications. A series of disheartening experiences with other manufacturers culminated in a sales drop from $2 million to $300,000 annually, but Carol found a tiny sliver of a silver lining. US Customs has intellectual property protection and based on her original copyright she was able to get the competitor’s shipments stopped at the border. Naturally, this did not please the competitor and two months later they sued her for fraud, based on the perjury of the Mexican manufacturer. Again, she was back to the attorneys, when one asked her to check her business liability insurance policy. Fortunately, she was partially covered, and with the insurance company reluctantly by her side, she defended her company, countersued, and won a favorable settlement. This allowed her to move her manufacturing contracts to China, and applying the lesson she learned about assuring supply, she made arrangements with a second manufacturer in Malaysia. Finally, sales began to recover and have now tripled in each of the last two years.

Professor Bruce’s Words of Wisdom

Carol Frank did not realize how apt the name Avian Adventures truly was! She learned some very valuable lessons along the way and has even written a book, Do as I Say, Not As I Did:  Gaining Wisdom in Business Through the Mistakes of Highly Successful People, to be published this Spring, which chronicles her experience and those of other successful entrepreneurs. The importance of protecting yourself with patents, business insurance, and tightly written contracts cannot be emphasized enough, but more than that, Carol’s situation highlights the inner strength that is required to carry a business through the hard times. Once threatened, Carol Frank found the passion and the fortitude to make it through some crazy situations – something all small business people need.

Case History:  [EXTERNAL]

Entrepreneur’s Strategy: Making mistakes cannot be avoided. Learning from them is what separates winners from losers.

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