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Roxanne Quimby

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Cli:ipter'3 Tlie EntreprenerrrialProcess

i19

Cnse

Roxqnne Ouimby
Prepwolion Oueslions
I.
2.

Who cqn be cn entrepreneur?
Whst ore ihe risks, rewqrds, qnd trode.effr of o lifestyle business versus o high-pofentiol businessone thqt will exceed $5 million in soles cnd grow

Mqine in ihe lirst ploce. lf rhe moved Buri's Beet: bock, she would face ihe some problems ihat inspired this raove. ln Moine, Buri's Bees would probobly never grow over $3 million in soles, ond Quimby feh it hod potentiol for much more.

substonfiolly?

Whoi is ihe difference between an ideo ond on opportunify? For whom? Whot con be leqrned from Exhibits C ond D?

Roxunne Ouimby

4

Why hos fte compony succeeded so fqr?

The Blcck Sheep

5

Whqt should Roxonne snd Burt do, ond why?

"l wos o real blqck sheep in my fomily," Quimby soid.

gool fcr the first year vws $ /0,000 in totol sales. / fgured i{ / cou/d tctke hcne holf o{ tho; it would be more money f/tan /C ever seen.
Our

Roxonne Quimby

She hed one sisier who worked for AMEX ond another sister who worked for Chsrles Schwqb, ond her {qther worked for Merrill Lynch. She was not interesbd in business ol oll, though, qnd considered it dull. Quimby aftended ihe Ssn Froncisco Art lnstitute in the fate l96Os
"
ond "got rodicslized out there," she exploined. "t stud"

ied, oil poinled, ond groduoled without cny iob

Roxqnne Quimby sct in fhe president's office of Burf's
Bees' newly relocobd mcnufocturing facility in Roleigh.

North Cqrolino. $he wqs surrounded by unpocked boxes ond silence from the unrnoving mochines wiih no one there lo operole them. Guimby looked oround ond osked herself, "Why dtd I do this?" She felt lonely ond missed Msine, Burt's Bees' previous home. Quimby hod founded snd built Buri's

Bees,

o

rnqnufscturer of

beeswsx-bqsed personol core preducts ond hsndmqde

crafts, in centrql Moine ond wos nof convinced

she

shouldn't move if bqck there. She exploined,

When we got to Norlh Cqrolino. we were totolly olono. I reolized how much of the business existed in the minds of the Mqine employees. There, everyone hod their msrk on lhe process. Thoi was qll lost when we lefi Moine in 1994: I iust kept-ihinking, "Why did I move Burf's Bees?" lthought lwould pick the compony up ond move ii ond everything would be lhe some.
Noihing wqs lhe some excepi thot I wos still working
2O-hour doys,

Guimby hod profound doubts sbout this move to
North Carolino qnd wqs seriously considering moving bock to Moine. She needed io moke s decision quickly becouse Burt's Bees wcs in ihe process of hiring new ernployees ond purchosing s greqt deol of monufcciuring equipment. lf she'pulled out ncw, losses could be minimized ond she could hire bqck eoch of the 44 em. ployees she had left bock in Moine, since none of them hod found new iobs yei. On the other hqnd, it would be hord to ignore olt the recsons she hod decided fo leove

prospects. I bosicolly dropped out of life. I moved to
.l00
centrol Msine where lond wss reolly cheop*$ crn ocre*qnd I could live removed from society.'l
Personsl politics wosn't the only thing thot pushed

Quimby below the poverty line. While she wqs in college, Roxqnne's fqther discovered she wos living with her boyfriend ond disowned heq severing all finsnciol ond fqmiliql fies. Her fafher, o Horvord Business
School groduote snd foiled entrepreneur, dld give her one gift*on eorly enlrepreneurisl educotion. Al the oge of 5, Roxonne Quimby's foiher told her he wouldn't give her o cenl for college bui would motch every dollqr she eorned herself. By her high school groduation Quimby hcd bonked $5,000 by working on her fother's numerous entr€preneuriol proiects ond selling her qwn handmode crofts.

ln 1975 Quimby ond her boyfriend mcrried,snd moved to Guilford, Moine*qn hour ncrihwest of Bqngor. They bought 30 ocres of lond st $'l 00 on scre and built o iwo-room house with no electricity, running

woier, or phone. ln 1977 Guimby hod twins, qnd her lifestyle become o burden. She woshed diopers in pots of boiling wdter on q wood-burning stove ond struggled constcnlly to moke ends meef wifh minimum woge iobs. Her morricge broke oporf when the twins were
4. Quimby pccked up everything she owned on o foboggan ond pulled the lood qcross the snow fo o friend's house.
The moneymoLing skills her fsther forced her to develop allowed Quimby to survive. She qnd her children
O Copyright.]effry A. Tlmmons, 1997. This.rse wos wilien by Rebeccr:
Voorheis, under the dtr*ction oljeflrv A- Timmons, Fronklin W. Olin Dis tinguished Prcfessor ol Entrepreneurship, Bobson Coflege. Furding pro vided by the Erving Morion Kosffmon Foundotion. All righls reserved.

Part

II

The Oppoltrrnit_r

lived in q smoll fent, ond Quimby made qlmost $ 150 q
'weekrby working 'locol fleo morkets-buying low ond selling high. She olss held iobs woitressing. Quimby deseribed, "l olwoys felt I hod qn entrepreneuriol spirit.
Even qs o woitress I felt enirepreneuriol becquse I hod coniro[. f couldn't slond il when ofier people controlled my destin or performonce- Other lobs didn't inspire me to,do my besf, but woihessing did becouse I wss qccountqble io myself. Eventuolly I got fired from fhese iobs beccuse,l didn'l hesitqte to tell the owners whot I thought l'hod o bit of qn ottitude-"
,l984
ln
Quimby begon fo question her lifestyle ond reolized *he, hqd tq moke a chonge. She explained, "l decided I hod to moke o reol income. I stqrted to feel rhe responsib,ilifr of hoving kids. I hqd waitressing jobs bur there were only three restouronts in lown ond I hod been fired frorn oll firee. That's when I hooked up wiih Burt."

sculpted condles to o crofis fqir si o locol high school ond brought home $200, She remembers, "l hod never held thoi much money in my hond." Burt's Bees wqs born.
Quimby qnd Shovitz pooled $400 from their sovings to lqunch o honeyand beeswqx business. They purchosed some household kitchen opplionces for mixing, pouring, ond dipping. A friend rented ihem qn qbondoned oneroom schoolhouse ririith no heol, running woter, windows,

or etectricity for $l5O o yeor-the cosi of ihe fire insurance. Neilher of them hod o phene, so they convinced the locol heolth food siore to toke messoges for Burt's Bees.
Quimby troveled fo foir ofter fsir oround the region, sleepins in the'bock o{ o pickup truck ond moking o few hundred dollors o dcy. She set whot seemed like on impossible gool for ihe first yeor's scles*$'10,000. Thot yeor,
I 987, Burt's Bees mode $8'1 ,000 in sqles.

A Kindred Spirit

Burl's Beeg' furly Sucrers

Like Roxonne Quimby, Burt Shavitz hsd olso dropped

Burf's Bees' big breok cqme in lg89 ot o wholessle show in Springfield, Mossschusetts. fhe owner of on upscole boutique in Monhottsn bought o teddy beqr condle qnd pui it in the window of his store. The candle wos o hif, ond the boutigue owner borroged the heolth food store with messcge$ osking for new shiprnents. Quimby begon hiring employees to help with production ond ex" ponded the product line to include other hqndmode crofts qnd beeswdx-bosed products like lip bolm. ln
1993 Burt's Bees hsd 44 employees.

out of life in the ecrly 197As. A New York notive ond ex-

phqtogropher for lrfe qnd New Yor[ mogozines,
Shovitz lived in on 8'by I'house {previously o lurkey coop| on q 20-ocre farm in Dexter, Moine, which he purchosed in 1973. Shovitz, c beekeeper wiih 30 hives, sold honey off the bock of his truck during hunting seqson. He eorned moybe $3,000 q yeor, which wqs excctly enough to poy property toxes ond buy gos for his pickup truck.
When Roxqnne first sqw 8url, whom she described os o "good-lacker," she knew she hod to meet him. ln an qrticle in tear's magczine Quimby soid, "l pretended lwqs interested in the bees, but I was reolly in, ierested in Burl. Here wos ihis lone beekeeper. I wonfed fo fix him, to tome the wild mon."r When Quimby ond
Shqvilz mef in I gB4, the bond was immediote. Quimby tolked sbout Shovitz's role qt Buri's Bees:
I convinced Burt into ihis enterprise. He hos olways believed in my vision, bui unlike me he's ernotionclly deioched ond uninvolved. Therefore, he hos some greot

ideqs qnd'is rhore likely to toke risks. He's my moin sounding boor.d snd giver me c lot of morol ond psychologicol support. I never could have done this without him. ln all this iime, there's never been o conflict behueen us. The chemisiry hos olwoys been.ihere. We're iust really on the some wcvelenglh. We've been through o loi together thot would hove broken other relationships. l've olwoys been the motivoior ond the rone in, volved in doy-to.doy operolions. but very rorely does he disogree with me. He's kind of my guru. ln the beginning of their fost friendship, Bu* taughi Rox-

onne qboul beekeeping qnd Roxonne discovered Burfs lorge stockpile of beqswox. Quimby suggested rnoking cqndles with tlre beeswox. She took her hond-dipped ond

'l.

Eenth,rrn, ''Enterprise," lecr's, Morch 1994,

pp.2O-21.

Quimby exploined her tronsformqtion into o busine$spersOn:

After o while, I reolized I iust liked ir. I liked buying ond selling things well, odding volue. I hod no security issues becouse l'd been living ot the boitom for so mony yecrs.
I knew if worse come to worse ond the business foiled, I could survive. I'd seen the worsl ond knew l coufd hcndle ii. t'd never been tropped by the need for securiiy or o regulor poycheck. I loved the freedom of storiing o business, of nat knowing how it would turn out. li wos this big experiment qnd whether ii succeeded or fciled totolly depended on me, I reolized the goal wos not lhe mosl interesting pcrt; the problems along fie woy were.
I found business wos the most incredibly liberoting thing.
I never would hove thought thqt before. The only rule is thof you hsve to mcke o little bit more thqn you spend.
As long os you con do thot, onything else you do is OK.
There ore no other opportuniiies fiat heve os few rules.

Noi only did Roxanne Quimby hove a possion for business, but she also hod a folent. Since the beginning

of Burt's Bees in l?87, the compony hod never once dipped into the red, it hod olwuys turned o profit, ond its profits hod olwoys increosed {see Exhibit A}. A number of lorge notionql rehilers sfocked Burfs Bees'producis including L.L. Beon, Mocy's, and Whole Foods
Morket Compony. By 1993 Burt's Bees hod soles representqtives qcross fhe country and sold its producfs in

Chrrpiel

3

The Entrepreneuritrl Proccss

.

High lransport cosfs; "Our lrcnsport co$is were ridiculously high,' soid Guimby. Becouse of its vcsi distsnce from ony meiropoliton oreas, shipping producfs to distuibutors ond receiving mqfericls were sstronomicofly expensive: Burt's Bees wcs clmost alwoys the lcst slop'on fruckers' routei.

2.

High payroll loxes; Burf's Bees wss being tcxed qbout 10 percenl of ifs poyroll by *e slofe of
Mqine. Poyroll toxes were so high becouse unemploymeni in Msine hovered qround ?O percent.
Lack of experfise: ln 1993 Buri's Bees hqd 44 e,mployees who were all 1'weJfare morns,'l Quimby said, "They brought o set ofhonds ond o good qititude to work, but no skills." Everything wos mode by hond, Burt's Bees' rnost populor product lip bolm, wqs mixed with o household e'le*der,

I

EXHISIT A

Burl'r Bees 3nles, 1987-1993
9ales

Yeor
987

$81,000
$137,779

?BB

989
990

$

180,000

$500,000
$1,500,000
$2,500,000
$3,000.000

991

992
?93

3.

:very sioie. By oll occounts, Burt's Bees' producfs were

r

succes$.

Quimby exploined their oppecl:

fhen poured from teopots, into metol tins. 'When we received c shipment of conlsiners or lqbels, we hod to breqk down the pollets inside the tr{rck becouse no one'knew hsw to opercte o forklift. '
Everything wqr inefficient snd',cosfly" There ' weren'l ony people with expertise:in Mcine."
Quimby exploined' for o while, Suimby cggressively recruited monagers from oround New
Englond. When fhey come'up to Guilford to inierview cnd reolized how isolsied the fown'wss, , though, they would lurn down cny offer Gu'imby '

We sell reolly well in urbon oreos. People in urbcn oreos need us more becquse fhey con't step outthe froni daor ond get freshness or simplicity- Our producfs oren'f sophisticoted or sleek. They're down-home ond bosic.
Everyone hqs on unconscious desire for more simplicity ond our products speok 1o thoi needThe company wos noi only profitoble, it wos ioiclly
:ebi-free. Buri's Bees hod never token oui o loqn.
Suimby didn'i even hove a credii cqrd. When she op
:lied for one in 1993, by then c millionoire, she hod to
:et her sister io cosign beccuse she hqd no credit his':ry. She wos strongly overse to going into debt.

3uimby exploined,

121

made,

Roxonne Quirnby moved the compsny to free"Burfis
Bees from there constroints ond liberqte il to grow.,Since

feel like I con't wclk owoy from it this ofternoon. That's importont lo me. A monthly poyment would trcp me inlo hcving to exploin my octions. I love being on the edge

beginning opercfions in l9BT, Surtk Bees hcd:struggled to keep up with demond. tluimby hqd'no time to focus'on broad monogement irsues becouse she spent mosl of her iime pourlng beeswox olong with the sther
44 employees in order to fill dirtributors' unceosing or-

wiih no predictobility. no one to repori io. Anywoy,

ders. She exploined.

l've never taken on debt becouse I don't ever wonl io

there wos no woy o bsnk would hove given me the money to stort Burt's Bees. I could lust see myself with some bsnker trying to exploin, "l've never hod o iob or onything but could yau give me some money becouserl have this ideo oboui beeswqx."

Quimby wqs so debtqverse qnd cosh-owore, she re:used to sell producfs lo ony retciler thot didn't poy its bill
.azithin the required 3O doys. This meont turning down or'

ders from retoiling powerhouses like L Mognin ond
,l993,
with obout $3 million in sqles,
Deon & Delucq. In the compony wrote off only $2,SOO in uncollecied debts, ln the some yeot,,Burt's Bees hod $800,000 in the bsnk,

ond pretox profits were 35 percent of ssles.

'

The business hod developed o life of its own snd it wss ielling me ii wonted io grow. 8ui il wcs growing beyond

rne, my experlise, my gools, and definitely'beyond
Moine. ll I kept il in northern Moine, I would hove sfunted iis growth. But the business wos rny'child in o woy, ond os its moiher l, wonled ls enable it lo'graw.
The businers provided a gr€at income ond Icould hcve gone on like thct for s while,,But l knew it hsd q lot more potentiol thon $3 million' At ihe same fime, I kn:ew $3 million wss the mssf:l could do'on rny own. lwss working cll of the time qnd there:ffis no one to leon on or delegote to, My lock of formal business troining reolly begcn io bite me. I didnlt,evet know obout poyrcl{ toxes.,Vl/e would get lined fcr- missing tox deodlines we didn't even know existed. r :'

The Move

The Costs of Doing Business in lYlnine
The mqin impeius for the move wss the excessive costs ossociabd with Burt's Bees' locoiion in norlhern Moine:

Why North Carolinc?

,

:

Roxonne Quimby felt she hqd to move the compony owoy from Moine. But to where? She didnl wonlto'live in o big, bustling city, but the new locotion hsd to be

122

Ptrrt

II

The Opportunitr

centrsl. Quimby exploined how she finolly chose North
Corolinq as Burt's Beest new home:
I hcd o mop of the United Stqtes in my oflice with pins where qll of our soles repr were. I used to olwoys look ct ihot mop-when I wos on the phone, doing poper-

work, or just sitting ot my desk*unfil one doy I no, ticed North Corolins. li iusl seemed centrol, well ploced. And, it turned out, o lorge percenioge of the country's populotion lives within {r 'l 2-hour drive ol
North Corolinq. One of my biggest worries obout moving wos telling Burf. I soid lo Burt one doy, "We need to move cnd it looks like North Corolino is the plcce to go." Eurt soid, "OK, Roxy" ond I thought to myself, "Thqnk God Burt is olwoys on my wove-

keep Burt's Bees in the stote. "lf they hod oflered us hslf the deol North Corolinq dld," Quimby soid, "l would

hsve iaken it." The Moine Deportment of Commerce ssked Roxonne to coll back in o couple of months becouse the person in charge of business recruiling wos out on mcterniiy lecve. Quimby morveled, "We were the second lorgest employer in $e town cnd they didn't respond to us ol oll. We finolly heord from the governor of Maine when he reod on orticle obout us in Forbes3 lhol mentioned we were leoving fie stqie. By then iiwos loo lote. The move wos only o few doys owoy ond we hod olreody signed o leose on ihe new monufccturing fccility." length."
Buri got on the phone with o representotive qt fie
Norih Csrolino Deporfmenf af Commerce and told him about Burt's Bees. Burt snd Roxsnne were pleasontly surprised to leqrn Norih Corolins wqs exlremely oggressive obout recruiting new compqnies to ihe stqte qnd was eqger to qtiracl Burt's Bees* even ftough it wos quite o bit smsller thon other componies locoting in $e
"Triongle."z The No*h Corolins Deportmeni o1 Com, rnerce sent Burf's Bees o softwqre progrom thot Quimby used to plug in finsnciol information ond colculste the esiimsted tqxes Burt's Bees would poy in North Corolina. The estimqted loxes were significcntly less $on those they were poying in Mqine.
Perhops rnore compelling, though, wos the lorge sup-

ply of skilled lobor in North Corolinq. lf Burt's

Bees

moved, it would be cble to hire cn ex-Revlon plont engineer to estqbtish ond operqfe its monulocluring processes- Quimby qlso hod q leod on c morketing

msnoger in North Csrolino wilh experience sl Loncorn6, Vogue, ond Vicloriq's Secret's personcl core products division,

As

s

next step, fhe Norfh Cqrolina Deportrnefi of
Commerce invited Roxonne qnd Burt to visit North
Csrolino for o three-dqy tour of the Trlongle creo ond ovqiloble monufscluring focilities. "You should have seen fhe look on ihe represenfciive's foce when he picked,us up from lhe oirporf," Quimby loughed. "Burt hos this deep, gruff voice, so he must hsve sounded very different on ihe phone thqn he looks. Burt is 62, hcs crozy white hair to his shoulders ond o long white besrd, is reclly toll, ond pretty much looks like he iust wolked out of fie woods of Msine." She continued fo soy, "The representotive recovered reolly well, though, qnd took us oround the whole oreo for three dsvs. He showed u$ tons of plonts ond real estqfe, He *oi* u, o great offer ond we were impressed."
When they got bock to Mqine, Quimby colled the
Moine Deportment of Commerce lo give it o chonce to
2

The "Triongle" oreo in Norfh Corolino includes Chcpel Hil1, Roletgh, cnd Durhom ond is ihe home of Resecrch Triongle Pcrh, o lcroe

high-iech business pcrL similcr
Route

,}28

in Mossochusdfs.

b

Silicon Volley in Colilornia

Trimming

*e

Azalea Burh: The lconomirs of the llllove

Rexonne Quimby likened Burt's Bees' move to transplonting on ozolec bush in full bloom. She soid, "l reolized I had to trim ond prune rodicolly to ollow it fo survive." ln
Moine, Burl's Bees biggest resource wos cheop lqbor* people on fie prodlciion line were poid $5 cn hour.
Therefore, most of Burt's Bees products were very loborintenslve ond production was totolly unqutomoted. All of its producls, from birdhouses to csndles io boby clothes,

were hondmode-

ln North Corolino, though, the compony's biggest resource wqs skilled lqbor. Bui skilled lobor is expensive, ond Burt's Bees wouldn't be qble to keep mcking

its lcbor-intensive hondmode items. Quimby would hqve fo sutomfiie everything ond chonge Burt's Bees' whole product line to focus on skin care products {see lxhibit B for indusfry employmenf sfotistics). She ex-

ploined, "Our produch in Moine were totally unreloted production-wise, but they were relqfed in ihe sense thoi eoch product communicqted down,home volues qnd simplic*y. ln North Corolino, though, we would hove io get rid of oll the hondmode products, ond thqt wos preity much everything. We hsd to oulomote." When Quimby orrived in North Cqrolina she sqt down lo evoluqfe the producl line ond decided io focus on skin core {for generol industry stofistics, see Exhibits
C cnd D|. Skin ccre products require only blending ond filling, which ir very stroighdorword, ond mcchinery con do olm*si everything. "To iustify the move to North
Corolino from c cost qnd monufocluring perspective, we would hqve to moke more 'goop,"'Quimby stoted.
"l {ooked ot my list of prospective new products, ond there wosn't onything on the list thqt we mqde in 1988,"

Quimby plonned on reloining Burt's Bees environmentol eihic by excluding ony chernicol preservclives

ond using primorily oll.noturol ingredienis in its

skin

tr
'' D. W. Linder, 'Deor Dod.' Forbes, December

6, 1993,

pp. ?B-99.

Chapter

Et0ilBlT

3

The Entrepreneurial Process

I

Occupationr Employed hy Stondord Industriql Clnssificglion
{5lC} 284; Soap, Cleoners, nnd Toilet Goods

:

*6 Chonge

lnduotry ta 2OO5
Totql, 1994 ' tProiecledl

?o

Occupnrion

of

Pockoging & filling mochine operotorg
Hond pockers & pockogers
Assemblers, {qbricclors, & hond workers
Soles & relaled workers
Freight. stock & msteriol movers, hand
Secretories, executive, legol & medicol

8.5
6.3

-30.1
"20.1

5.7

4C

16.5
16.5

3.6

-6.8

3-5

6.0

Chemicol equipmenl eontrollers, operotors lndushiol mochinery'nechonics

3.O

4.,8

2.7
2.6
2.6

28. I

2.5
2.5

28-:l,

Mochine gperctors lndustriol truck & troctor operstors
Chemisfs

Crushing

& mixing

mochine operoiors

Generol moncgers & top execuiives
Traffic, shipping, & receiving clerks
Mcrkefing. odvertising, & PR monogers

2,6
16.5

16.4 r 0.5

2.5
2.2

12,1

2.4

r

6.5

'16.5

& mqthemqtics technicir:ns

1.8

Bookkeeping, cccounting, & ouditing clerks

1.8

Moinienonce repoirers, generot utiliiy lnspeclors, testers & groders, precision

1.7

4.8

1.6

16.5

Science

Genergl office clerks
Order clerks, motericls, merchondise & service

16.5

'1.6

-.7

1.5

13.9

Mochine feeders & offbesrers

t.5

4:8

Clericol supervisors & monogers

'1.5

19.1

Professionol workers

1.4

39:7

lnduslriql production msnogers

1.4

'16,4

Stock clerks

1.4

-5.3

Monogers & odministrotors

1.3

16.4

Adjustmenf clerks

1.2

398

Accountqnis

1.2

& oudiiors

Monogemenl support workerr
Engineering, mothemoticol,
Truck drivers, light

& seience msnogers

& heovy

16.5

l:l

16.4

1,1

32.2

1.0

2S. I

source: Mqnvfcciuring USA; lndustry Analyses, StcJrstics, ord leoding conpanies,.5th ed., vol. 1, ed. A. J.,Dornoy, Gqle Reseorch lnc' {1996}' p. 837-

cqre produ€ts. Still. though, Burt's Bees would hqve to become on entirely new compony cnd abandon the praduct line responsible for ihe compony'l early suc€e5$. Not only would the product line hove to be overhauled, but Roxsnne realized she qnd Burl couldn'f remsin the sole owners of *e compony if she wonted it io grow Since the inception of Burt's Bees. Roxonne ond Burt held 7O percent ond 30 percent of its slock,

rerpectively. The truly tslen,fed employees tluimby hoped to otirocf would wont rhored owner:hip of the cornpilny irnd would be highly motivafed by stock,rewqrds. Quimby knew shoring owneruhip would meon feeling occouniqble to others ond hoving to iusfify'her sometimes unorfhodox decisions, Accountobility wos

exoctfy whot she hod foughi so hord to ovoid her whole life, ond Quimby's outonomy wos portty o couse of her succers.

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