Over the past few years, Tenita Strand, Founder of Status Co. Leather Studio, has established her business as a leading merchant of handcrafted artisan leather goods in Alabama.
The business, which was named the 2022 Emerging Business Award Winner at the U.S. Chamber of Commerce's Dream Big Awards, found success within months of its launch into the online retail market in July 2019. By December of that year, the business had earned enough profit to expand into a brick-and-mortar location based in rural Enterprise, Alabama.
Now, the company is a go-to merchant for durable, eco-friendly leather home designs and accessories in the state — and is the future home for merchant storage.
Turning a profit as a new business during the COVID-19 pandemic
Many new businesses have a hard time making a profit, and for many, the COVID-19 pandemic only made that more difficult. However, for Strand, the pandemic was a transformative time that resulted in increased profitability and improved relationships with retailers and manufacturers around the globe.
“[During the pandemic], I wasn't scrambling to get online because my products were already there,” Strand said. “[But] challenges … forced me to upgrade my revenue strategy to include a product or service that was recession-proof."
To do this, Strand shifted her business model to fit the needs of the market at that moment. She observed that many international online leather retailers and manufacturers were losing revenue by giving refunds, but forfeiting their international returns.
“I temporarily accepted the returns of seven global affiliates and provided shipping services that allowed them to resell their undamaged returns to their U.S. customer base,” Strand told CO—. “This fee-based service allowed me to have another tier of revenue for sustainability during the pandemic.”
Not only did this strategy result in extra revenue, but Strand learned where the market demand was and planned her offerings accordingly.
[Read more: Concerned About Your Business's Financial Health? Here Are 6 Methods for Measuring Profitability]
[During the pandemic], I wasn't scrambling to get online because my products were already there. [But] challenges … forced me to upgrade my revenue strategy to include a product or service that was recession-proof.
Tenita Strand, Founder, Status Co. Leather Studio
Putting the customer first
While there are other handcrafted leather merchants to compete with, Strand took her business to the next level by finding and catering to an untapped niche within her respective market.
“I have a specialty niche that very few retailers offer locally,” she said. “Many started calling me ‘The Leather Lady’ and the moniker stuck.”
Finding the right niche contributed to Status Co. Leather Studio’s success, as did the opening of its brick-and-mortar location. This has allowed Strand to form strong relationships with customers and the community.
“A brick-and-mortar [location] increases the credibility of my brand to customers, lenders, and investors. I can deliver a powerful brand experience where customers can talk in person to gain knowledge about the brand,” Strand said. “Customers are likely to spend more after getting high-quality service and sampling the product in-hand before purchase.”
While the brick-and-mortar location provides a great opportunity for local customers to authenticate the quality of the leather before purchase, it also benefits Strand’s online customers.
“Online customers like the reassurance of purchasing from a credible brick-and-mortar retailer with [a] local presence,” she said.
[Read more: Beyond the Bottom Line: Why Putting People First Matters]
Diversifying your revenue streams to increase profitability
Despite the fluctuating market conditions, Strand has been able to grow her business over the last few years, increasing revenue and building a loyal customer base. She believes that with the right diversification of income streams, other businesses can do the same.
“Create a growth plan to have a minimum of four ways that your business earns income,” Strand suggested. “Sell a physical product, offer a service, create passive income inside the business, and own real estate.”
As for debts, Strand recommends looking at them as an aid, not a roadblock.
“Re-envision your concept of debt,” she said. “When used correctly, debt is the result of using a tool — funding — that enables your business to grow. Have a clear plan to leverage borrowed funds into more income.”
[Read more: Startups Turn to Venture Debt to Turbocharge Growth]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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