The Need for a Better Profit Margin

Business Leadership Case Study: Ashtae Products, Inc.

SCORE and MassMutual know how important it is to get good advice. That is why, for SCORE’s 50th anniversary, we are sharing helpful, relevant, and succinct tips for your business success. The tips are based on real-life experiences and successes from people like you.

These case studies are real-life business owners that used the advice from SCORE mentors, applied it to their business, and achieved real, measurable results. 

CRN201601-179497

Don't be Afraid to Fail

 

Ashtae Products, Inc.

Owner
Ramona and Michael Woods​
Location
Greensboro, NC​
Website
www.ashtae.com
SCORE Mentors 
Eric Indermaur 

 

 

 

The Client:

In 1994, Michael and Ramona Woods launched Ashtae Products, which sells multicultural hair products to professional salons and beauty schools. Initially selling products from a barn on their property, they enjoyed rapid growth thanks to their previous experience in the salon industry.

The Challenge:

In 1994, Michael and Ramona Woods launched Ashtae Products, which sells multicultural hair products to professional salons and beauty schools. Initially selling products from a barn on their property, they enjoyed rapid growth thanks to their previous experience in the salon industry.

The Solution:

Indermaur asked the couple questions about their customer turnover rate, their gross profit margin and how long they were storing products. “In answering those questions, we realized we had very thin margins,” Michael recalls. Indermaur helped the couple not only obtain the loan they were seeking, but ultimately improve profitability by setting a minimum profit margin, establishing price lists and renegotiating vendor terms.

“We almost went out of business twice,” Michael says, “but we don’t call it failure—we call it a learning curve. Eric helped us navigate those critical decision-making times. Every entrepreneur needs continual education. SCORE offers that, if you’re willing to listen. We were all ears! We applied the information Eric gave us, and it worked.”

The Results:

Today, Ashtae Products’ line of more than 20 products is sold to professional salons and beauty schools worldwide, and the company hosts an International Hair & Beauty Symposium each year. The Woodses preside over a campus that includes a 47,000-square-foot facility, distribution center, event center and business incubator that’s home to more than 20 minority-owned startup companies. In 2011, the couple launched Black Network Television, the first black-owned television network in North Carolina. “This has the potential to be a $50 million or $60 million business,” says Michael.

As the Woodses learn the ropes of this new industry, they’re once again turning to SCORE. “Eric truly educated and empowered us about the world of business,” Michael says. “He has made a tremendous impact in our lives, and we know he can direct us to the people and places that will help us [continue to] learn.” 

 

 

Mass Mutual is not associated with, and does not endorse, the business featured.​