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Cover Story: Who Wants to Buy a Hug?

P&G executive finds that becoming an entrepreneur can be a bear

By Doug Trapp · January 4th, 2006 · Cover Story
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  Candy Federl says she still gets scared every day as she pursues her dream of being an entrepreneur.
Cameron Knight

Candy Federl says she still gets scared every day as she pursues her dream of being an entrepreneur.



More than two months ago Candy Federl took a very calculated leap. To prepare for it, the former Procter & Gamble brand manager asked people visiting her home to hug several stuffed bears, pick their favorite and explain why they liked it best.

She saved money for years. She called on friends, family and contacts from her previous jobs to get good deals on printing mailers, candy, office furniture, photography and other essentials. Then on Nov. 4 Federl leaped into the Hamilton County Business Center in Norwood and began selling hugs.

Federl's Hug Delivery Company uses custom-designed stuffed bears named Hugsby to deliver these hugs with assortments of jelly beans, chocolate covered cherries, toffee almonds and other candy. Customers can call or order online.

It's an "emotionally available gift," says Federl, 49, a mother of four teenagers. "This is the part I'm passionate about."

Online shoppers will find Hugsby's life story on his Web site (thehugdeliveryco.com). Hugsby even has his own blog. Federl had Hugsby custom-made with long limbs, soft fur, a squeezable body and beanbags in its bum to allow him to sit up.

Hugsby HQ
One Saturday in December, Federl offers a tour of her office. She has a lot of space for a startup at the business center -- two large rooms on the second floor. Gourmet candy samples sit on the filing cabinet in lidded bowls. Emily Weddle, one of Federl's two employees, takes phone orders in a front-room cubicle, although most orders arrive online.

Before I can ask a question, Federl has shown me the back room where orders are filled, explained how her company got where it is today and enlisted me in her non-stop product testing: I accept a hug from Hugsby.

Federl is ready for the hoped-for Christmas rush. In the back room, dozens of open boxes line a table. Each box holds a gift bag containing a Hugsby ready to deliver a hug with some candy. Nothing is out of place.

On another table sits the computer, scale and printer UPS helped set up so she can process her orders. Federl needs only about five minutes to prepare a new order for shipping.

Two things can kill Hugsby: running out of money or running out of persistence. For Federl, money is much more expensive than persistence. She works about nine hours a day almost every day.

"I do have some days when I'm here saying, 'What am I doing up here and how am I going to get down?' " she says.

Federl toyed with other ideas for businesses before committing to Hugsby a year ago. Then she spent several months writing her business plan and working with Galerie, a candy and gift wholesaler in Hebron, to have Hugsby made.

Federl consulted for Galerie for 13 years, beginning when the company was a start-up with a few employees and ending when the company had $70 million in sales and at least 120 employees. She began setting up her office at the business center in mid-August.

Federl's Web site went live at 6 p.m. Nov. 4. Her first customers were friends and family, but it wasn't long before a stranger called from Pennsylvania. A woman in a hospice for cancer wanted to buy a Hugsby for her caregiver. After she hung up, the caregiver called to order a bear for the woman.

Federl has about 18 months to make Hug Delivery Co. profitable. If not, her money will run out. As of my visit, the company's best day had about one-third of the orders she needs to average.

More positively, her orders had already come from more than 35 states, thanks in part to her direct-mail marketing. She's already preparing to expand her product line for Valentine's Day. Chocolate roses would seem to go well with a Hugsby.

The Vermont Teddy Bear Co. does $30 million a year in sales. Federl believes she has built an even better bear than theirs, although she doesn't say it out loud. She thinks she's done necessary homework to make the Hug Delivery Co. a success.

"I don't do it foolishly," she says. "I've thought and thought to the point where it's not risky."

Rejecting the status quo
Many people believe that most -- or nearly all -- new businesses fail within the first few years. In fact, half of new businesses remain open after four years, 17 percent close as successful (including those that were sold) and 33 percent close as failures, according to a 2002 U.S. Small Business Administration study.

That statistic isn't much comfort to someone who could have a perfectly good job with flexible hours.

"Doing this, I get scared every day," Federl says.

But she's not easily intimidated. She used to have a pilot's license that allowed her to fly by her instruments only. She owned a four-seat Beechcraft Sundowner that she flew to the Bahamas, where she could scuba dive, her other pastime.

Federl also launched Liquid Tide during her 10-year career at Procter & Gamble. She remembers feeling a little awkward there at first, a Denison University alumna among lots of Ivy League grads.

Federl is married to Thomas Federl, her second husband, director of sales for the Western & Southern Tennis Masters Event. She has four children from her first marriage, ages 18, 15 and 13-year-old twins. With her kids growing up, now was the time for her to make her move.

Some might think entrepreneurs are out to get rich quick and eventually have their own Lear jet, she says. Money's nice, but "I wanted a new challenge. I wanted to test myself," Federl says. "I wanted to use what I had learned."

She learned how to market at P&G and the Newport Aquarium and how to grow a business while consulting for Galerie.

Even if Hugsby doesn't work out, Federl says the skills she learned by starting this business will help her with future jobs. Before her startup, she didn't know anything about selling on the Web or running a fulfillment center.

She's also mature enough to see the bigger picture of her life.

"When you're younger, failure feels like it will be the end of you," she says. "I think I used to be afraid of failure."

By Federl's age, failing doesn't mean you're a failure. It means things didn't work out but that you've learned something. She's seen enough to know that few things are truly catastrophic.

People who leave secure jobs might seem a bit crazy, Federl says, but they want to see if their ideas can work. They want to be their own boss or be challenged or create something. Security isn't enough sometimes.

"They're not willing to live with the status quo," she says. ©

 
 
 
 

 

 
 
 
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