How I Built A $20 Million Business From Nothing How I Built A $20 Million Business From Nothing Photo Courtesy of Martha Stewart My journey has taken a very different path from most business people, because I started with nothing, literally. I just knew that when I started EarthKind® with a 99 cent package of garden seeds, and a dream, that I would turn it into something special one day. Now with my company worth over $20M, I can honestly say that I’ve never done things in the “traditional way.” I hoped for a better future, a future where I could make people’s lives a little easier through my inventions, while at the same time protecting the planet and families from dangerous pesticides. I began like many entrepreneurs, especially women —out of necessity. Our family farm was barely making it, and I was fresh out of alternatives. I knew I had to do something, anything, and make it work somehow. Living on the financial edge every day is wearing. All I could think about was when the next (equipment) breakdown was going to be, how we were going to pay for that, and where the money was to pay for sports equipment and school activity fees. Things that many families, especially in rural communities, deal with every day of their lives. So, I began by using what I had. Being a farm wife, I had the availability of clean, organic soil and water. I bought a book on how to make $10,000 cash off your backyard. I sold produce for cash every Saturday morning. I’d keep all the money and continue to reinvest for our growth. The only money I’d take out was what I’d pay my kids for helping me and for the lot fees at the farmers markets. Believe it or not, it was possible to make $10,000 a year from a parcel of idle land, selling the produce, and living off my harvests throughout the year. In case you are wondering, we lived pretty frugally – we didn’t have running water or air conditioning in our farmhouse back then. We lived on $18,500 a year. My kids tell me today they didn’t know we were poor. Farmers call this land rich, and cash poor. I then joined a co-op to grow everlastings on my space. My plan was to turn that $10,000 into $30,000 a year. The co-op failed, and I was stuck with thousands of dollars of dried flowers – with no way to market them in their current form. So, I got creative, and cut them into 1″-2″ pieces, mixed them with North Dakota wild-crafted yucca and bittersweet, added essential oils for aroma, and marketed them as North Dakota potpourri for $12.50 per bag. People living with allergies and chemical sensitivities loved them! I made the rounds with a tank full of gas and attended regional trade shows. Before long I had over 200 stores continually reordering my beautiful blends. Eventually, the other growers, who’d also misplaced their entrepreneurial dream with the same co-op group, sold me their flowers at a discount once they saw my success. I was making $30,000 a year, just over the SBA noted ceiling of revenue for most small businesses, but I wanted to go bigger. Customers, however, were choosing scented candles over potpourri. I couldn’t believe that people would prefer to burn petroleum wax with toxic fragrance, but they did. Once again, I re-thought, and re-set, my efforts with plan B! I made the conscious effort at this time to commercialize the tractor cab potpourri that I had developed and been using on the farm to keep mice out of our equipment, and that’s how my first product, Fresh Cab®, was born. I began giving out samples in the fall of 2002. Knowing farmers the way I did, I knew they were not going to take the time to do anything extra, so I figured if they were tossing a bag of poison in the cab, they might just as well try my non-toxic pouch. The product was working and my early trial customers were happy with Fresh Cab®. It repelled the pests so there were no dead bodies to clean up and it was safe around animals and kids. Photo Courtesy of Hobby Farm I was on my way! Sales began to grow, we picked up more equipment dealers, including our local John Deere, and we were getting noticed and getting press. That turned out to be a double-edged sword. At a local tradeshow, an Environmental Protection Agency representative sought me out to tell me that any product being sold to control pests needs a license, a process that could cost up to $2M. That was a piece of information that rocked my world. How was I going to get EPA approval when I was barely breaking even? There was a fleeting moment when I thought about giving up, but I knew I was on to something— my product had to reach the masses, there was a gap in the market and I firmly believed it was wrong to just keep killing things because it goes against nature. I also knew that even a small percentage of the market could create a healthy business. It took about four years of back-and-forth with the EPA and around $200,000 to finally get the license. The money came from grants, selling my beloved packhorse and camper, and income from selling produce. It was not an easy time, but in 2007, I was back on track and EarthKind® was officially launched. Later, in 2016, I added a line of “home” products called Stay Away®, so now I covered both the commercial and mass sides of the business. I have always had the intention, and still do, to build a new kind of company. I truly believe that business can solve some of our most pressing social problems, and be a force for good in the world. When I discovered that there was 80 percent unemployment within the handicapped population, I considered this workforce as a viable option for open positions – and I’m glad I did. Today, approximately 20 percent of our workforce has a disability and we provide those employees with fulfilling long-term jobs that focus on their abilities. Photo Courtesy of EarthKind I also made the decision to keep EarthKind® a totally ‘Made in America’ brand. That plan included sourcing American-grown raw materials from family farms, manufacturing stateside and keeping a low carbon footprint. As I began to scale the business, the bigger chains wanted lower prices and some suggested that I manufacture in China to get the price down. In my mind that defeated the whole purpose of growing a business using U.S. agricultural products that are environmentally friendly. So I took a different approach at the negotiating table and armed myself with research that showed customers would buy our products if they were in their stores. I have stuck to my guns; even turning down Wal-Mart. There’s a point where low pricing just erodes the value of the brand and the mission of the company. Now, the market has finally caught up with my vision. IRI, a Chicago-based market research firm, estimates that year-over-year retail sales for the overall pest-control market — which includes chemical products and devices intended to kill insects and rodents — was almost $800M as of late December 2016, up 5.5 percent from the previous year. Unlike most of the poison-based products – 90 percent of this sector – 0ur EarthKind® products are safe to use around food, children and pets. Driven by consumer demand in other industries as well, the all-natural category is growing. Sixty-one percent of pest-control users polled prefer to use natural, non-chemical alternatives, according to a recent Mintel Group research report. It’s this type of compelling research that wins over big retailers and opens up opportunities to grow as partners. Lowe’s is a great example of the type of partnership that is integral to growing my company the way I envision it. They had conducted surveys of their own and found that customers were asking for all-natural options for things like herbicides and pesticides. They liked what we were doing and are committed to enhancing the economic growth of their diverse and small business suppliers. They love our company culture and our purpose—this is what they have to say about us: Photo Courtesy of Ferry Building Marketplace “We partnered with EarthKind® because it provides our customers with natural alternatives in the pest prevention market, and its hiring practices positively impact the communities we serve,” Lowe’s Director of Corporate Sustainability Chris Cassell said. I have always thought if I worked hard and worked towards a goal, that eventually success would follow. And to a certain degree, it has. But there is so much more to building a successful company and taking it to a new level than just hard work and innovation – it’s all about leadership. Something I read recently really sums this up for me: “Dynamic leaders do not let a person, company, or disruption come along and recreate their destiny for them—they change with the trends, innovate, and lead their team through the accompanying changes. Dynamic leaders adapt to new technologies and pivot with changing markets and customer attitudes and desires.” I realize I have to be willing to leave my comfortable domain and embrace a new sense of business savvy, tech-savvy, emotional intelligence and cultural fluency. I have to be seen to outwardly do and be all the things I inwardly embrace and believe in. I’m ready to take my company to the $100M mark, I’m ready to step into my personal power to make that “mind switch” because someone needs to take the lead at making family, pet, and planet friendly pest control effective and affordable. Kari Warberg Block As the Founder & CEO (Chief Ecology Officer) of EarthKind®, Inc., Kari Warberg Block was the first to develop, manufacture, and commercialize non-toxic rodent and insect repellents for home use. Her mission was to build a purpose-led company to create change through business.