“The hardest thing I have had to do as an entrepreneur was to walk away from a major piece of business that, on the onset, appeared too significant not to work to retain.”
– Luconda Dager, President, Velvet Ice Cream
Velvet Ice Cream is 104 years old but its fourth generation owner, Luconda Dager, faced a challenging business decision. She had to determine if continuing a consignment partnership was worth keeping. Find out how Luconda reached a decision and restrategized so the company can continue to be profitable.
Emerging as a Business Leader
Luconda join the family business full time in 1994. A formal education armed her with the necessary discipline, technical knowledge, and guidance from experts to run a successful business.
Her journey to leadership began when she immersed herself in the company’s various departments from accounting, sales, production, to the ice cream’s delivery route. There wasn’t a day she doesn’t remember “not being [in] manufacturing,” she describes.
In 2009 that she took over as President, working along side her sisters.
Upholding a Successful Heritage
Luconda and her sisters are continuing their great grandfather’s business that began in 1910. The business has initiated several innovations throughout each decade, from second generation owner Charles Dager’s change of city ordinances for independent supplier’s favor to the company relocation of its manufacturing to the Ye Olde Mill. The Ye Olde Mill draws over 150,000 visitors as it offers tours, picnic, entertainment, and dining at its restaurant and ice cream parlor.
Making a Tough Decision
Luconda faced a tough decision when one of Velvet Ice Cream’s retail chains decided to switch its vendor systems to Scan Based-Trading which required them to buy back their inventory and sell it in the retail stores on consignment, and this means that thousands of dollars worth of products would be exposed to elements outside of the company’s control.
Although it seems like a regular decision for other business owners, it was a choice of shifting company priorities. “Keeping the business would put us at major risk of losses. Saying ‘no’ would mean losing 20% of the business,” Luconda describes.
Making the right decision led to a lot of sleepless nights for Luconda and her family. They decided to vote on whether or not to pay $250,000 to buy back their products and resell them on consignment. The figure itself indicated a significant loss.
Before voting, the company worked with the retailer under new terms for several months. A full accounting of the retailer’s new system showed that it would cost more in human, financial, energy, and product resources. Velvet was actually losing money from the upgraded system.
Moving Forward
Luconda made the tough decision to end the relationship. Undefeated, this allowed Luconda to focus on expanding their profitable lines of business. It was a risk, but taking this step helped her to restrategize. “You have to pay close attention,” she emphasizes. “Be cognitive of the lessons you will learn and know when you need to walk away,” she elaborates.
Luconda’s story reveals how taking risks can move Velvet Ice Cream in the right direction for the better. Striving is a matter of persevering despite what may seem like a setback.
