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Entrepreneur Profile

Barry Schmell and Joseph Costa

De La Sole Footwear

San Francisco, CA

www.delasole.com

San Francisco’s famous Castro District is brimming with shops and restaurants, art galleries, coffee shops, and people. But partners in business and in life, Barry Schmell and Joe Costa, noticed something was missing: a shoe store. So they set out to change a little part of their favorite neighborhood.

With over 15 years of retail experience, Costa had longed to start his own business for years. Schmell, a long-time veteran of the Silicon Valley, says, “I did not always want to go into business for myself, but between the volatility of the high-tech industry and the strong desire of my business partner to start a business, I decided to do it.”

Like most entrepreneurs, Costa and Schmell experienced some nerves about starting their venture. “Our biggest fear was not knowing what we needed to know. We lacked confidence since neither of us had started a new business, yet we both knew we could run and manage an existing business,” says Costa.

To combat the fear factor, the pair enrolled in a business startup course through San Francisco’s Renaissance Center. The intensive class lasted several month and when it was over, the duo had a solid business plan and a new level of confidence. They also read numerous business books and interviewed other business owners to learn from their experiences.

They relied on the Internet for much of their market research but decided they also needed some industry experience. “We attended the World Shoe Association conference in Las Vegas before we started the business,” says Costa. “It helped us learn the shoe industry by meeting with vendors and selecting product lines.”

To finance the business, they used a home equity loan. “This is the best route since it offers the financial independence and best industry rates. The downside is the personal liability, but that is true no matter how you finance the business,” says Schmell.

The high price of real estate in San Francisco meant that they would have to make the most of a small retail space. They embarked on renovations that caused some frustrations along the way. “During construction we trusted our landlord and designer more than we should have. Next time, we’ll get more in writing.” Though the renovations delayed the store opening by several weeks, De La Sole celebrated its “Grand Unlacing” in February of 2004, an event that was also attended by then San Francisco Mayor Willie Brown.

Though the new business owners received a lot of support from their network of business contacts, not everyone was enthusiastic about their shoe store ambitions. “My family thought I was crazy since I had come from the high-paying software industry. Little did they know how volatile that industry has become,” says Schmell. “Our friends were very supportive because they knew what we wanted to accomplish.”

Costa runs the store full-time, averaging 50 hours per week. Schmell works two evenings each week while maintaining his job as a Training Manager in the Silicon Valley. He intends to leave corporate America behind once the store is able to sustain their family. “Both of us worked evenings and weekends for the first four months to learn the business and meet our customers,” says Schmell. “This has been a great strategy for us.”

To market the business, Costa and Schmell spread their reach across numerous platforms. They met with the city District Supervisor, Bevan Duffy, who supported the store by attending the grand opening event and introducing the business owners to valuable contacts in the area. They also launched a website, formed relationships with community news reporters, and used word of mouth to create a buzz.

Costa says, “We are not advocates of advertising in newspaper or magazine ads. We tried advertising with our merchant association and nothing came of that. We believe in having a great location for the business, direct marketing, and utilizing our network.”

Even their company tag line reflects their creative energy: “Fashion for Your Sole.” The thoughtful marketing strategies have contributed greatly to their success. Patrons flocked to the store for the one-year anniversary event, a catered affair complete with a service staff. To add to the appeal, they held a raffle that raised over $600 for a local charity.

“We strive to create customer delight and a reputation for great customer service,” says Schmell. To add to their services and revenue streams, De La Sole places special orders for customers and even ships the products directly to the customer. They also use eBay to sell off close-out merchandise.

Investing in the right technology has proven to be a smart move for the business. “Our point of sale system allows us to keep a customer database. We ask every single customer if they would like to be on our mailing list when they make a purchase,” says Schnell. As a result, the business already has a contact database in the thousands that is notified each month via e-mail about new products and sales. They also use the trend reports provided by their QuickBooks software to evaluate the busiest hours in the store and sales trends.

Now past the one-year mark, Schmell reports that shoe sales are booming and adds happily, “We are blowing away our numbers and are totally in the green.” One part-time employee helps to give the entrepreneurs some occasional time off and they plan to cut back their hours in the near future.

Schmell cites a long list of key factors to success: “Learning and reading, planning ahead, staying focused on our key business and not trying to be everything to everyone, listening to our customers and figuring out what they want, learning from our vendors, keeping things simple, and being open to other people’s suggestions and ideas.”

As for advice for aspiring entrepreneurs, Schmell says, “I think most people are afraid of failure. But what you really need to be prepared for is success from the start, such as investing in the right tools (technology and experts) to manage your business correctly from day one.”

Though there have been challenges along the way, De La Sole has put down roots in the Castro. The owners are already talking about a second location and expanding their Internet presence. “We try to have fun no matter what we do,” says Costa. This positive attitude is reflected in the success of a business that was well-planned from the beginning.