It’s always hard to watch Ben and Liz from Sseko Sandals, passionate and smart entrepreneurs, leave the Tank without an offer. It’s especially hard when entrepreneurs with a charitable mission leave empty handed. Their heart is in the right place, but the investment isn’t profitable for the Sharks. SSEKO Sandals’ passion for helping women in Uganda is inspiring, but unfortunately that isn’t enough to sustain their business model. The Sharks’ advice was spot-on. Let’s review it carefully because we want other mission-focused businesses to learn from SSEKO Sandals.
After bringing in 3 million in sales in their first 3 years, Ben and Liz Bohannon took $250,000 loan in 2012 that started a cycle of loss. Even with awards, positive publicity and new salespeople, their sales weren’t taking off the way they should have. They were projecting continued losses on 1.9 million in sales without an explanation of losses and without a strategy on how to turn the company profitable. The Sharks loved their mission, embraced the product offering, but couldn’t see the investment potential. The key piece of advice from the Sharks was donating to charity AFTER the sales come in.
Three successful Shark Tank businesses reinforce the value of this key difference from the Sseko Sandals model:
Mission Belt: $1 from every Mission Belt sold goes to fight global hunger and poverty through micro lending. They’ve provided over 15,000 unique loans.
Grace and Lace: A portion of every sale goes toward building orphanages in India. By the end of 2015, they will have built 10 orphanages to house, feed and educate 350 children. They’re also building safe houses in Nepal for victims of the sex trade.
Bombas: For every pair of socks purchased, they donate a pair to someone in need. They’ve donated 278,798 pairs.
All of these companies focus on their company’s profit first to sustain their charitable mission. We believe in SSEKO Sandals’ mission and want to see it thrive. They should consider donating after-sales profit as a proven model.
Dan Casey, founder and CEO of purchaseorderfinancing.com, believes every business has a story to tell. He’s been listening and helping small businesses grow exponentially since 2002 using a creative combination of finance tools. He’s been featured in publications including Entrepreneur Magazine, Entrepreneur Online, Small Business Trends Online, The Washington Post, Crain’s Chicago Business & American Express Open Forum.
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