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CAROL SCHROEDER (Orange Tree Imports): It was always my dream of owning my own store, and it just came true a little faster than I expected.

HATTIE: Now wait a minute, where did you get the money to just buy this business? How old were you?

CAROL: Oh, I wasn't very old . . . about 21 or 22 years old; we had some money saved up. And we were also able to borrow some from the bank.

HATTIE: You were 21 and you had money saved?

CAROL: Well, actually, my parents had saved money to help put me through college, and I skipped a year, so they were very kind and let me use some of the money that was saved.

HATTIE: Now I get it. You compressed your college education; that's great. So you started your business with leftover college money.

CAROL: Actually, what we did was we pledged that money as collateral and borrowed money against it, so that when we needed money later and were done using it as collateral, we had a little bit more cash.

HATTIE: That was smart. (Voiceover) Orange and Dean started with furniture imported from Scandinavia, but through the years they've listened to customers, watched trends and formed a deep understanding of the marketplace they serve.

CAROL: When we took over the store after six months of running it, we decided to get rid of the furniture. It was heavy and very difficult to deal with, and we'd have to carry it up by hand from the basement. So we got rid of the furniture. We only had gift and Scandinavian accessory items and a little bit of kitchenware.

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HATTIE: (Voiceover) Today's product mix is based upon a philosophy Orange wrote about in her book, "Specialty Shop Retailing": `You cannot be all things to all people. The ability to find out what customers want and get it for them quickly is one of the strengths that sets a good specialty shop apart from its mass market competitors.'

CAROL: I had a lot of people coming to me for advice, and I wanted to kind of consolidate that advice in one format. And now when they come and ask me for advice, I ask them if they could read the book first and then ask questions on what they hadn't learned from the book.

HATTIE: Always the merchant. `Buy my book.' How do you get people to come into the store?

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CAROL: It helps if you have a location that has lots of walk-by traffic or drive-by traffic so people notice where you are, if there are other businesses around you. But after that point, you have to really reach out to people that you feel are your target audience.

Unidentified Woman #1: There are a lot of unique things here. It's fascinating. You could spend a lot of time, you could spend a whole day here.

Unidentified Woman #2: It's incredible. You know, you want to go to every little shelf and take something of everything home with you. It's really nice.

HATTIE: So you already have several items in your basket.

Woman #2: Yes. We're planning on going to the kitchen section next.

HATTIE: Do you have a credit card? Woman #2: Yes, luckily.

CAROL: The more you know about who your target market is, the better. If you're marketing to teen-age kids who listen to the radio, then you need to be on the radio. If you are selling furniture to an upscale market, you might want to be in a slick city magazine. You also would want to probably do some direct mail to that targeted market.

For instance, we once rented a mailing list from Bon Appetit to reach people who are interested in gourmet cooking. The way it works when you rent a mailing list is you're given permission to use it once for a specific use, and that's why it's called renting rather than buying. You can also sometimes work out an arrangement with a non-profit group where they might let you use their mailing list in exchange for a donation to that group.

HATTIE: (Voiceover) Orange writes in her book, `A mailing list of your customers is essential and can be one of your store's most-valuable assets if you use it often.'

CAROL: We're part of a catalog group called the Royal Glen Catalog Group out of Sacramento, California. They put together the catalog with products that we vote on as a group. The other stores get together at the San Francisco Gourmet Show and they decide what products they would like to feature that year. The catalog group then arranged for co-op which means they get a discount on most of the products in the catalog in exchange for advertising them and that helps pay for the catalog.

HATTIE: How often do you mail your catalog to your list?

CAROL: We have a Fall catalog we usually send out the end of October or early November. Then we do a Spring catalog that we've just done the past two years. We're allowed to personalize it with a photograph on the inside of the front cover. We put a picture of our family in that spot and I have to say that is generally the one feature that everyone mentions when they get the catalog. They look at it and say, "gee the kids have grown."

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HATTIE: How do you stay special? How do you make yourself different from the big stores?

CAROL: Well, we watch for lines that are being discounted, and we try not to carry the ones that we know are really prevalent in the discount or big-bucks stores. But also the fact that we present it the way we do; we select things. Stanley Marcus once said that, `A specialty shop preselects things for their customers. They choose the very best of each item, so that when the customer comes in, they know that there's something really unique about the products that are being offered.' And, also, we offer them in a pleasant environment. We gift-wrap them. We help people select them. And that doesn't happen in a discount store.

I love traveling to gift shows. We're doing New York, San Francisco and Chicago this summer. I also meet with sales reps all the time and review product. And I'll look at almost anything, but I have a clear focus about what I think my store can sell, what my customers will want and will pay for it with their money. And that's how you know if a product is successful or not. It's a mistake just to buy what you want because what you like may not be what your customers are asking you for. There's so much merchandise out there, and you really have to discipline yourself not to just buy what you like, but to think about what your customers have told you they like. They vote with their dollars.

HATTIE: (Voiceover) What fun it was for me to find on these shelves products from two companies we've studied here at SMALL BUSINESS SCHOOL. Jill Smith's Buck Eye Bean and Herbs' shaped pastas and other goodies occupy space in Orange's specialty food section. Judi Jacobsen's Madison Park Greeting Cards have a place in a wide selection of cards you can find only at Orange Tree. Both Jill and Judy manufacture in the state of Washington and here we are in Wisconsin. This is great.

Unidentified Woman #3: Since the beginning, since she opened 22 years ago.

HATTIE: Wow. Tell me why you come here.

Woman #3: It's just a fun place to be. You can come here and look, and then you can go back a week later and find different things.

HATTIE: (Voiceover) The absolute key to specialty retailing: hard-to-find, unusual products. Surprise the shopper, and the shopper will come back.

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HATTIE: (Voiceover) Orange Tree Imports does about $1.5 million in sales and employs 30 people; some full time, some part time.

CAROL: Well, I think that when you hire your first employee, it's really trusting your baby with somebody. It's like having your first baby sitter -- you want someone who's going to have your vision and your way of dealing with customers and your love for the merchandise. But it's also liberating. It's like that first night out after the baby was born; you get to leave the store for a little bit. And I think it's a great relief to know that there are other people that you can trust with your vision and who will not only carry out things the way you want to do it, but do it 10 times better. What we're looking for is not so much a degree in business, which would be a bit hypocritical since we don't have degrees in business ourselves, but some retail experience and experience working with the public. And mostly we're looking for an attitude.

HATTIE: You and Dean own the store, but do you make all the decisions?

CAROL: By no means, and I wouldn't want it that way. We do have the ultimate veto, and we ask our employees for input on all major decisions. So early on we started using something called participative democracy. It is a democracy -- to some extent somewhat of a benevolent dictatorship -- but the key word is participative. I want my employees to really feel that this is their store and to convey that through their work. We do vote on who's hired. Everybody on the staff is invited to come to a staff interview. It really has been a wonderful system because it gets everyone's energies united towards a common goal. And I think that meaningful work is so important today. They can get a paycheck anywhere, and they can possibly get a bigger paycheck somewhere else. But if they feel good about coming to work, and if they feel good about their teammates that they're working with, then I think it makes a real difference in retaining people.

HATTIE: Susan, how long have you been here?

SUSAN: I've been here 19 years come this October. I was hired as Christmas help, and they just can't get rid of me.

HATTIE: Now why are you still here?

SUSAN: 'Cause the people are so nice to work with, and Carol and Dean have been very good to me over the years.

CAROL: Well, one of the things that we do as part of our participative democracy is we have staff meetings. We not only do staff meetings for hiring, we do staff meetings about three or four times a year just to talk about general issues. We have training seminars for our employees so that they're educated. And we also have what we call window meetings--we just had one last week--where we get together and say, `OK, here's a calendar for the next two months. We have a main window, and we have three smaller windows. What's going to be in those windows?' And we brainstorm about what holidays are coming up, what products are coming in and then people volunteer to do those windows on their own time, taking the concepts that we've come up with in the meeting. And that's very exciting.

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HATTIE: They do it on their own time?

CAROL: Well, we pay them, but...

HATTIE: They do it while they're here, but they squeeze it into their regular work.

CAROL: Exactly. And, in fact, that's how all the restocking is done, also. We have assigned countershifts when you have to be there behind the cash register to work with customers, but all the rest of the scheduling people do on their own.

HATTIE: I've never heard of letting people do it that way. So I can save my stock time and come when the store's closed and do that?

CAROL: Exactly. Or you could come in at 8:00 AM and do your restocking before we open at 10, and that tends to be a very good way of doing it because people take care of their own responsibility on their own time.

HATTIE: Doesn't that sound different? I mean, I've never heard of that before.

CAROL: Well, it could well be. I think that it's the wave of the future. I think that in order to keep good employees, especially in retail, we're going to have to be more creative. And even with the assigned countershifts, which tend to be four-hour shifts so that people can do half a day or a whole day, we encourage people to take subshifts for each other and trade around. And we offer a bonus. If you have subbed for someone else 10 times, you get a voucher each time and then you get a reward after those 10 vouchers are turned in.

HATTIE: So what I think you're teaching me is a lot of nurturing creates this wonderful culture.

CAROL: Probably the most important thing we can do and which we never do enough of is complimenting our staff, thanking them, making sure that they feel that they're doing a good job. And that's very hard. It's hard for us as entrepreneurs. As someone once said, you know, who does that for you? Who gives you the pat on the back that helps you pass it on to somebody else? So it's hard to do, and it's hard to remind yourself, when you've got a lot of tasks to do, that you really should spend a little bit of time with your staff and make sure that they feel good about what they're doing.

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HATTIE: (Voiceover) Frequently, the employees get together and learn about new products so they can help customers make the best buying decisions.

DEAN SCHROEDER (Orange Tree Imports): Each one of these is individually hand-balanced at the factory. That's how it can spin so fast and be totally stable on the counter. Would anybody like to come up and try this? It helps if you're going to demonstrate it for a customer.

CAROL: Yeah. And who wants to win this?

Unidentified Employee #1: No.

Unidentified Employee #2: No.

Unidentified Employee #3: No. No.

Unidentified Employee #4: Nobody here.

CAROL: OK, why don't you hold it? Now we know we're doing it fairly. OK. And today's lucky winner is Karen.

KAREN: Thank you.

CAROL: Congratulations.

HATTIE: Have you tried the raspberry fudge sauce?

Unidentified Employee #5: This one I haven't tried, but we do try to open up everything at some point so that we can taste it and that way we can recommend it to customers. If they come in and ask, `What's a good salsa?' we can tell them how hot it is, how sweet it is.

HATTIE: So I guess in 20-plus years you've had a lot of marriages, divorces, babies born, all that, among the staff.

CAROL: We've had 120 employees over those 21 years, and we're still in touch with almost all of them. We have staff reunions about every five years. (Voiceover) We have a whole family tree of employees who've worked here over the years and have either graduated from the university and moved on or gone on to other jobs.

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HATTIE: Orange, you are what I would call an unconventional person. You probably do some things in unusual ways. What would some of those things be?

CAROL: Well, one of the things, for instance, is that we don't have an office. Neither Dean nor I has a desk. And we try and be in contact with our customers, so we have a little table that we work at out in the customer assistance area. It's a compromise, but it means that we're available to customers that want to ask us questions.

HATTIE: Why did you buy an old building? What were you thinking?

CAROL: Well, the old building is in an old neighborhood, and that to me is really valuable. It's a beautiful street to be on. And this building has a wonderful, leaded-glass bay window that was built by an Englishman back in the 1910s, and I fell in love with that. I like anything English, and it was just right for us, I think.

HATTIE: (Voiceover) Orange Tree Imports is on historic old Monroe Street in Madison, part of Wisconsin's Main Street program, Alicia Gehring is director.

ALICIA GEHRING: It's a good place to do business because, one, you can do things your way. You can be an independent business owner, and you don't have to follow other people's rules that are sometimes in place in regular shopping malls and that sort of thing. Two, there's always a spirit of camaraderie in these kinds of business districts, so you can get involved more in the community. And more and more business owners, small-business owners particularly today, are really wanting to give back to the community, and it's a way to do that. And, three, it is a great place for small businesses that are unique to be unique and to sell that uniqueness.

CAROL: (Voiceover) Well, there wasn't a Merchants Association when we opened 20-some years ago. It was something I really felt a need for it -- to try and get people together, to cooperate, to do events together, to do advertising together. I think that being in an old neighborhood, it's such an important part of our cities to keep these neighborhoods alive. And we just aren't really shopping center people. This is where we belong.

HATTIE: (Voiceover) Very early on Orange and Dean decided their lifestyle is more important than big bucks.

CAROL: (Voiceover) We've had many opportunities to expand, but we decided that it really made a difference for us to be here and to meet the customers. Also, we decided to have children instead of branches.

HATTIE: (Voiceover) Their children have grown up in the store.

CAROL: (Voiceover) We've always traveled together as a family on buying trips, and when it's inventory time we're all here working. And so it is part of our lifestyle, definitely.

HATTIE: But . . . you can write your own schedule, be your own boss, surround yourself with products and items that you like. Don't you think that it's . . . bigger than a business? Do you know what I mean?

CAROL: Well, I can't imagine life any other way. It really is part of how we picture ourselves and how we define ourselves. But, I also realize that the store has a life outside of my life and Dean's life; I mean, it means a lot to different people. It means something special to my customers. It means something special to my staff. And I have to incorporate all those visions into what the business is. It's not just my image of what Orange Tree Imports should be.

THE LIGHTBULB

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HATTIE: Orange Schroeder is a team player. She hired employees immediately; and after only being in business one year, her husband joined her. Her employees are all critical to the decision-making process. She runs her business, she says, as a participative democracy. This means decisions are made by the team. Then outside her business she's a team player. She started the Monroe Street Merchants Association. This means the shopkeepers are working together to bring shoppers into the area and to revitalize the entire business district. Orange is smart enough to know that you can't build a business by yourself and you certainly can't build an entire shopping area alone. Many of us are working ourselves into a frazzle because we're trying to do everything alone, and we're not playing on a team because we haven't built a team. After 22 years, Orange isn't tired. She's ready to do another 22 years with Dean and her staff. If you're tired, frustrated, frazzled, stop doing everything alone and start building a team.

Delete for web play. HATTIE: At SmallBusinessSchool.org there is self help study for people who want to start a business and those who want to grow the business they have. From the home page choose "Pathways to self study" next you'll find eight steps or stages of growth. At each step you'll find links to more resources. Also, in the video box for on-line learning, you can always watch a current episode and you can experience an interactive study guide.

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CHRIS GELALICH: This is the special collector cup piece this year.

HATTIE: (Voiceover) Orange is constantly staging events to attract customers to the store. Here it's Chris Gelalich of Vendor Wrap doing Christmas in July. He shows what collectors have to look forward to in the newest line of ornaments.

CHRIS: (Voiceover) So we wanted to give people a preview.

CAROL: (Voiceover) Well, I think that it's really important as a specialty shop to keep a certain excitement alive. You want people to want to come into the store, to feel that there's always something to see, something new. And one way to do that is to have special events.

CHRIS: She was my very first appointment when I moved to Wisconsin. She works very well with vendors and, also, sales reps like myself, listening to what we have to say and what we see, what's moving, what's not moving.

CAROL: He's obviously much more knowledgeable about his specific line (which is Christopher Radko Ornaments) than I would ever be because he sells that line day in and day out. And he's willing to give up a couple hours of his time on a Saturday to come and show those samples to our customers and talk to them about them. And collectors, especially, love to talk to someone that really knows a lot about a line because they want the inside scoop. They want to know what the newest color of a certain ornament is or what's being retired, and that's something that we can offer them that a discounter can't.

HATTIE: (Voiceover) Orange mails invitations to the customers she knows already own ornaments from this manufacturer. Her success as a retailer depends on this type of targeted direct marketing.

CAROL: When you decide what to advertise, even though it might be very tempting to run an ad to get rid of the 100 souffle dishes you have in the back room, if souffle dishes aren't selling, you're wasting your time running an ad for souffle dishes. You need to run an ad for lemonade pitchers or whatever is hot at that time of year.

Retail is detail.

There are many, many details every day, and you have to keep your energy level up and keep excited about what you're doing in order to attend to all those details and make your store as successful as possible.