This case is about Cindy Smith who, with a fashion merchandising background, began her
own home-based business. She starts off by attending local craft boutiques and fairs in
order to introduce the public with her creative ability. There, she sold hand-made infant
rompers decorated with lace, bows, and ribbon roses as well as decorated adult cotton-tee
shirts and leggings. A department store buyer became interested in her rompers and
decided to place an order, with more orders placed quickly after. Because the buyer was
supplying 27 stores at the time, she decided to place orders regularly. This is when Cindy,
along with her husband Greg, realized the need for more labor as the work load was
becoming difficult to keep up with. Cindy also diversified line with children’s hats and
headbands which proved to be a successful inclusion into the business.
Another realization was their need to upgrade and expand the equipment in order to
effectively increase their inventory as they had increased their goods to supply 37 stores.
They saw a sales decrease on rompers and hats, but headbands were selling like hotcakes!
Sewing headbands, that too hundreds and sometimes thousands of them was a task Cindy
wasn’t quite prepared for. She needed extra labor and received help in the form of three
piece-sewers which fortunately resulted in higher sales. However, labor expenses made
Cindy come up with a new business plan in which higher profitability was possible. Greg
quit his job and moved to a small community in the Midwest with the family for the
business to be more cost effective. The sacrifices they made together finally begin to prove
fruitful because their business currently supplies 56 stores and are finally receiving ‘some
real income”. The exciting part is the opportunity for growth for Smith Designs!
They have plans for expanding their product line, maintaining business with current
distributor, as well as selling directly to other suppliers in the future. These opportunities,
however, call for a large volume of product development and the dilemmas Cindy and
Greg face are whether or not they can handle it given their current state of business. They
need to figure out if working with those large companies is possible considering the large
orders they would need to fill. Currently, her products are made with piece-sewers so they
are questioning if their use would be enough to manufacture on her own or if she would
need to seek existing manufacturers for help. Other questions to consider regarding her
