05 December 2016
By Cathy Martin, Business North Carolina
2016 SMALL BUSINESS OF THE YEAR RUNNER-UP:
2 HOUNDS DESIGN INC.
President: Alisha Navarro
Projected 2016 revenue: $3 million
Minutes after I arrive at 2 Hounds Design in Union County, Alisha Navarro, the company’s founder and president, tells me there’s someone I have to meet. “Have you seen Oberon?” she asks a woman working nearby, who motions outside. After a quick search of the parking lot, Navarro scoops up a black and white short-haired cat and brings him over to greet me. Oberon, she says, is part of a colony of managed feral cats the company feeds and cares for, all spayed or neutered. He is the company’s unofficial “therapy cat,” she tells me.
Navarro’s passion for four-legged creatures is an obvious inspiration for the business she started in 2003 with $500 and a sewing machine. 2 Hounds Design employs 36 people at the Monroe plant making dog collars and harnesses. But the business, which had sales of $2.8 million last year, was started “by accident,” she says.
After studying math and physics at Lenoir-Rhyne University in Hickory, then earning a master’s in physics at Appalachian State University, the Statesville native took a job in Wadesboro as a project manager at Selectronics, a now-defunct technology company. There, she tackled projects such as programming security systems and machines that control yarn at textile plants. “I thought it was a great match for me,” Navarro says. “I liked getting my degrees, I enjoyed the labs, I enjoyed the schoolwork. But when I had to stare at the same four walls every single day, and I didn’t get to build something new every day … I was really unhappy.” So at 26, after just one year at the company, she quit.
That was almost 14 years ago. Navarro had sewn a few collars for Paradise and Iceman, two greyhounds she and her husband, Bob, adopted in the early 2000s. “People liked them, so we made a few more and gave them away. Then we made a few more and sold them. It just kept snowballing,” she says.
Starting out in the tiny spare room of their 1,100-square-foot home in Monroe, the couple soon moved to a larger home in Indian Trail and operated the business there with five employees. “We bootstrapped every step of the way until 2009,” she says. That’s when the company moved to its current, 7,500-square-foot location off U.S. 74 and, borrowing money for the first time, purchased a patent for the Freedom No-Pull harness, an alternative to choke or shock collars sometimes used to control large or unruly dogs. “It’s a more positive, more kind tool … that doesn’t cause pain for the dog,” Navarro says. The Freedom No-Pull differs from traditional harnesses because of its two-loop design that tightens when pulled; Swiss velvet lining on the chest strap to prevent chafing; and a leash that connects at the front and back to gently encourage good behavior.
The company sells about 150,000 harnesses a year, which retail at about $30 to $40 each. Collars cost $20 to $50, depending on the design. Most are adorned with colorful ribbons, featuring everything from floral and geometric prints to whimsical designs such as robots or squirrels. Aided by a graphic artist in Minnesota, Navarro often designs the ribbons herself. Products are sold through independent retailers, trainers, veterinarians, and adoption and rescue groups, plus through a retail website. The company doesn’t sell to chains such as PetSmart or Petco because the Freedom No-Pull harness requires instruction for how to use it. “[Independent retailers] take the time to work with the customer,” Navarro says. “If you go into the huge stores, they don’t have time.”
Like many small businesses, managing growth hasn’t always been easy. Late last year, 2 Hounds was struggling to fill orders on time, sometimes taking more than four weeks to ship. Consulting with Gene Beneduce, a regional manager for N.C. State University’s Industry Expansion Solutions, which helps manufacturers and other businesses improve efficiency and grow sales, Navarro toured other factories using lean techniques.
“It’s very rare I see a small company as motivated and self-directed toward getting a best practices program implemented in such a short time,” says Beneduce, who has worked at IES for 10 years. In May, 2 Hounds switched to making products in small batches: Where before, workers made as many as 800 of a single product at one time, now, they never make more than 30 of a particular size or color so inventory is always well stocked. Results were immediate: By July, 2 Hounds was shipping products on time again, within three to five days.
With pet owners expected to spend $15 billion on supplies in 2016, 2 Hounds is gearing up for future growth. In April, the company plans to move to a new 20,000-square-foot building in Indian Trail, about 5 miles from its current site. Though the building will be more than twice the size of its current space, Navarro is cautious about scaling up too quickly. “We won’t wake up one morning and hire another 100 employees. That’s not how we do things here. We bootstrap, we do grass roots, we grow naturally, we don’t force things,” she says. “When you do things naturally like that, you let the market catch up with you.”
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