Monday, July 9, 2007/
Enjo’s founder Barb De Corti tells AMANDA GOME how the plan to expand her $100 million cleaning products business to the US lost her a lot of money, how her marriage broke up and what she plans to do next.
Austrian-born Barb de Corti moved to Australia when she was 18 and secured a license to sell Enjo products, which she built into a business with revenue of more than $100 million.
But recently her fortunes have changed.
De Corti was expecting the US arm of her business to have expanded to the same size of the Australian business by 2006. But instead she took a bath and lost a lot of money.
Her marriage also broke up. But an unfazed de Corti reveals plans for her new business to SmartCompany.
She talks with Amanda Gome.
Amanda Gome: You didn’t develop the cleaning products yourself, you actually licensed them didn’t you? What was it that attracted you to these cleaning products?
Barb de Corti: Basically I was introduced by my Austrian mother-in-law and what attracted me to it (was that) they actually worked and they helped my then asthmatic son breathe easier, and that basically was for me the selling point. They cleaned and they didn’t need chemicals, which I found out later on the fumes are quite harmful for asthmatics, and that basically was for me the driving point.
So you found these Enjo cleaning products and then how did you go about getting the license? Was it difficult?
No, not really because the manufacturer in Austria was looking basically for distributors around the world, and he sent us one of his bags with goodies and we started using them. We had $40,000 saved and brought in $40,000 worth of Enjo products and then, you know, went out selling them.
How did you go about building the business?
Basically I got like-minded people. First obviously we did a bit of a look into how to distribute it, and direct sales was our choice because we wanted to demonstrate the product, how it works. It’s much friendlier than just putting a product on a shelf, so we choose direct sales.
You mean by that the Avon model? Door-to-door or home parties?
Home parties, yes.
So you employed consultants to sell… to go into homes and sell these. And how did you train them? I remember one great story about you used to fly into airports and get people in the lounge… tell us about that.
That’s basically how it all started, because we were very short of money but I was a member of the frequent flyer plan because I flew quite a bit. And because we used their lounge, basically I used their little offices in there and we did training sessions at the airport.
So I flew in, the midnight flight or about 6:00 in the morning, and freshened up and by 10 o’clock (had) the first training session and flew out again that evening. So it was pretty full on.
How did you go with cash flow in the first few years?
Very very difficult, because every little cent needed to go back into the business… we believed so much in the product. We sold our house to get some cash flow because we owned the place, and to be able to then order the goods in as we needed them. And it was also more efficient, so it didn’t cost us a fortune to bring the products in.
So you sold your house. Then when did you start to see the light? When did you think ‘oh no, I can start to stop lying in bed staring at the ceiling wondering how I’m going to pay people’?
I’m still waiting for it. It was about three years into it where certainly you know, because I had to do the demos myself as well, so I said OK, this month I have to do 20 demos to pay for the electricity, to pay for the transport and all those things, and so this was after about three years where I could cut back myself and really just focus on running the company, giving seminars, and looking at product improvement and manuals and things like that.
Looking back, should you have taken some equity or bank loan, or was there any other way you could have raised capital?
Probably with a product which was absolutely not known, and totally new to Australia (I mean it didn’t exist), nobody would have given me any money I think. So it was the hard yakka.
How did you grow, apart from the direct sell, did you do any advertising?
Not the first three years. It was word-of-mouth by exceptional customer service and basically introducing our customers slowly but surely to the product, and following up and educating them how to clean properly and the benefits of it.
And then basically word-of-mouth got us the next demo, and things like that. Being a fairly new company or a brand new company after three years, everybody who wanted to go into the party plan joined Enjo. We just grew organically I suppose.
What was hardest for you? Managing a business that was growing that fast?
Oh my God. Different hats every five minutes I suppose. And one of the things is you pretty much… well I’m very goal driven, so I knew where I wanted to be and I dissected everything, and I also was surrounded by quite a few very good people who helped me, so it wasn’t just myself who got us there. I had very good advice and support there as well.
Who was in your support team that looking back you can think ‘that was essential for my success’?
My then husband. And a couple of key people like Joan Rake who was just an amazing consultant.
What area though?
Sorry, the consultant.
The consultant in sales, she actually taught… because I wasn’t actually a natural sales person but she showed me how to promote Enjo products and how to give the customer the best, and the way she demonstrated it, the way she spoke to people and everything because she believed, like myself, everybody needed the product. And I learnt a lot from her and she’s now 73 and she’s still a consultant with us.
In the sales process, what was it that you learnt sells?
Well first is you can’t put a price on health because when we first started out our product compared to Domestos or whatever, I mean (it) was quite expensive, perceived to be quite expensive, and I learnt from her actually to promote the value of a product. And she said ‘you can’t put a value on health can you’ and I said no, actually you can’t. It’s like would you invest in your health for the future.
I read an article today in the paper where it basically (talks about the low quality of air) in your home. And this is because the air pollution is just so high in our homes nowadays that 14 years later people actually read about it. People hear about it. It’s in the media. We started it back then but people really weren’t as knowledgeable about it back then.
So you found you could price your products at a more expensive rate because people didn’t put a price on health?
Price became an issue for some people, because the product is… what one has to understand is the engineering of it, the manufacturing of it and stuff like that is a lot more costly than if you produce a chemical in a plastic bottle, so the price for it had to be what it had to be because at the end of the day we were a company and we needed to generate an income and profits.
So it the point for the customer was, $5 worth or $3.50 worth (compared to) something like at the time I think $29 and it was just like ‘Wow’.
And then I had to basically bring across ‘no it’s actually not expensive’. First it’s long lasting. Two to three years. And how many bottles of detergents would you have used, and the health benefits.
And that’s something she taught me. Maybe because being a bit older as well, and I don’t know, that was just a huge learning curve for me.
So you started the business what year?
And then you went through the hard times. When did it start to take off and what was your next step in your business strategy?
Well basically it started off and I realised instead of going out there doing demos myself I had a real aptitude to actually give seminars and get people to listen to me, so it was my focus then to actually talk to people, train people and I also figured out I have a huge patience for people and helping them to run down business, helping them to actually have it all.
A family, a great income and doing something for people’s health and the environment, so my focus then went along the line that I was a lot on the road and still am with seminars and basically helping… specifically women to run their own businesses and still have their families.
You said you’d broken up from your husband. That wasn’t work pressures?
No, no no. I think it was just 24 (years) together. You know how you change with time and I met him when I was 15½ years old and I think it was a very amicable split up and everything and it’s just like… we’re still good friends and everything but the fizzle went out of it and so we just moved on, both of us.
So you then went to that next stage. Where have you got to now? You’ve also developed… bought into a cleaning company?
No we started our own. Customer demand was just gi-normous and everybody said we can’t get our cleaners to clean with our Enjo products. We need a cleaning company and then after a couple, or many, years, we just basically were ready to start our own company and we’re just working on a franchise.
What’s that called?
Enjo Home Cleaning Services.
And you’ve launched that?
We launched that inhouse. We started here in Perth and the demand is just gi-normous, and the thing we find the most difficult is to find good cleaners and again the motto with Enjo is always we look after our consultants, look after our cleaning staff.
To do things differently. Not only by paying more than the going rate, but also working on a reward system where we have… also the cleaners coming to our festivals. They can travel overseas and things like that. Again creating a cleaning company which doesn’t exist not only with (being) chemical free but also that we look after you.
You show your loyalty to the company and we show loyalty to you, not only with the great pay package and super and all those things, but also we treat you well.
How many cleaners have you got in Perth?
Currently only about 10 and we’re looking for about 30 or 40 more.
Gee, how long have you been looking for 30 or 40 more?
For three months. These haven’t gone northern suburbs. I don’t know if you’re familiar with Perth but there’s this river, the Swan River and the Merris Bridge. There’s south and north and we are only currently running it south of the river. We just can’t find the cleaners.
Are you going to be expanding to the east coast?
Sydney is our next start. We’re starting there, our launch date is in August and we’re having a great team over there. A husband and wife team to start it there and yeah, eastern states as well.
So it’s a franchise. And you’ve started another business too?
We run Encom, which is our commercial arm of the company, which basically the industry just screams out for a change in the way they clean and also a lot of commercial buildings where they just rent out the office space, they want a cleaner environment for their customers and unfortunately the cleaning industry in Australia, the commercial cleaning industry, is very hard to break into because I think there’s still this… I don’t know, there’s a bit of a barrier there. ‘We have done it with chemicals for so many years, don’t tell us how to clean missy’ and we as Enjo sort of relate there is a better way and an easier way and most importantly, healthier way for the cleaners.
So what’s the difference? What would a cleaner cost in Perth? What would a household pay for a cleaner in Perth?
What we actually do is we quote households. We come into your home, for instance if you’re a very neat person. We don’t believe we charge you $20 the hour or whatever. We come in and say ‘this is what you need, this is what it’s going to cost’. So we don’t actually work on hourly rates. We’re really looking at your needs and so it’s very hard to actually say…
Is it comparable or is it expensive?
No, it’s comparable. Most certainly. I actually think it’s a lot cheaper because you get a so much better clean and I have our cleaners cleaning my house and I had a cleaner for years and I had to let her go and she was cleaning with Enjo products, but then I had our cleaners coming in from the business and it was just like ‘Wow’.
So we train them very well to clean those things which only you see when you walk into your home. The visitors would probably never see it, but you know it’s there and they’re annoying you, and we do all that part.
Now your business would be turning over about $100 million of revenue a year now combined?
All my business is combined, yes.
Where to now? You’ve launched into the US. Is that your first export market?
Actually the US we hand it over to somebody else because it was just too much to deal with… all over the world. You can only sit on so many chairs, but we most certainly have our finger still in it but not really on a daily basis, no.
You said back in an interview in 2004 you were hopeful that the US arm of the business would expand to the same size as the Australian business by 2006. What happened?
I wasn’t there!
You weren’t in the US?
Just kidding. But it’s one of those things I truly believe that it takes a certain kind of person to do it and it just didn’t quite work out. Maybe the timing wasn’t right. I don’t know, and we here in Australia couldn’t invest as much time as we would have liked to because you know, you take your eye off your own business in Australia and then something goes pear shaped and I think we might have over extended ourselves.
Not so much financially, but from a personal strategy. There’s only so many places you can be at one time, so we basically came to an arrangement that the manufacturer in Austria is handling it himself, and as far as I know they’re doing alright but not to the extent as Australia.
Was that very costly for you?
Yes it was. I must admit that.
And was this because you didn’t get the sales so you lost the money on the resources?
Did you try any other markets. Have you tried any others or have you pretty much stayed in Australia.
No, we’re just focusing on Australia because it is an ongoing challenge. Also in Australia you know, at the end of the day we’re working with consultants, which is a bit of a volunteer basis, you know, when they feel like working they work and if there’s other commitments coming up they can’t, so there’s constant focus on that and trying to keep them motivated and also the difference we are making.
And we found diversifying also in Australia, like into commercial cleaning as well as the home cleaning, gave us enough challenges as it is, and it’s pretty full on.
So basically with the strategy you looked at overseas. That didn’t work. So you’ve come back and you’re now diversifying into setting up these new businesses.
How successful do you think the commercial and the home based cleaning businesses will be?
Oh that’s going to be gi-normous I think. I can already see now in the home cleaning department what an impact we’re making, from the customer feedback, from the people we can’t actually service because we haven’t got the cleaners.
We literally, we give 20 quotes, we pick up 19 people and because the industry screams out for a clean home, not just something where somebody comes in and sprays the chemicals around.
Are you finding that there is more competition for the product? There’s more environmentally friendly cleaning products now on the market.
No. There is only one, Enjo.
There’s only one Enjo from the longevity of the products, from the service of the company, from what Enjo offers there is always perceived competition and we know what is out there, don’t get me wrong. We pretty much have our fingers on the pulse but we had [Oats] trying, we had Sabco trying.
They had their products, they copied us. Went to China, produced it very cheaply and you know, you get what you pay for. It fell apart after a couple of uses and customers pretty much, if they weren’t Enjo users became Enjo users, and if they were and slipped for a couple of months they came back to us.
So you still pretty much feel you’ve got that. What percentage of the environmental cleaning market do you think you’ve got?
I couldn’t answer that to be quite honest. I wouldn’t have a clue because it’s such… it depends also what you see as environmental. I personally do not see a product which is vinegar and bicarb, that’s not environmental to me. This is just basically polluting in a different way.
Because it just… if everybody starts cleaning with vinegar it becomes a nightmare because we would kill anything in rivers. Bicarb soda is the same. You put bicarb soda together with vinegar and you create carbon emissions, so to me the only way to make an impact for the environment, for people’s health is technology, and for the environment in our case on top of it is the longevity of the product.
The country where we manufacture it under the highest standard, they just won another eco award up in Austria from the way we recycle as well. The products that we are using, the packaging, the electricity, all those things our products have already before it even goes out to the customer you know.
It is from the time it actually gets manufactured to the time it gets recycled or reused there is just one environmental line through it, and on top of it of course the health issues and everything, so as far as I’m concerned there is nothing out there but Enjo, which currently has all the win-win-win for everybody.
Now Barb, how old are you?
Oh my God. Next you’re going to ask me how heavy I am.
No, I’m not.
I’m 44 years old.
Where are you up to in your stage of life? You’re not ready to sell or… you’re still really excited by the challenges?
Hey with Enjo we just have the tip of the iceberg. There’s so much more to Enjo that I probably… the next 40 years I don’t have to look anywhere else. I’m still as excited about it, as passionate about it.
I still work with a fantastic team and yeah, absolutely, to me it’s just a beginning. And what is so exciting now for me Amanda is that people are actually at the same page as we are.
You know, Al Gore thank God, brought it to the public’s attention and the media attention what needs to be changed. And so it’s really nice to work in an environment now where you don’t have to educate the public on top of it.
So there’s big things for Enjo to come.