I only read one condition About an ice cream company that made the same mistake as other companies: it was not satisfied with success, but wanted to become bigger.
The company started as a family business, and the husband loved making ice cream, and the big idea came, why not sell ice cream? In 2010, they first began tasting ice cream with visitors at a festival to see how they liked the pair’s unusual ice creams, such as maple syrup and bacon ice cream. Since the test seemed successful, they started selling ice cream from a wheelbarrow, and later wanted to have their own shop.
They used all their savings to rent a store in Brooklyn, and the ice cream was such a hit that they had to temporarily close it after four days because everything was sold out. Even after the reopening, long lines stretched on the street waiting to be served.
Since the store was doing so well, they thought they would open another store in a new location.
One of their clients was a Disney director, so the company also signed a contract with Disney, and the business seemed to take off from there.
Business was booming, they didn’t want to miss an opportunity that might never come back and they wanted to expand. They took out bank loans and asked investors for $20 million, which they covered with their personal assets.
At their peak, they already had twenty stores in four states as well as an online store with delivery, the company’s ice cream could be purchased at 800 other stores, and the company was valued at $40 million at the time.
However, there was an increasing burden on managing the increasingly remote stores and training staff. They hired a lot of people, but few of them were right for their jobs. Investors weren’t interested in this business either, so they didn’t understand much about it.
With the expansion, the core philosophy, the concept of fresh and special ice cream, was also damaged.
The financial burdens were getting bigger and bigger, so the company chose to escape, and wanted to sell more in order to manage the outstanding debt obligations. But investors did not want to provide more money, so the company went bankrupt, and was sold for $1 million in 2020, immediately going to creditors. The owners also lost their own property, as they also assumed responsibility for the company’s debts.
The owners licked their wounds for a year and then went back to where they started: opening and operating one store.
They would be very rich people now if they didn’t want to dream big, expand, and reach for the stars. The one store in Brooklyn would have made enough profit for them in 13 years that they could slowly consider retirement.
I also had a client who made more money when he had a broken down truck and an assistant than he did when he had a factory and 35 employees. As a bonus, there was more work and stress at the plant and its 35 employees. Then the question arises why he does that. Why grow if it doesn’t bring more benefits, or the previous benefits are more than enough for a financially great lifestyle.