Lisa Price, founder and president of Carol’s Daughter, proudly announced recently that her company “joins the L’Oreal family.” After being in business for 20 years, she was acquired to expand “the multicultural consumer segment” , L’Oreal USA’s president Frederic Roze, stated. Understandably, opinions were mixed. Soon, the Facebook and Twitter comments started flooding in. “Don’t change the quality!” “I hope the prices come down.” “I don’t trust L’Oreal!” “Congrats!” “Sell out.”
As both an entrepreneur and a consumer of the product, I completely understand both sides of the argument. As a business owner, the bottom line at the end of each day is “am I profitable?” In fact, earlier this year, there were stories that Carol’s Daughter Stores LLC, filed a Chapter 11 petition in Manhattan’s bankruptcy court. If a company is faced with closing its doors permanently or being acquired, people would surely understand her decision, right? As a consumer, however, it’s not that simple in our community. This was “our company” who understood (and marketed to) our unique needs. Now, a large corporation was going to be in charge.
The reality is that most products for African American consumers are already made by large corporations drives home the point more. This company was one of the “last” black owned beauty businesses. Why is our community so tied to “our businesses”? Here, are a few thoughts about OBWB (“Owning Businesses While Black”):
You are Not a “Not-For-Profit” Organization. “Selling out” is not loyal, the customer will argue. We supported you during the ups and downs! Now that there is a proverbial check on the table, the community feels abandoned. As an owner, however, you must wear a different lens. Your focus is to get a return on your investment. In short, Ms. Price is in business to make a profit. I was in her shoes, and there were many days I wondered if I were really running a “NOT-for-profit” organization. And ultimately, I kept it “real”…and my business closed. In sum, as a business owner, you must keep your personal feelings aside from business decisions.
Expanding Is The Goal Of Every Business. If the reports were true that Ms. Price filed bankruptcy earlier this year, that means at a minimum, the businesses expenses exceeded its revenue. People look at popular businesses and automatically assume there are profitable. Not necessarily. If the business was strapped for cash, its potential for growth was limited. L’Oreal brings cash and business operation experience to the table. Additionally, improvements to the quality of the products are possible with the company’s science and technological expertise. Remember, growth is the goal, and after 20 years, it’s possible that the entrepreneur had carried the “child” as far as it could go.
When you are the owner of a business that markets to the black community, and you do a great job, the community embraces you. As the former owner of a day spa and salon, I had many first time guests say “I went out of my way to support (a black owned business).” People feel a great sense of pride. As such, we should be extremely proud of what Carol’s Daughter and its owner accomplished. It navigated the beauty game and a volatile economy for 20 years and built a successful brand. I’m confident that she will continue to ensure that the brand grows stronger than ever, and for that, the business community at large, and our community, should beam brightly.
Nicole Cober, Esq. is a partner at Cober Johnson, a law firm focusing on trademarks, brand licensing and small business consulting. She is a former small biz owner of the award winning chain, Soul…Day Spa and Salon. She is also a Legal Consultant for Washington DC’s NewsChannel 8 and author of soon-to-be released book: “CEO of My Soul: The Dos and Don’ts of Small Biz.” Follow her on Twitter @CoberJohnson and like her on Facebook @facebook.com/CoberJohnson. Visit her website at www.coberjohnson.com.