By Dorothy de Souza Guedes
The biggest misconception many people have about owning a small business is that it will be profitable and make the owners a lot of money. Working in a small business is more about being part of something that you build – and being proud of it – than making money, said Benz Beverage Depot co-owner Jared Hanlin.
Key to the company’s growth has been a commitment by its owners to contribute their time and talents, particularly when they already work other jobs.
“You really have to love what it is and love being part of the business because the economic return on a small business is very small or very far into the future. You have to just realize that going into it,” Jared Hanlin said.
Benz Distributing began in 2004 as a wholesale liquor distributor and has grown to include a retail store, Benz Beverage Depot, with spirits, gourmet foods and about 1,200 labels and types of wine.
“We still do a ton of wholesale, but the retail has certainly become more of a focus,” said Matt Hanlin, general manager.
Benz is an acronym for the original four owners, to of whom remain. The “E” and the “Z” – Tiffany Earl and David Zylstra – remain, along with Jared Hanlin, who was brought on board to develop Benz Beverage Depot as a retail wine, spirits and gourmet food retail site. None of the owners had retail experience.
The three met at law school, went their separate ways and eventually found their way back to Eastern Iowa.
Earl specializes in marketing, Jared Hanlin specializes in financials, handling the day-to-day financials, such as accounts receivable, accounts payable and payroll. Zylstra focuses on inventory of wine and spirits.
The three owners each have full-time jobs elsewhere, and trust Hanlin’s brother Matt Hanlin to run Benz on a daily basis.
It employs a staff of about 12. Only the general manager and deliveryman are full time.
“We had a vision for what we wanted to do and we just made it up,” Jared Hanlin said. “We have truly learned as we go … and continue to do so.”
One of the company’s biggest challenges include the store’s southeast Cedar Rapids location. While it is considered downtown, it doesn’t get a lot of drive-by or walk-by traffic. There are no restaurants or other retail stores near Benz. The owners have had to learn how to market the retail business as a destination store to help draw traffic into the store. They hope ongoing downtown development will draw more people.
“We still have people asking if they have to buy a membership or if we’re open to the general public,” said general manager Matt Hanlin.
To draw customers Benz offers beer and wine tastings to introduce new customers to various products and its large selection. The company stresses customer service. The biggest Benz event of the year is an outdoor multi-vendor Beerfest in May.
“I don’t think we’re ever going to be the type of store where people walk by and decide to stop in,” Matt Hanlin said. “A lot of (our growth) is word of mouth, whether somebody has come to one of our events or brings a friend in.”
Marketing is expensive, but necessary, for the small business, Jared Hanlin said. He credits Earl as the driving force behind their marketing strategy, which focuses on selective and targeted marketing. It takes a lot of faith and belief in the business that spending now will pay off in the long term, he said.
“It’s hard when you are watching every penny. It’s very difficult to track a return on the money spent on marketing,” Jared Hanlin said.
A small business is typically tight on cash even when it’s profitable, Jared Hanlin said. He is conservative by nature and has had to learn that spending on marketing is necessary to attract new customers and stay top of mind with current customers.
“You can have the best place, but if people don’t know about it then they won’t go there,” he said.
Marketing assistance has come from an unexpected source. TrueNorth partnered with Benz through the Cedar Rapids Area Chamber of Commerce post-flood Adopt-A-Business Program, which linked businesses not directly hit by floods with those that were. That has allowed Earl to tap into TrueNorth’s marketing resources to better focus Benz’s marketing strategy.
The flood also gave Benz owners an opportunity to look at what was working and what wasn’t and come up with a better long-term plan, Matt Hanlin said.
During the three and a half months Benz was closed post flood, staff used the company’s customer e-mail contact list — 4,500 to 5,000 e-mails — to ask customers for input.
Post-flood modifications included a new layout with more shelf space, a coat of bright green paint on the exterior and the addition of a charcuterie, or deli, featuring about 100 fresh specialty meats and cheeses not found locally. Its popularity continues to grow, Matt Hanlin said.
Staff also reviewed what was selling and better focused on top selling labels. It now features 1,200 types of wines rather than 1,600. It’s still that huge selection that sets Benz apart from its retail competition, owners say.
“We have a more unique and specialized selection,” Matt Hanlin said.
Following trends helps Benz stay current with what customers want. For example, in 2004 the movie “Sideways” drew merlot wine drinkers to Pinot Noir. More recently, Malbec and less expensive wines from South America have become popular.
“They always say that the alcohol business is recession proof,” Matt Hanlin said. “We haven’t seen a huge drop off, but we’re seeing that people instead of buying a $20 bottle of wine people are buying a $15 or $10 bottle of wine.”
Benz Beverage Depot
501 Seventh Ave. SE, Cedar Rapids
(319) 365-2556
www.benzbeveragedepot.com