The name might strike some as repulsive, unless you’re a dog owner: PoopBags.com.
“It’s the most common term for them,” says Paul Cannella, an advertising salesman who launched the site in October. “One of our competitors is ‘Oops I Pooped dot.com.’ If poopbags.com bothers you, then that’s off the charts.”
Sales of the biodegradable bags are starting to take off since the Chicago-based site landed the top two spots on Google for the search terms “poopbags” and “poop bags.” Cannella now recognizes he needs a business plan to grow his promising enterprise.
“I’ve taken a lot of different notes and jotted down a lot of my ideas, but they’re not organized into a plan,” says Cannella. “I need to plan what we’ll be doing 30, 60, and 90 days out, so we can concentrate on what needs to be done at that moment.”
“A business plan gives you these checkpoints of where you should be along the way. We can adjust at the 60- or 90-day marks, but we need a path to follow.”
Stumbling On It
Like many business owners, Cannella stumbled on his business opportunity. Searching online for “poop bags” two years ago, he discovered there was no retail Web site built around the name.
A search for the owner of the domain name “poopbags.com” led Cannella to a London-based cybersquatter. He bought the rights to the name for $800 in mid-2004 and spent a year on development before the site went live.
“This will be the most popular name in the category. What will differentiate us will be the positioning and the marketing,” Cannella says.
At the moment, his biggest online competitor is the cumbersome-sounding dogpoopbags.com, which sells typical plastic bags, Cannella says. He opted to sell bags that decompose in 40 days when composted and a year when left to the elements. He anticipates that a large segment of buyers won’t mind paying marginally more for an environmentally sensitive product.
Cannella is now reselling a leading manufacturer’s bags, but he plans to eventually launch a private-label brand of his own. One part-time employee helps with order fulfillment, and Cannella recently enlisted Hal Shipman as vice president of marketing to help expand the business.
“Because we’re small and our resources are so limited, mistakes will cost us a huge amount,” says Shipman, 42, a former software developer. With a business plan, “we can avoid wasting capital and maximize every penny we have.”
A first step for Cannella and Shipman will be to assess the size and scope of their market and how they’ll position themselves within it. Cannella says he’s been unable to find any information on overall global sales of poop bags, or projected growth rates.
The company also needs to determine where it wants to make a bigger push — in sales to consumers or institutions such as park districts and local governments. Shipman expects many U.S. municipalities will do what Ireland’s national government did and ban the use of nonbiodegradable dog-waste bags.
In creating a business plan, Cannella and Shipman hope to answer a host of questions: At what stage should they secure financing? What type of facilities do they need? What should their advertising strategy and budget be?
“The goal [of a business plan] isn’t just to secure financing,” Cannella says. “It’s: ‘Three years from now we want to be at this revenue level. These are the markets we want to be in and this is how we get there.’”
In the meantime, the pair is encouraged by the increase in sales, which reached $1,000 in February and are on track to surpass $3,000 in March. The company sells a one-month supply of bags for $10.95, a three-month supply for $24.95, and a year for $59.95, with free shipping. Cannella, who advertises in the Sierra Club’s magazine, is convinced sales will grow rapidly.
“If you think about it, there are a little over 900,000 Sierra Club members and 60 percent of them are dog owners,” Cannella says. “If we get just 1 percent of those dog owners, that’s about 5,500 orders.”
Selling a year’s supply to that many buyers would yield $330,000 in sales. “And that’s just one source,” says Cannella. “The numbers on this can add up extremely quickly.
“Now we just have to chart our path and march down it.” And, of course, avoid stepping in poop along the way.