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DIY Decking Venture

[ 0 ] Mar. 10, 2014 | SBO Editor

million-dollar-deck-idea

Cool DIY decking product nails down $1 million.

By Chuck Green

John Van Leeuwen and Patrick Bertke started their empire by entering a business plan competition. “Patrick and I decided to team up and enter,” said Van Leeuwen. They came in third among more than 100 entries. They entered another competition and won first place out of more than 100 entries. Before long, they decided enough of the business plan competitions and decided to turn their idea into a business. Thus, UDECX, a DIY decking system that anyone can install in just a few hours, was created.

The competitions “forced us to do a lot of things that we weren’t very familiar with and sort of go outside our comfort zone,” said Van Leeuwen. That included financial projections, marketing strategy and how to raise capital and build sales channels for their DIY decking venture.

GET YOUR PRODUCT INTO THE BIG-BOX STORES

UDECX is a perfect example of how a small business can sell their products to the big-box stores—in this case, Home Depot. It's a good match.
UDECX plans to add additional online sales channels as well as retail locations providing consumer touch points. To this point sales in 2013 have been about $65K, our projections for 2013 are $250K, and we expect to have $1M in 2014.

The product is a modular, portable easy to install patio-decking system; it generally takes two people about two hours to install a 10’ x 10’ patio deck. The system is portable so it can be reconfigured, expanded or even relocated when you move. The components are made in America, specifically Ohio. In addition to the consumer system, there is a commercial application that can be used for tent floors, rental companies, caterers, etc. It's versatile.

Visit the website www.udecx.com to learn more about the Miamisburg, Ohio-based company.
According to the partner, “We wrote our own patent, which was granted in September of 2011. Several of us were laid off from our full-time employment in 2011 and saw it as an opportunity to pursue the project fulltime. We raised 1.5 million dollars from friends, family neighbors and business leaders in the Dayton area to get to the point we are at now.”

They also had to determine their price points early on and what their DIY decking product was going to be. “We had to do analysis of all the competitors to our product in the market and see what our niche was.”

Another hurdle was raising capital and finding investors who believed in their DIY decking product. They worked with an attorney and an accounting firm in Dayton and developed an offering circular, which is the presentation to potential investors. It includes a business plan, team resumes and what investors get for their investment. “In this case, we’re giving them a 100-percent return on their investment, along with an equity stake in the business,” said Bertke.

They also basically held open houses, inviting a number of people, among them friends and families, said Van Leeuwen. “A lot of them are investors in this DIY decking , and we asked them to give us the names of other people, so we did a number of marketing presentations.”

They also conducted two funding rounds to help develop a prototype for DIY decking presentations to retailers like Home Depot and Menards.

One of their investors also provided them with their first office, free for a year, and has introduced them to a number of companies and other investors. “So the term ‘angel investor’ goes beyond money,” said Leeuwen, the DIY decking entrepreneur.

Through a connection via one of their partners, they were able to pitch the DIY decking product to Home Depot. “They called us within a couple of days and said they were interested,” noted Van Leeuwen, who noted that people might spend a year trying to get into big-box locations and “it kind of fell into our laps. As a startup, Home Depot’s probably not the first store you’d want to be in, probably because of the amount of inventory and all of the channels you need to go through. But at the same time, if they come knocking at your door, it’s not an opportunity you’re going to pass up,” he said.

Another important factor has been perseverance. “When you have a business plan laid out, obstacle comes up. You just figure out a way around it, whether it’s raising capital or selling the product, noted Bertke.

Research was key. “We spent two years just looking at the building industry, the products available in the market, and visited all types of lumber yards and big-box retailers, like Lowe’s and Home Depot,” said Bertke. They also researched the Internet to make sure their DIY decking concept was patentable. They did the research.

They’ve also done considerable networking. “Several times, we’d encounter people who’d say ‘this is a great DIY decking idea, but I’m not your guy.’ Then he’d provide the names of other investors who he said would love the idea,” said Leeuwen. Visit www.UDECX.com to learn more.

 

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Category: Magazine, Start Your Own Business, Start Your Own Business Summer 2014