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2000 Small Business profiles
Monday, March 13, 2000
Toys in Babeland
by Sharon Pian Chan
It could have been a scene from "Parenthood." Over the mashed potatoes, turkey and cranberry sauce at Thanksgiving, Rachel Venning told her family her post-MBA business idea.
"My friend Claire and I want to open a store . . . you know . . . for women . . . focused on health . . . and sexuality," she stuttered.
Nine months later, Toys in Babeland opened on East Pike Street on Seattle's Capitol Hill.
You're probably imagining a dark shop with painted-over windows and greasy men in trench coats furtively slinking in. You should be ashamed.
Owners Venning and Claire Cavanaugh call the store a socially conscious business, a feminist sex shop selling sex toys, videos and books.
Back when Venning was in business school at the University of Washington, she realized she didn't want to spend her life climbing the corporate ladder, so she set a goal of coming up with a business idea a day. After complaining about the lack of places where they felt comfortable, she and Cavanaugh hit on the idea of a place staffed with women who would answer customers' questions.
"It's not like you feel ashamed to go in," said Holly Flatt, who was visiting from Montana. "All the other places are dark and dingy. You can't look people in the eye."
Her friend Karen Halverson chimed in: "There's lots to choose from. I like the staff picks. You can pick them up and try them out. It's interactive."
The store doesn't run on the most aggressive business strategy, but sales have grown steadily, and Venning and Cavanaugh have had the freedom to do whatever they wanted to do with the business -- like open a second store 3,000 miles away.
They started on a shoestring in 1993 while working night jobs -- Venning as a Law School Admissions Test tutor and Cavanaugh on the maintenance staff at the Seattle Underground Tour. To finance the business, they pulled together $18,000 from friends and family, even though business mentors told them they needed at least $60,000.
Most of the landlords they approached didn't want to rent to a sex business.
"A lot of people were discouraging because our culture is really sex negative," Venning said. "They're afraid of it, and they think it's kind of gross."
When they finally found a place, they patched and painted the 900-square-foot interior by themselves and furnished it from garage sales and estate sales.
To advertise, they hung fliers around Capitol Hill. It wasn't until October of that year that the two started paying themselves a salary, and in December they hired a third person for seasonal help. Since then, the business has grown steadily.
In 1998, they went to New York and opened a second, 400-square-foot location on the Lower East Side.
"We wanted to go to New York because that's what was exciting for us at the time," Venning said. "We probably could have opened another store in Bellevue, but it wouldn't have been fun. We thought about Portland, but there was already a similar store there owned by women, and it felt mean. Competing for market share would have been a big bummer."
The New York store cost them $50,000 to open. But New York sales now make up 41 percent of total sales -- $1.6 million in 1999. Seattle makes up 43 percent of sales, and the rest comes from online business.
Sales from 1998 to 1999 at their Seattle store grew 19 percent, and the profit margin at their first store was 53 percent. The staff has grown to 30.
Two years ago, they launched a Web site, and their mail-order business grew 138 percent from 1998 to 1999. In November, the two hired a business manager, Carrie Schrader, so Cavanaugh could move to New York and Venning could move to San Francisco. Now, the two mostly serve as the public face of the store and handle big-picture decisions about the business. Venning is writing a book.
"It's weird," Venning said. "For years, I sort of ate, slept and bathed Toys in Babeland. It's like my baby is going to school. It's just strange to have so many people who are doing different things when Claire and I used to do everything."
For now, she's not sure where she wants to take her baby.
"Do we want to become a chain?" she asked. "How big do you get before you begin to get corporate? Back in business school that wasn't what I wanted, and I still don't want it."
Sharon Pian Chan's phone number is 206-464-2958. Her e-mail address is firstname.lastname@example.org.
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