Capital Region Business Journal

Company at a glance: Big Toe Soccer was founded in 1994 by Dan Nuthals. HyCite Corp. purchased Big Toe in 2000 following bankruptcy. It has 27 employees and grows to 40 during peak sales seasons in the spring and fall.

Professional history: Joined Grant Thornton in Madison, working in its consulting practice on acquisitions and business planning. Worked for Broadjam for a year before joining Big Toe Soccer. Became general manager in 2004.

A: Well, the very start is get up and kind of help with my daughter a little bit. Help get her going because I don't get to see her again until late at night. So I try and spend a little bit of time with her in the morning. I get in the office between 7:30 and 8. Typically I work until probably 6 o'clock.

Most of my day is a combination of managing personnel and strategic planning, of where we want to take the business. Then I would say a lot of industry coordination. I'm on the phone a lot with the Adidases and the Nikes, with our printer Quad/Graphics, with our competitors. I have a good relationship with our competitors, so I'm on the phone with them a lot trying to figure out trends. The owner of Soccer Post and I talk a lot about some of the trending he sees in the marketplace retail stores versus what I see in the catalogs. Both of us are trying to take market share away from Eurosport and take market share away from the little mom-and-pops around the country. He understands more the mom-and-pops; I understand more about Eurosport.

A: Hopefully get home with enough time to have dinner with my daughter and wife rather than just myself. And if I don't, I spend time with my daughter until she goes to bed, which is about 8 o'clock, and then I'll eat. After our daughter goes to bed, we'll spend a little time together. We work on house projects some of the time to finish painting this room or hanging that picture. It's usually pretty normal, mundane stuff like every other couple, I would guess.

A: When we're not just being parents? We like to travel a little bit. In the winter, we like to go someplace warm, a lot of beach time. My wife likes to play golf, too, so we'll play golf together. She's a big sports fan.

A: What we try to do, with a daughter our age, is get a sitter and so when we go to unwind, it's usually to go see a movie. Movies are a premium once you have a child. We'll go out with another couple. A lot of our friends are in the same position of having young children. We'll get two or three or four couples to go out for dinner or get together at a friend's home or something.

A: I think now that I've had a year to kind of be at the helm to understand a little bit more about the company, certainly our new retail store is a big goal � mostly because our customers locally have been so loyal to us. They've been asking for it. It makes sense, so that was a big goal to get retail going. I would say the next goal we have as a company is to get Nike in a similar position in our sales market as it is in the marketplace. Nike is the No. 2 (supplier) in the United States soccer mix. Some people say someplace in the neighborhood of 30 to 35 percent; they're not even 10 percent of our business yet because they're so new to us. So communicating that we have Nike, getting our customers to understand that Nike is an option is going to make us much stronger as a company and going to help all of our suppliers in theory.

Then I would say to gain market share through our independent sales network. Our independent sales network is able to bring this whole concept to a geographic area and compete with the local mom-and-pops.

Right now our independent sales network, if you took away the rest of our business, is still one of the top 10 accounts in the soccer specialty. I would like to see it a top-five account. If we get within the top five accounts and we continue to grow our catalog the way we have, we'll be, without question, the clear No. 2 in the marketplace (behind Eurosport) and we'll separate ourselves quite a bit from the other people in that mix right now.

I would say the last goal we have is to continue to increase our private-label product presence and the amount of penetration we're able to gain from it. I'm not trying to compete with our branded suppliers, but there's a big market out there between what people want to pay at the higher price points and their other options in the marketplace, which right now, quite frankly, aren't very good from a quality standpoint.

A: Not if we stay at a price point that's low. From a quality standpoint, to be frank, it's probably very similar. I don't think our uniform kit is substantially worse in quality than any of the vendors. From a price point standpoint, we're not going to go compete with them. They're selling the brand. The reason they have to charge so much is because they have to pay for Freddy Adu and for Major League Soccer and Tiger Woods. They have a huge encumbrance upon them from a tremendous effort to advertise themselves. We don't have to do that, so we can take a similar quality product and bring it to the marketplace for a lot less.

A: Initially the answer is no, but if it proves to be a viable, successful option for us, we certainly would look to expand it. We don't know retail. The reason we're opening this up is because it's kind of a no-brainer. I mean, it's right here, we have everyone right here and our distribution center will be attached to it. So the risks are almost nonexistent. If we chose to move outside the Madison area with retail, we would be entering into much higher risk.

A: Eurosport is certainly an obstacle. They're very good at what they do. Because of their buying power, their cost on product is less than ours and if they choose to leverage that buying power, they can drive our prices down quite a bit.

The next challenge we have is selling footwear through a catalog. People like to try on footwear, especially soccer players, because most of them are very particular about what they wear, so that's a challenge to try and grow a business. And the third challenge is always the concern that the real large players (suppliers) will want to go direct on the team (sales). Adidas Team Sports is a division of Adidas, Nike Team Sports is a division of Nike. They go out and do all-school deals. We know the high-profile ones like (UW), but they also do high schools.

That doesn't affect us a whole lot right now, but the question is, is it an indicator of where they want to push their team business? So, is Nike's and Adidas' interest five years from now or 10 years from now to go direct to the clubs and cut people like us out?

A: One of them is certainly using customer market focus groups or feedback. In some way being able to gain feedback from your customer base and say 'What is it that you want? What appeals to you? What do you or don't you like?' To me the biggest solution to all of our obstacles is trying to figure out what it is that people value and then deliver it. And to take a step back from soccer and everything else, that's really all business is. Figure out what people value and deliver it. We have a tendency to make things too complicated.

A: Our solution to being able to be competitive with Eurosport is service. We're not going to beat them on price and, quite frankly, I don't want to. I don't want to go buy business. Few companies can make that work in the long run. It's a service issue and our service really comes from the quality of the people we have and from having the inventory here. Because even though they're a lot bigger than we are, we stock more inventory. We have a better stocking position than they do. So we can turn product faster and we can service people better.

Now, it's a risk on our part and it's expensive. You've got to pay the carrying cost to have (inventory) back there and interest rates have gone up the last six, eight, 10 months. So that's going to put some pressure on us. But we still believe it's a huge advantage.

A: I would say that one of the mistakes I've made is thinking that I understood how to mail a catalog before I really understood how to mail a catalog. Mailing a catalog possibly is difficult to do because it's based on a lot of factors. I think financial people have a tendency to look at things and say 'This is how much it costs. This is how many sales I get out of it. I should do it or not do it.' You have to use a little different matrix in mailing a catalog. So you work on what is my cost per new order or what is my cost per new customer and am I willing to pay that?

If you go to direct-mail experts, they've got this drill, down to the nth degree and they know exactly where their points are, their thresholds. I didn't understand that very well initially and so we mailed our catalog in my first year as GM less cost effectively than we will this year. And mailing a catalog is an expensive thing to do.

The other mistake I've made is I've carried a few too many people. I've seen the growth and I've always anticipated the growth. I've always believed that good people pay for themselves, but I've adopted a little bit too much of a "build it and they will come" mentality when it comes to people. I could have been a little bit leaner and meaner in terms of how many people I've carried. I think your first year running an organization, your biggest fear is that all these investments that you've made to grow the business are all going to pop at the same time and you're not going to be able to handle it.

A: (Getting back) Nike certainly was a triumph. After Nike, I would say one of our biggest triumphs has been re-establishing very good relationships with our vendors after bankruptcy. After bankruptcy, even the (vendors) who opened us back up never really believed in us, never necessarily trusted us. Establishing those relationships again to being good, positive relationships that benefit us has been a big triumph.

A: I think Madison provides a nice environment in general because it's a nice balance of business and what I'll call social or community. I think sometimes you can get too much of a pressure cooker of being all bottom-line drive. ... Madison has a very corporate or conservative fiscal stand on how it handles its business, but a very liberal social stand. So you can do business intently all day long and then you can go to Concert on the Square or to Taste of Madison or go to the Union and go see a concert. And that balance, I think, keeps your employee base pretty well rounded. We don't have people burning out. It's a great environment. The other thing I like about it is it's centrally located. For our business, shipping to all coasts, it's terrific to be centrally located.

A: Because it's grown so quickly, it's a fairly expensive place to do business. Labor costs are fairly high. Property values have gone through the roof. If you're looking to go get a new facility, sometimes that cost is prohibitive and you need to move out of the Madison area. We're lucky we haven't had to do that, but when we were evaluating where we were going to go, I can tell you some communities around here weren't viable options because they're simply too expensive.

A: I think the education level makes it unique. So many people here have graduate or post-graduate degrees. So you're always involved in intellectual-property exchanges that are positive.

If you take the state government and university away, the business community is very small. That's an advantage if you know the business community and you know how to navigate through it.

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