Kenric Hwang, 49, has a knack for building million-dollar e-commerce businesses. His first was an online camouflage clothing store he founded in 2007, after working as a program manager in the insurance industry. He built it to $1 million in revenue as a solopreneur.
Though Hwang experienced financial success, he yearned for something deeper: “I wanted to start something with a purpose,” he recalls. He decided to launch a business that would help abandoned dogs. He had always been a dog lover and, after his beloved pooch, Neo, passed away in 2013, he became a foster parent to an ever-changing menagerie. As a frequent traveler, he wasn’t ready to adopt another dog.
In 2015, Hwang started Max and Neo, an online store named for Neo and his brother’s late dog Max. The business, based in Scottsdale, Ariz., matches customers’ purchases with an equivalent gift to a pet rescue organization. If, for instance, someone buys a dog collar, the company donates a similar item to a nonprofit.
Kenric Hwang and his dog Shara in Sedona. Hwang’s business Max and Neo donates one item to a pet … [+]
When Max and Neo started taking off, Hwang sold the clothing venture so he could give the new store all of his attention. Today, Max and Neo generates $4.5 million in revenue, he says, and has grown from a million-dollar, one-person business to an operation with three employees.
It’s not always easy to combine passion, purpose, and profit. If you’re looking for ideas on how to do that in a very small business, Hwang’s story offers insights on how to pull it off.
Stay open to problems that need solving. As a pet foster parent, Hwang noticed that when adoptive families came to pick up a dog, they usually did not bring a leash and collar and took the pet home in the gear it was wearing. That left rescue organizations with a challenge: They had to buy a constant stream of new collars and leashes for the foster families. Hwang decided he could help by creating an online pet supply store with a buy-one, donate-one business model.
Keep adjusting your business model as you scale. When Hwang launched Max and Neo, it was easy to donate the exact same item a customer bought to a rescue. However, as the store’s sales volume increased, that became more complicated. “We found out early on if we sold an extra-large collar but wanted to donate to a chihuahua rescue, it didn’t make sense to donate an extra-large collar,” he explains. Instead, the store would substitute a smaller collar.
Gradually, Hwang shifted to donating boxes of frequently-needed items like leashes and collars to dog rescue organizations. This makes it possible to buy in bulk, allowing the organization to accomplish more. Max and Neo works from an alphabetical list of nonprofits to plan the timing of its shipments. “In January we donate to all of the rescues that start with letters A through D,” he says. This helps the rescue organizations to plan. “We used to get emails from rescues, asking ‘Is our donation coming up this month?'” he says. “Now, they know in which month their donations will arrive.”
Build support for the cause into your business model. Hwang measures the company’s success by how many donations it sends out. Keeping up with its substantial charitable commitment requires dedicated resources. One of Hwang’s staffers manages the donation program exclusively, and he earmarks significant space in his 16,000-square foot warehouse, along with shipping resources, to make sure the donations proceed smoothly. This past Christmas, the three-person company and its volunteers packed up 4,000 boxes of dog supplies as gifts for pet foster parents. The shipping bill for the 4,000 boxes alone was $60,000, he says.
Taking on these costs adds to his overhead, but he understood that going in. “I started the business knowing that the profit margins would be low,” he says. “I’m okay with it because of our roots. We were trying to decide how to donate to a dog rescue and built the business around that model.”
Make time for life outside of work. As he built Max and Neo, Hwang missed having a dog to hike and camp with him. Last year, he adopted a Belgian Malinois named Shara. It’s important to have time to recharge with Shara, so he has the energy to keep scaling the business. There’s a lot of work to be done keeping the pet rescue groups on his list stocked up with leashes and collars. “The faster we grow, the more we can donate every year,” he says.
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