A fledgling Gulf Coast company took its business plan to an M.B.A. class. The results were instructive.
Aqua Mizer, a toilet products firm run by seasoned executives Mike Sisti and Dave Seaman, has been schooled.
But in this case that's not a bad thing. Instead, the Sarasota-based company's business plan was a class project for M.B.A. students at Northern Illinois University in the summer semester. The 14-student class, comprised mostly of working professional adults, broke into four teams and picked apart Aqua Mizer's business model, marketing strategy and operations. The students presented their reports in a Shark Tank-like competition at the end of the class.
Aqua Mizer developed a series of patent-pending retrofitted toilet-based products that reduce water usage in toilet bowls without impacting performance. One part regulates water that refills the bowl after a flush. Other products prevent and reduce leaks. No special tools are required for installation, say Aqua Mizer executives, and the system, which starts at $25, fits into an existing toilet.
The firm has mostly targeted the plumbing and multifamily housing industries for sales, going for volume. But revenues have inched along, with projections in the low six figures for 2013.
Sisti, however, is optimistic a flood of sales will accelerate in 2014 and beyond. The firm, in fact, projects $12 million to $15 million in annual sales within four years, according to its long-range business plan distributed to the M.B.A. students. “We have had some false starts and things fizzled,” says Sisti, “but everything is coming back in a vengeance.”
A big assist in that return is the Northern Illinois University project. Some companies would hesitate to open itself up to this kind scrutiny.
But Sisti, Aqua Mizer's vice president of branding and marketing, says the class project, set up by an Aqua Mizer investor who is friends with an NIU professor, was worth it. “Despite the firepower on our management and investor team, these young entrepreneurs opened our eyes to some marvelous opportunities,” says Sisti. “They reinforced ideas we had but hadn't used. It was a great experience.”
And it was more than an academic experience. Sisti says Aqua Mizer has reprioritized some projects and initiatives based on the students' reports and ideas. That includes reaching out to water authorities in a few states for possible sales, working with its Chinese manufacturer to open up distribution in Asia, and conducting more research to market directly to consumers.
Aqua Mizer also contacted manufacturers and distributors in India after some students, natives of the country, reported on the untapped potential there. “We hadn't put India at the top of our list,” says Sisti. “But they showed us a whole market and how to get to the top of that market.”
Aqua Mizer was founded in 2008, when Erwin “Rocky” Rachwal, a Sarasota engineer, invented the products. Sisti and Seaman, who previously managed a $120 million family-owned industrial coated fabric company, bought Aqua Mizer in 2010. Rachwal remained with the company in a technology role until he died, at 85 years old, in June.
Sisti and Seaman, in addition to a small group of investors, have put at least $600,000 into Aqua Mizer over the past 18 months. The company seeks another $300,000 in capital, mostly for marketing. One of the firm's biggest challenges, though, is one that can take a lot of time, not just money. That's the obstacle of getting from general market acceptance to sustained market penetration.
“Even when (potential customers) understand the product,” Sisti says, “we can't get always them to use it.”