JoAnn Elardo immediately saw opportunity when she watched the Berlin Wall fall in November 1989 on television from her home on Long Island, N.Y.
Barely 26 years old at the time, Elardo hopped on a plane to Warsaw, Poland. Speaking no Polish, she opened a retail store in 1991 that sold American-made athletic shoes, paving the way for American sportswear companies into the Eastern Bloc.
By the time Elardo sold her Warsaw-based company AmerSport in 2008, it was notching $30 million in annual sales distributing athletic footwear for Converse, Nike and other popular U.S. brands throughout seven central and eastern European countries with about 200 employees.
“You can't take no for an answer,” Elardo says when pressed for the key to her success.
After she sold her company, Elardo retired to Cape Coral to be near her aging parents. But she hasn't given up her entrepreneurial zeal; she's launched Cape Spirits, spending $2 million to build a distillery that will initially make rum called Wicked Dolphin.
Elardo recently reflected on her success, sharing some of the lessons learned:
FILM SCHOOL: Elardo started working at age 18 in the account-transfer department of Merrill Lynch to pay for film school in Manhattan. “I paid for school myself,” she says. After discovering there was no money in the film business, she sold advertising for television and radio. “I love sales,” she says.
SPOUSE SUPPORT: Elardo met her husband, Robert Elardo, while she was working for a radio station in Long Island. He owned and managed sporting-good stores in the area and was supportive of her Polish adventure, helping with contacts in the athletic business. “Bob and I invested everything we had and mortgaged our house six times,” she chuckles. “If you're going to be successful, you need the support of your spouse. You can't have anything negative.”
SPEAK BUSINESS: Elardo says the language barrier didn't hold her back from doing business in Poland. When she arrived in Warsaw and tried to negotiate a lease, the building owner couldn't speak English. Speaking no Polish, Elardo ran out in the street in front of the building waiving a $10 bill, promising the money to anyone who could translate for a couple hours. A young lady stepped up and helped her negotiate.
FIRST MOVER: Elardo benefited from being the first American to set up shop in Warsaw for American athletic footwear. “Nobody knew how to run a business over there,” she says. What's more, when she established her business in 1991, Western comforts hadn't yet arrived. “Not a lot of people wanted to be over there,” she says. But success came immediately. Her first day in business, she sold out of 1,200 pairs of shoes and had to close the store for three weeks while waiting for the next shipment. Elardo sold 30,000 pairs of athletic shoes the first year. After a few years, when a U.S. shoe-manufacturing executive discovered she was ordering 16,000 pairs of shoes annually, he asked her: “What are you doing with the shoes?”
SACRIFICE: Because doing business in Poland in the early 1990s was considered risky (the country was still communist), there were no banks or investors to help finance Elardo's venture. “We slept in a barn for a year; we didn't have any money,” she says.
FINDING GOOD PEOPLE: More than 1,000 people showed up for 10 jobs when Elardo started the first athletic-shoe shop in Poland. More than experience or qualifications, Elardo looks for “hard workers who do more than asked.” She says her instincts tell her more than any resume. “I pick people who have honor,” Elardo says. “All you have is your name.” An 18-year-old she hired that day is now the president of another company of which she's a part owner. “He was holding a mop on opening day,” she recalls. “He really wanted it.”
HONESTY: Especially in the early days of transition from communist rule, business in Poland was cash-on-delivery. “We were honest and we were strong,” Elardo says. “Our word was our bond and we would be in business the next day.”
DON'T BE TOO TRUSTING: Initially, Elardo had to get a local partner involved in the business because Poland did not allow foreigners to own businesses. Elardo hired an accounting firm to screen candidates and settled on an engineer. “It was finding someone who wouldn't steal from me,” she says. They split in 1998 once the Polish government gave permission for foreigners to own businesses there outright.
INSIDE OUT: Know the business inside and out. Consider every angle from a different perspective: customers, investors and suppliers. “You need to know how to pack the boxes,” Elardo says.
GOOD NEGOTIATOR: Elardo says one of her advantages is that she's a good negotiator. “Never say no,” she counsels. And, she adds: “You can't take no for an answer.” Both sides have to view the deal as best for themselves.
PLAY DUMB: Sometimes it pays to play dumb. When shady mafia characters came knocking, Elardo played the dumb American, pretending she didn't understand what they wanted. After some shouting and banging of fists, the shakedown artists would leave frustrated because they couldn't communicate.
AFRAID TO FLY: Elardo confides that she's afraid of flying even though she's traveled on some of the most rickety planes in the sky. She once flew on a Ukrainian Airlines plane where the flight attendant had to secure the door with a rope. At one airport, a farm tractor towing a broken-down bus transported passengers from the plane to the terminal building. Russian planes were the scariest because of the liberal use of duct tape on the equipment. “I never worried about Polish planes,” she says. She ran her business commuting between New York to Warsaw every three weeks.
NOT YOURS: “I never think of my company as my own,” Elardo says. While you might take personal risk as an entrepreneur, consider the risk of your decisions for employees and the company. “You're just one cog in the whole thing.”
TOO BIG: Elardo's Polish company was at a crossroads in 2008. Her suppliers wanted her to expand into Russia with 20 new offices, but that would have required a big investment in a country she considered too risky. While she could have quadrupled her business, Elardo says she was leery of growing too big and sold the business to a competitor instead. “Throwing a bunch of people at a business doesn't make it good,” she says. She's seen other businesses stumble because of unmanageable growth. “They got so big they lost control,” she says. “You need to know when to fold.”
COMMUNITY RETURN: When she was doing business in Poland, Elardo helped bring American sportswear manufacturing operations to that country. “Giving back is really important,” she says. That's one of the reasons she established Cape Spirits in Cape Coral, knowing it would create jobs and use Florida crops such as sugar. “Why aren't we drinking Florida rum?” she says.