Please, introduce yourself and your business.
My name is Pete Draganic, owner of Reflo Ltd, and the inventor/patent holder of the fluid control device used in the Reflo Smart Cup.
How did you start your business?
It was certainly a long time in the making. Having children of our own (my wife and I), I was frustrated with the difficulty of teaching them to drink from open cups.
We either had to give them a small amount at a time, in an open cup, or fill the cup and stand over them each time they attempted to drink from it.
The result was that our meals would sit and become cold as we attended the open cup training for our toddlers. We had 3 children, all under four-and-a-half years old, at one time.
It was something for which I wanted to find a solution. I spent 14 years, off and on, revisiting ideas for something that would function as I intended, until one night, I was fading off to sleep and had again been thinking about the solution to this problem, when I had a eureka moment. I woke up and made notes and sketches.
I then purchased a home-sized mill and lathe combination machine and acquired some machinable plastic.
I experimented with different configurations and the end result worked exactly how I envisioned it.
From there I contacted a patent attorney, made CAD drawings, and set off on securing a patent and having a plastic injection mold made. Several months later we had our finished product and began selling.
Mind you, I knew nothing about manufacturing or marketing. This entire journey was a learn-as-you-go experience.
We also didn’t have a ton of money but were able to get to the point of a complete and market-ready product with a total of $21k invested.
I did a lot of things myself, to save money. Luckily, I’m pretty handy, so I taught myself how to code html for building our website, use CAD programs to make drawings, performed my own patent search, learned basic machining to make prototypes, etc.
How much did you make in your best year?
Last year was our best with just over 1.1 million in sales. Our margin of profit was about 35%
When did you notice traction when building your business? The “Oh S**t!” moment, what did that feel like?
That’s a tough question. We began Reflo as a side business (our primary income was from my small commercial construction company). We sold very little, early on, but began gaining a bit of traction after presenting our product at consumer and trade shows.
I think we were fairly gung-ho at first and had a lot of positive expectations. However, as time went on, we hit a lot of obstacles and reached a point where we felt as if we couldn’t break through that barrier.
Eventually our focus shifted away from Reflo, and it existed as a break-even operation for a few years.
We began pushing more toward trade and industry shows, which gave us a boost. We were mentioned in some publications, which helped as well. Our organic growth was improving.
I could really go on and on about the many little things that amounted to increasing growth and sales.
Then we hit a real bump in the road (no pun intended) when I was badly injured in a car accident. I had to give up the construction business and our primary focus became Reflo.
My wife ran things, without much help from me, as I recovered over the next few years. I had so much trouble with even low-level labor, and mental focus, that I wasn’t much of a contributor.
My wife had found a company which specialized in Amazon reselling. We made an exclusive deal with them to take over Reflo on Amazon and we saw growth, year over year.
However, that growth started to slow right about the time I was able to play a substantial role at Reflo again. I noticed they were not doing a great job with listing quality. I began discussions with them and found their focus was shifting to a line they were developing internally, so I made the decision to bring Amazon sales in-house.
I spent a lot of time improving listing quality and figuring out the ways of Amazon. Our sales increased substantially in the first several months. We then brought on a full-time marketing person and our sales saw a huge surge. We even had one video go “viral” with nearly 16 million views, pushing us to the number one spot on Amazon for a brief period. That was 2023. So far, for 2024, we are on track for a better year again.
By the way, the full-time marketing hire was our daughter, who holds degrees in marketing and accounting.
She had worked for other companies since college and we were finally at the point where we could bring her on at a wage comparable to her previous positions. She has done a remarkable job!
Also…. I almost forgot to include this…. Walmart reached out to us a few months ago and are going to be bringing us into their retail locations across the US, beginning in 2025.
What has been your best marketing marketing channel?
Social media has proven to be our best so far. Working with collaborators/influencers. Interestingly, as great as our social collaboration has been, many of the collaborators have had their best video results from our product.
Time and again, their clips of the Reflo Smart Cup are their most popular videos. We focus primarily on creators who are moms or others who deal with children.
How many attempts at building something did you make before you found what you’re working on now? Did you always have an entrepreneurial drive?
This is the first product we’ve created ourselves, but I’ve always had a very entrepreneurial drive. I have been self-employed for my entire adult life, primarily in construction, but I’ve dabbled in a few other ventures.
Even as a kid I was constantly looking for ways to make money. I would collect soda bottles so that I could cash them in for the deposit. I would rake leaves, cut grass, or shovel snow for neighbors.
As a young adult, I would garbage pick items that I knew a local used furniture store would buy. I would buy things that I knew I could turn a profit on.
What is your biggest overhead expense?
Product manufacturing and salaries.
What’s the most important skill you’ve learned?
I’m not sure if any one skill is more important than others. Running a business, like ours, requires a lot of skills in so many areas.
We deal with manufacturing, packaging, export, taxes and bookkeeping, employees, freight movement, etc, etc. As they say, small business owners wear a lot of hats.
What do you spend the majority of your time doing, in a given week?
For me, I focus primarily on general oversight and dealing with backend/technical needs, which can consume more time than you would think.
We are a family-run business, so I oversee things but let others handle their respective positions.
My wife handles accounts, bookkeeping, commercial/governmental agency client relations. Our oldest son runs our warehouse. Our daughter is our head of marketing. Our youngest son is the only one not working for us, as he is in cyber systems operations for the US Air Force.
What do you know now that you wish you knew when first starting your business?
How to get exposure for your product. You can have the best product in the world, but if nobody knows about it, you won’t sell much.
I’ll share a quick story about our early marketing. Having no idea how to get our product out there, and having very little money for media, we began placing ads on various Craigslist sites.
Our very first sale was to a lady in Akron, Ohio, and she’s ordered a few more times over the years.
What’s a big problem you’ve faced as a business owner and what were the emotions behind it?
It’s a lot of work. There is no clocking out for the day. Emotionally, you start out excitedly nervous but with high hopes. When things don’t go as well as you had hoped, you can become despondent. It really can be a roller coaster.
I am sure I have spent plenty of 80+ hour weeks on Reflo. Even when we’ve vacationed, we spend hours per day keeping tabs on selling accounts, and resolving issues that arise.
What is your best advice for someone who feels completely stuck?
I think I would start my advice with a warning that you need to have a good business head in addition to a good product or service.
You can provide a great product or service, but if you aren’t able to also handle the paperwork, filings, and financial aspects of business, you can sink your entire venture.
I also advise people to not take on partners unless absolutely necessary. If you need money, then borrow it from a lender.
If you need a certain talent, then hire someone who has it. I say this as I’ve seen so many people begin a business with a partner and one of them typically puts far more effort in than the other. This causes a host of issues that you are better to avoid
And these last words of caution… if you assume you’ll have more free time as your own boss, you are going to be very surprised.
That being said, I wouldn’t suggest putting all of your eggs into one basket of a new business idea. Start something manageable and scale up if and as you see success.
Test your idea or product with the public (not your family and friends as they might give false positives because they don’t want to hurt your feelings). Stick with ideas that fill a need and serve a large enough demographic. Do not be afraid to fail, and if you fail, rethink your approach and try a new technique. Treat your customers well.
Check out Reflo cup, here: https://reflosmartcup.com/
