For nearly 20 years, Michael Penny lived in a communal spiritual compound where he taught yoga, practiced meditation, and sought a life of simplicity. As a volunteer, his only income was a small stipend and he expected to live virtually money-free for the rest of his life. Ironically, he wound up starting his own company in 2003 to manufacture and sell organic mattresses. While he says he hadn’t previously “felt any attachment to his own money,” he is now responsible for the livelihoods of 25 people and sells his products in over 100 stores nationwide and in Canada.
Savvy Rest is a natural outgrowth of Michael’s abilities, values, experience and insight fostered through his work in the ashram – and of the solid business advice he has gathered through the Central Virginia Small Business Development Center.
Michael, a psychology major in college, has always had an interest in human development and self-discovery. At the ashram he facilitated small group meetings and taught yoga, but he also gained valuable business and operational experience as he managed the kitchen, oversaw purchasing, handled bookkeeping, and put together a personnel package for the organization that was home to several hundred people. In 1994 everything changed when the community learned about some serious abuses by its guru. Michael and his wife Heather left with their two young sons and he began assessing a career path. After experimenting in other directions, he found a job with someone else who had left the ashram and needed a manager for his futon store. In 2003 Michael started his own business (The Savvy Sleeper) and put $5,000 on his credit card in order to purchase inventory. Within a year he decided to address frequent customer requests for a mattress that was both natural and comfortable.
Remembering a grandmother’s adage to “live simply in good times so in hard times you can simply live,” Michael proceeded carefully, seeking outside advice as he needed legal or accounting services. Eventually, he recognized he needed counsel that was more comprehensive and strategic. As he notes, “more than half of new businesses start with no big plan.”
He learned about the SBDC in 2009 after Susan Stimart, Albemarle County’s Economic Development Facilitator, told him, “You need an advisory board.” The SBDC has fulfilled that role. He has been impressed that the SBDC is structured to be totally independent and that his counselor offers expert common-sense advice based on her extensive experience. She has “provided me with a sense of confidence so I’ve come to accept that I am good at this,” he says.
The SBDC has advised on various human resource issues and Michael proudly notes that he’s been hiring people who stay to grow with the company. When he once had a major problem with an employee, the SBDC helped the company locate resources to navigate legal, morale and production issues that ensued.
His SBDC counselor has provided him with business specialists for strategic financial advice and to help the company determine how their market is segmented so they can improve marketing strategies to better serve the needs of Savvy Rest’s most effective dealers. As Michael contemplates continued growth, he has consulted with the SBDC about purchasing property that will permit consolidation of production, warehousing and administration in larger facilities.
In coming months, Michael and his team expect to expand their product line to add price points. They are also exploring ways to become more vertical: at the sales end by adding more stores and at the manufacturing end by doing more of their own production. While he’s not ready to consider retirement, Michael also understands the need to begin succession planning so the company will successfully move beyond the “founder’s trap.” He’ll continue to tap the resources of the SBDC when he’s considering “new moves with far-reaching implications such as new store openings or major financial decisions.”
While he’s no longer living the full-time contemplative life he once knew at the ashram, Michael is still teaching, mentoring and supporting the development of others. He brightens when he talks of employees who flourish as his management allows them to express and fulfill their talents. In December 2012, the company created an Employee Stock Ownership Plan. In some ways, Michael has recreated a communal experience that fulfills core values of empathy, health, empowerment and sustainability.