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Small and medium-sized enterprises (SMEs)

Josef Zotter

2nd chance entrepreneurs in action

 

Josef Zotter

Austrian restarter

Zotter Schokoladen Manufaktur GmbH

AT - 8333 Riegersburg

First start-up: a world full of sweet innovations

Josef Zotter was just 15 years old when he went out to train as a patissier in internationally renowned hotels. Ten years later, feeling that his time had come, he returned home and ventured into business with his wife. While their seed capital did not amount to much, their visions were far-reaching - producing baked goods and sweets of a quality never before seen in his region.

"As a young entrepreneur I never imagined that our plans would not work out," Josef recalls. But customers were slow to take to the innovative products, so Zotter decided on an aggressive strategy and began to expand. The first branch was soon followed by three others, largely financed with outside capital.

The market was not yet ripe

Although Zotter had already made a name for himself with his fancy cake creations, his earnings did not measure up to expectations. In the end, with over 40 employees at four locations, logistics and expenses got out of control. "In retrospect, the expansion was definitely youthful levity, we simply grew too quickly", says Josef. He realised that his strategy would not bear fruit in time and that there was no saving the business in its current form.

Limiting the damage - compulsory settlement and clinging to a vision

He filed for insolvency and applied for compulsory settlement, having prepared the step with his tax advisor and contacted his creditors beforehand. This strategy allowed him to save one of the four branches, using its proceeds to pay off the remaining debts.

Although Josef was relieved at the successful compulsory settlement, he could not reconcile himself to the imminent collapse of his dreams. "I had two options," he recalls. "I could have gone on running a small company with a staff of four or five, geared to traditional tastes. But I absolutely refused to abandon my dreams, so I decided to go one step further and develop products that were even more exceptional."

The new start

Josef's new direction emerged from a number of successful experiments and test sales: exquisite handmade chocolate confections. Lack of capital was the biggest obstacle. Compulsory settlement had left no him no funds for investment and his credit standing was lost. "That's the worst that can happen to an entrepreneur," he explains. "Having a product which you know has promise, but not having the funds." At first they had to improvise: abandoned parts of his parents' farm were converted into production facilities for chocolate, and many helping hands joined in to start production, even without machinery.

Josef's instinct had been sound, and sales soon took off. They began to invest in stepping up production capacity and developing new product lines. The family farm gradually turned into a chocolate event world. Today, Zotter Schokoladen Manufaktur GmbH has more than 80 employees, with exports accounting for some 45% of sales. Zotter has received several awards for successful and socially responsible business management.

Lessons learnt: you cannot force demand

"I developed innovative high-quality products and wanted to use expansion to force the decisive market breakthrough," says Zotter. "But a product must fit the times, and I had to learn that you cannot force demand." He now draws on the wealth of experience in business organisation and management gained with his first company. Today he appreciates the experience of failure as a crucial milestone on his way to successful entrepreneurship.

Josef Zotter's advice to entrepreneurs in financial difficulties:

"Don't let yourself be dominated by fear of failure, as this will obstruct your view of the opportunities. If you are afraid of failing, any success will be born of fear. But fear is the wrong motor, the wrong driving force. Unfortunately, too many people bury their entrepreneurial potential after a first failed attempt. You need stamina to learn from your mistakes and try again."

First try

Company founded in: 1987

Business sector: confectionery, pastry shops

Core business: production and sale of exquisite baked goods

Maximum numbers of employees: 45

Closure: 1999

Fresh start

New start: 1999

Company: Z o t t e r Schokoladen Manufaktur GmbH

Business sector: chocolate manufacture

Core business: development, manufacture and sale of luxury chocolate products

Number of employees in 2006: 81

 

Alfred Lanfer

Hervé Lecesne

Manuela Mutschler

Cristian Rovira

Friedrich Stummer

Jacqueline Dubernet

Josef Zotter

Michele Zanor

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