Starting a new business is a dream for many. Raising it from the ground up, though, is a feat that is easier said than done. While wanting to impact lives positively through business is a classic American sentiment, capital requirement follows close on its heels. Prioritizing reinvestment is key to sustainable growth, ensuring businesses can scale and adapt over time. Vladimir Kochnev, the CEO & Entrepreneur of successful health and wellness companies, has demonstrated that businesses can thrive in their own space with meticulous capital management and leadership.
Los Angeles-based Kochnev is a self-made entrepreneur who manages Purus Manufacturing and Herbamama, well-known American brands that have carved a niche in the herbal supplements sector. He prefers to educate himself through open-source resources and application-based concepts rather than traditional education. According to him, hands-on experimentation should be the preferred route to innovation if one is seeking to make a difference in society.
“When I entered the herbal supplement business, I only had $20,000,” states Kochnev. “Money is a crucial factor in building a business. However, managing your finances is a battle half won since running a business involves seamlessly amalgamating several roles.”
Realizing the need for high-quality, affordable herbal supplements, Vladimir Kochnev established Purus Manufacturing LLC. This innovative supplement solutions entity supports good health while paying close attention to client requirements. What started within a 2,500 sq. ft. warehouse expanded to multiple facilities totaling 15,000 sq. ft within five years.
Expanding
Today, the company offers over 100 different supplement products to address the various health and wellness needs of its vast user base.
Herbamama’s vegan and GMO-free products use dried herbs, prebiotics, and mushrooms.
“We were looking to create products with genuine value. There was a dearth of good quality herbal supplements in the market, and client expectations were far from being fulfilled. We envisioned a brand that would make a difference in this sector while catering to clients’ health-specific needs,” states Kochnev. “Though our financial resources were limited, we still managed to make a difference in people’s lives while achieving the outcome we envisioned – meeting emerging wellness needs ethically.”
Purus Manufacturing and Herbamama currently have 819+ unique herbal products under their brand umbrella. The products have become highly popular among users garnering a whopping 1,02,000+ comments on Amazon across the companies’ primary brands. Kochnev’s leadership skills enabled him to transform a $20,000 personal investment and $700,000 venture capital funds into a combined revenue of $52.8 million in half a decade.
Challenges and Business Stability
It took a lot to formulate and realize the success story that Kochnev had envisioned. Success was never easy; achieving business stability and growth took several challenges.
“Dealing with rapid expansion was one of the business’s earlier challenges. It entailed scaling the production lines and hiring more talent. We had to balance the demand-supply gap, and we did it eventually.”
Profits were reinvested in the business to keep it loan-free, a status that Kochnev’s companies have proudly maintained to date. Innovation, constant improvement, and adaptability have played a significant part in overcoming the challenges. Furthermore, he decided to run his businesses with a comprehensive approach that would set them apart. His business is not limited to manufacturing only. It also entails dishing out expert marketing advice and packing recommendations to ensure clients receive the best.
“We work closely with our clients and strive to enhance our brand presence through effective marketing solutions and innovative marketing strategies that drive sales,” he adds.
Capital management was another crucial factor since the initial investment amount hadn’t been much. Kochnev believes the following factors contributed immensely to turning around his companies’ fortunes:
Prioritizing Reinvestment
Kochnev is a vocal advocate of prioritizing reinvestment back into the company when they are at a nascent stage to ensure smooth day-to-day functioning.
“My philosophy is that you ‘feed’ your business before yourself,” he quotes. “Reinvesting profits back into the company—rather than using them for personal lifestyle upgrades has kept us agile, loan-free, and well-positioned to seize new opportunities.”
Prioritizing reinvestment—specifically profits—into a business reduces the need for obtaining loans, thereby keeping the business safe and reducing the financial burden on management. A higher loan amount would put a greater burden on repaying it than using the income to grow the business. This, in turn, leads to lesser capital inflows within the business, thereby stagnating its growth prospects.
Stay Customer-Centric
Recognizing what the customer wants is the key to setting up successful businesses. A budding business should rely on data-driven demographics rather than the personal opinions of its promoters.
Kochnev learned this during the COVID-19 pandemic when he noticed a shortage of clean supplements that supported the respiratory system. Recognizing a real market deal enabled his company to become one of the first brands in the US to introduce supplements derived from mullein, an herb famed for its potential to boost respiratory health.
Today, their mullein product line has over 10,000+ reviews on Amazon, reflecting Kochnev’s long-term vision and leadership qualities.
Invest in the Right Factor
The story of Purus Manufacturing LLC began in a single warehouse measuring 2,500 sq. ft., an area that seemed inadequate once the company started growing rapidly. Today, the facility has expanded to 15,000 sq. ft., spread over six warehouses.
“Simply spending money is not the smart solution,” Kochnev quips. “Recognize what your business needs the most to grow and redirect your finances accordingly. Spending on one entity when your business needs another will never work. For us, having a bigger facility was crucial to expansion, and we did just that.”
Consider Human Capital as an Asset that Appreciates
Employees are the lifeline of any business. Their hard work, competence, and accountability directly affect a business. Recognizing talent that could help fuel a business’s growth is an important factor. Resonating with one’s employees directly affects business growth. Empowering people eases the burden and drives an environment powered by innovation and out-of-the-box thinking.
Kochnev’s trusted team of 35, along with a 10-member team of marketing executives, makes day-to-day operations easier. A capable team will reduce the risk of stagnation and propel a business to new heights with creativity and perseverance.
Focus on Quality
A business is set apart from its rivals based on its offerings. Prioritizing reinvestment in quality may increase initial manufacturing costs, but clients always prefer quality over cost and quantity in the long run. Eventually, having a better-quality product would tip the economies of scale in one’s favor by balancing the increased cost with a steady demand.
“Innovative products that focus on quality provide a competitive edge. In my experience, R&D investments coupled with new product introductions could boost a business significantly,” states Kochnev. “A business needs to interact with its consumer base in addition to combining its innovative practices and marketing strategies to reach new heights.”
Kochnev invested in research and offered wellness products that met the highest quality standards in the industry. Their health supplements do not include any animal products like gelatine or fish oil. Furthermore, they are not tested on animals and are suited to varied dietary preferences.
Scaling for the Future
For Kochnev, the story does not end here. He plans to venture into newer realms and expand his businesses tenfold in five years. Prioritizing reinvestment, his first step would be adding new product lines, thereby scaling the product count to over 2,000 unique wellness products sourced and crafted sustainably. He plans to achieve this by formulating a thorough growth strategy that involves refining their current manufacturing processes, scaling distribution networks, and forging local and international partnerships.
Another facet of business expansion would be to focus on upcoming economies and migrate to new product lines, particularly children’s health and pet wellness.
“My vision is to make herbal health supplements more accessible and affordable for people in the future. We wish to improve lives by offering safe and sustainable supplements while creating job opportunities to boost economic growth.”
Vladimir Kochnev’s journey inspires entrepreneurs who wish to make a difference. His story highlights the classic American belief that hard work, determination, and perseverance make anything possible. He has not only written a success story for himself as an early adopter who wanted to improve the health quotient but also demonstrated that innovation has the power to set a business apart from the rest.
Featured Image Credit: Photo by Vladimir Kochnev; Thank you.
