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ENTREPRENEUR PROFILES

8.11.98  
Candleworks: Lighting Up Darkened Lives
Michael and Lynette Richards help disadvantaged workers prosper, too

Entrepreneurs Michael L. and Lynette L. Richards aim to shed some extra light in the world. Their five-year-old business, Candleworks Inc. (http://candleworks.org/) in Iowa City, makes private-label lines of candles for retailers. It also employs people whom society often rejects: the homeless or disabled.

The Candleworks story is something of an odyssey, which began in New York City with the couple's own misfortune. In 1993, Michael lost his job after a restaurant where he worked was destroyed by fire. To make ends meet, the couple, who lived in an all-but-derelict tenement on the city's tough Lower East Side, decided to launch a business in their apartment, one that required little initial overhead. But, in the midst of their own woes, they also had another overarching aim: to help the homeless so visible in New York streets find gainful employment. They spent the few hundred dollars they had on beeswax to make hand-rolled candles.

Soon, the rapid success of their candles and the need for workers to fulfill a large contract led them to approach a soup kitchen for day workers. Disadvantaged workers quickly became the core of their workforce. Their business philosophy didn't come out of a vacuum, however. Both Michael and Lynette Richards have a long history of community service work, volunteer and paid. Lynette, a former store manager, has worked as a teacher; Michael has been director of a settlement house.

SLOW MOVE. A year and several successful orders after they started Candleworks, the couple decided the company needed far more production and warehouse space than they could afford in New York. They moved back to their home state of Iowa, eventually setting up shop in an 11,000-square-foot manufacturing facility. The moving process took a year, because they didn't want to leave their workers in the lurch. "We kept this cottage industry active in New York City during a one-year transitional phase," writes Richards in a book on his endeavor, Light One Candle, published by Innovation Press in Iowa City. "Candle makers in New York continued to work part-time as they gradually found other, permanent employment."

Today, the company offers clients such as the Candleman Corp., a chain of 90 candle stores, an extensive, private-label line including votives, tapers, and a variety of other candles, mostly scented as well as such accessories as glass or tin containers. Candleworks expects about $600,000 in sales this year, and Michael predicts that it will record its first profit in 1999.

Hiring disadvantaged employees requires extra effort on an employer's part, but, the Richardses argue, it brings rewards in a highly motivated workforce. "Since we are willing to commit to our employees, they are willing to commit to the company," says Michael, 48, who with his wife was recently named the U.S. Small Business Administration's Welfare to Work Owner of the Year. "Our employees see their identity as wrapped up in that candle."

RAFT OF BENEFITS. Candleworks' owners may be unusually fervent in their dedication to hiring the disadvantaged, but they are not unique. The Welfare to Work Partnership, a Washington (D.C.)-based business organization, reports that its members -- which range from large corporations to a nail salon -- hired about 135,000 people off welfare rolls last year.

Altruism often plays just a minor role in the movement. For many companies crunched by the nation's labor shortage, the disadvantaged are an untapped market. Another benefit is the raft of local, state, and federal tax breaks, incentives, and subsidies to encourage hiring welfare recipients, among them the Welfare to Work Tax Credit, which is worth up to $8,500 per employee.

Ardent as he is on the subject of hiring the disadvantaged, Michael is the first to say that employers should brace themselves for failures. He estimates that about 30% of his hires quit or are let go, usually because they lapsed back into drunkenness or drug addiction.

Nonetheless, he's convinced that with a bit of effort, employers can help their new employees stick to the work world. In managing their 24 workers -- most of whom were referred to the company by homeless shelters or an agency that serves the disabled -- the Richardses have adopted techniques that owe as much to common sense and compassion as to human resources logic.

HELP, AND SELF-HELP. For one thing, they try to understand how the workers' outside lives influence their on-the-job behavior. Since they can't assume, for example, that Candleworks employees have telephones, the company gives workers a list of places providing free local-phone service so they can call to explain a problem getting to work. Meanwhile, workplace rules -- punctuality, for example, is a must -- are spelled out in detail so there's little room for misunderstanding.

One hour a week, on paid time, all employees attend a meeting on self-help topics ranging from domestic violence to balancing a check book. In some cases, the Richardses rush in with extra help. They have given short-term loans and, in one case, they urged a judge to be lenient with an employee who was on the road to recovery.

Among Candleworks' success stories is Patricia A. Christofferson, 51, who came to the company two years ago, homeless and reeling from alcohol abuse and a recent separation from her husband. Today, she earns $8 an hour, overseeing production and quality control.

"The job has made a world of difference," says Christofferson, who notes with pride that she has been able to buy a mobile home, thanks to her Candleworks paycheck and a low-interest loan that she heard about from Michael. Now, she says, "When I get up in the morning, I want to go to work."

By Pamela Mendels in New York

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