How One Flower Stand Blossomed into a Nationwide Network : Entrepreneurship: Marty and Helen Shih’s flower shop was launched with $500 from their mother in Taiwan. Today, the two immigrants manage a $4.5-million chain of stores and computerized telephone order service.

After selling exactly $2 worth of flowers on their first day in business 10 years ago, Marty and Helen Shih stored the remaining flowers in a commercial refrigerator that they had rented.

“The second day, we came; the flowers were all frozen,” Helen Shih said, laughing.

The brother-and-sister team had to toss out the entire $200 inventory and start over. Between going to school and working at an assortment of part-time jobs to pay the rent, they put in long hours at their tiny flower stand near Olive and 7th streets in Los Angeles.

Today, the two Taiwanese immigrants head She’s Flowers Inc., which averages $4.5 million a year in sales at 12 Southern California stores, including six franchises. Through a computerized telephone order service, the company also delivers nationwide and overseas.

Last month, the Shihs expanded their telephone network into a buying club that offers its members discounts on over-the-phone purchases of items such as cakes, candies and other gifts. The 777-CLUB caters to the growing Asian market with telephone operators who are fluent in five Asian languages.

The Shihs are but one example of immigrants who have followed their dreams across the Pacific and prospered through determination and hard work--with a helping hand from Americans who share their work ethic.

“I feel (that) in America, if you want to work hard, everyone wants to help,” said Marty Shih (pronounced Shee), 34. He came to the United States in 1979 with $500 that his mother had saved and given him. He said he knew from the beginning that he wanted to start a business with his sister, who had come to America three years earlier and was studying to be a medical technician.

“I think one of the things is the language barrier,” Marty Shih said in explaining why he wanted to be self-employed. With limited command of English at first, he said he knew it would be difficult to get a job and make it in corporate America.

With the $500 seed money, the Shihs rented a small Olive Street storefront from Chris Demetriou, an attorney and real estate investor who leased the space at $150 a month, or a fourth of the going rate.

“I looked upon it as a favor to them in the beginning,” said Demetriou, 74. “I’m in business to make a living, but lots of times you bet on people,” he said. “You are wrong sometimes, you’re right sometimes. In this case I was right.”

In the Shihs, Demetriou said he saw two bright, hard-working people with a lot of promise. A Los Angeles native, he said he gave the Shihs a helping hand “for selfish reasons. These people make a contribution to Los Angeles. If you have interests here, some of (their contributions) rub off.”

The Shihs consider Demetriou their godfather. They say he has freely given them business advice through the years. He also is an investor in their 777-CLUB venture. “If we don’t have him, we don’t have today,” Marty Shih said.

Demetriou was the one who suggested that the Shihs sell flowers at the Olive Street store, partly because it would require little start-up capital and partly because Demetriou felt that it would improve the neighborhood.

About a month after they opened their modest stand, the Shihs were puzzled when they sold $100 worth of flowers in a single day. “We didn’t even know it was Secretary’s Day,” Helen Shih said. To celebrate, they treated themselves to a $10 noodle dinner in Chinatown, she said.

That experience taught them one of their first lessons about the flower business: 40% of a florist’s sales for the year are made on 20 major holidays, Marty Shih said. Valentine’s Day is the busiest, with Mother’s Day a close second, he said, adding with a smile, “because everyone has two girlfriends.”

Marty Shih also discovered that the typical shop cannot meet the tremendous demand for flowers that comes on a major holiday, so he and his sister soon developed a system of mass-producing 21 pre-designed arrangements.

Less than two years after they opened their Olive Street stand, the Shihs were running three stores, including a successful one in Beverly Hills, they said.

Their mass production of floral arrangements has earned the Shihs a reputation as the McDonald’s of the flower industry. It is an image they are proud to have.

Standardization and volume sales helped save 60% on labor costs, said Marty Shih, who is a board member on Florafax, a professional association of 9,000 flower shops nationwide. “That’s really revolutionary.”

While some competitors dismissed their approach as not artistic enough, others tried to copy it. The Shihs said their method makes it possible to satisfy customers. Helen Shih said “90% of the customers don’t have anything specific in mind. They just want something nice to send.”

The Shihs also put a premium on customer service. They promise delivery within three hours and guarantee that the flowers will be fresh for five days.

Another major breakthrough in their business came last year, when the Shihs developed a computer program and a network for filling telephone orders nationwide. Through an agreement with American Airlines Direct Marketing Center, they handled telephone orders with help from the center’s pool of 1,400 operators and were able to answer up to 1,200 calls a day per store.

The typical flower store in the country fills 10 to 15 orders a day and grosses $160,000 a year, Marty Shih said, but with the telephone-computer network, the Shihs’ stores fill about 100 orders daily and average $500,000 in annual gross sales.

The Shihs soon transferred the computer network concept to their 777-CLUB, operated by their new Los Angeles-based company, Asian Business Connection.

Brother and sister, who have two older siblings and come from a middle-class family in Taiwan, are an inseparable team.

“I’m an ideas person,” said Marty Shih, a self-described telecommunications buff who is always exploring new ways to apply the latest electronic and communications technology. For fun, he buys and collects toll-free 800 telephone numbers. The numbers cost $20 to several hundred dollars a month to own, but Marty Shih said they could be valuable to businesses that may one day want to use them.

Helen Shih is a petite, soft-spoken woman who loves working with numbers and organizational matters. “She’s sharp,” said Lori Wolf, special markets manager for Hayward, Calif.-based TeleCake, which offers gift cakes through the 777-CLUB and is negotiating with Helen Shih to sell them through a cooperative arrangement with She’s Flowers Inc.

Looking back on their years of struggle, Helen Shih said she and her brother never feared that they would fail. “We started with nothing,” she said. “Worse comes to worse, we end with nothing.”