The Business of Business: A “How-To” for Novice Entrepreneurs: Avoiding Pitfalls (Part 2)

Homemade soap is a hard business to make a profit in. People need only so much of it, and it’s generally not very expensive. There’s plenty of wonderful competition for sudsy stuff, too. So why do it? The reason I like to make soap is that it is such a creative, sensual craft. I like the way the scent of essential oils lingers in the air hours after I’m done making it; designing labels, working on a website and making a brochure are very rewarding as well, which are all good things since I’ve got to do everything myself. Reflecting on my journey, I can see where I’ve missed the mark. If your business can’t cover expenses, it won’t be able to pay your rent, either. It’s really important for creatives like me to put both feet on the ground for intervals of time, especially when it comes to running a business.

Far more elusive than the pleasures of crafting artisanal soap is the economic independence one wants from a business. Sure, most businesses take a few years before they generate profits, but for the foreseeable future, it’s not at all clear that five years of this is truly sustainable for me. So the biggest lesson here is, do your research before you launch a business.

I’m impulsive; I have always been impulsive, but this time, I’m not sure there’s a payoff. Apparently, some of business requires careful planning and consideration. To my credit, I was motivated to get my business off the ground quickly because a venue opened up that I thought was perfect for my product. While it lasted, it was great. Unfortunately, the market was canceled shortly after it started, leaving me with plenty of supplies, unsold product and big bills. I had invested heavily in naming, licensing, branding, a website, booth supplies, including a table and canopy tent, and the biggest hit—liability insurance, which is nothing to sneeze at! After the second market I was painfully aware that I wouldn’t recoup the costs for those things for some time. Other markets had fees so high they were punitive and restrictive. On the other hand, all the items I acquired for market are durable goods, which won’t perish and can be potentially reused or even sold. Since they’ll keep, I’m not completely disadvantaged. I was also happy that I procured high-quality, attractive and easy to store and handle equipment: I don’t need to rent a truck and hire a crew to go to a street fair.

Please don’t be discouraged! I’m not trying to sour anyone on kick-starting a dream. After all, one has to be willing to fail in order to experience success. I’m sure this will not be my last time starting something special. It’s in my blood now. Definitely, follow your dreams, but keep both feet firmly planted.

Here are some more really simple tips for entrepreneurs just starting out:

  • I know I’ve said this already, but it’s totally worth repeating: Do lots of research before you get your license. There are quite a few steps involved, and you’ve got to be ready for fees associated with the paperwork before you even qualify.
  • Budget first. This is easily the most difficult aspect of running a business. Obviously some bookkeeping or accounting skills would be useful. Consider taking a class before getting started.
  • Recruit help! I definitely could not afford to pay anyone to work for me. (Payroll is an entirely different monster to contend with.) If you don’t have a loan to help with start-up costs, you’ll need friends and family or a business partner to donate their time. They can help with product testing, distribution and sales. If not, you might find yourself trying to do everything by yourself. I was fortunate to have a great crew of friends who helped me on market days and beyond.
  • Think about venue/retail Do you want to sell door-to-door, open a storefront or have an Internet business? Would you prefer to sell one at a time or sell by the dozen? I never asked myself these questions until I was already committed. The answers to these questions may lead to different strategies for marketing, product labels and profits.
  • Don’t forget to have fun. If you’re not having fun, you’re in the wrong business.

Maybe I need an MBA. In retrospect, I might have taken the hard way around. But the way I see it, life’s an adventure! Here’s me on market day in San Francisco last year:

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http://majesticgardensoap.com/

The Business of Business: A “How-To” for Novice Entrepreneurs (Part 1)

 

 

This year I started my own business. I had some time on my hands and a hobby, from which I derived a great deal of joy. The journey has been both rewarding and incredibly challenging. Even a humble business requires enormous amounts of capital, mental and physical energy and time. Still, I wouldn’t go back. It’s a powerful creative outlet, and I absolutely love it when people tell me that the soap is wonderful. Here’s a picture of one of my newest soaps:

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I’m so pleased, in fact, that I want to share lessons learned and insights gained with readers. Because a small business is usually about a desire to be self-reliant and independent, it’s critical to know what’s on the other side before you set out. We all want to thrive. Why should financial independence be the exception?

 

Here are some really simple tips for entrepreneurs just starting out:

  • Do lots of research before you get your license. Once you get started, it’s difficult to slow down, and you may not be financially or mentally ready to start, even if you do have a great idea.
  • Find a mentor. If you know people in your field of interest, make a connection. If you’re totally new to the industry, make time to attend some workshops. Be creative: Mentoring can be as simple as investing in some books written by a respected and experienced person in your field.
  • Save Money! There are probably more hidden costs than you can imagine. You might need supplies you’ve overlooked, or even a canopy tent for sales. You might buy packaging that simply doesn’t work or need liability insurance. It’s shocking, but little expenses add up. Having a cushion, or even regular income until your product takes off, is a must if you want to see your venture to the end.
  • Lastly, find and follow your passion. This may seem simple, and it is true, but often overlooked. Chances are, if you’re not excited, it’s going be very difficult to get other people excited. Plus, passion will help you get through setbacks, tedious paperwork and the profit-less periods, which are, unfortunately, inevitable. The best prescription here is heart.

 

I’ll be sharing more about other business-related topics, such as business blogging, using social media and getting a domain. These are just some of the things I’m learning by running a small business. In the meantime, you’re invited to my business blog to see just what I’ve got going on at Majestic Garden!

 

http://majesticgardensoap.com/

 

Don’t forget to let me know what you think!