Tuesday, June 9, 2009

The store has $8 and I have $4

The funny thing about success is that the things it leaves you are not always helpful with the bills. This last few weeks has been a little nuts. I will post more about it later so you can understand just how nuts.

This past weekend was our first big festival of the year. Street festivals, triathlons and the occasional indoor show are our best(so far) marketing tool. We can talk to hundreds of people in a crowd that are out looking to learn more, and buy things along with attending whichever event they are at the show for. At these shows we offer sampling and demos of our bestselling products to encourage people to buy on the spot of course, but also to let them know about what we do and to help them become a devoted regular customer.
I wonder sometimes if customers ever realize how hard it is to get a show or festival ready for the public. Since we make many of our products the first step in the plan is to decide which selection of products to make and in which fragrances we should make them in.. then we decide which of our brand name products will work well with our brand. If the show is in front of our store we have to make sure the whole store is fully stocked as well as the tents.
So as an example,imagine if you will: think about all the things that you need if you are planning a birthday party.
You want to make a birthday cake(baking is a lot like making bath products) and you need 12 ingredients, but you have to go to 4 different stores to get each ingredient. You want to decorate the house, but have to go to one store for the tablecloth, one store for the cups and another for the streamers for the room... oops and also the balloons are only available in one store on the other side of town
they are only open 3 days a week and keep strange hours.

This is what it is like stocking the store and getting all the ingredients to make the products. On top of all this? You only need 1 pound of flour but the store makes you buy 10 pounds!

So to make what we need I have to buy too much because there is no choice from the suppliers. We have to make more than we need to make the booth and store look full because customers like displays and buy more if things are attractive. There is one big cash outlay..
Customer service is a HUGE detail for me.. and I make sure we have enough staff to take care of as many people as possible. We sell more with more staff to talk to people, and we can make more people happy with the interaction and information we share... which means they should come back to buy at another time.. Lots of staff for a festival is key.. another cash outlay.

Planning and preparation take a lot of time and staff hours. Designing and Printing cards and flyers, Posting notes and stuff on facebook, the blog, writing up advertising, supervising the staff making the products.. Do we have enough bags? Tissue paper? Credit card slips, pens, tape, rope for the tents..and on and on my list goes.
All of the staff time and all the little things cost money... and more cash flies out the window for prep for the festival...

Getting the picture yet? I know you have to "spend money to make money" but you all know how much time and money my cancer cost the store.. so there is not much left in the bank to do all this with. So at the end of the festival planning and execution what is left? Well, we had to borrow money from a friend to pay all the upfront costs *money out* We had a busy weekend at the booths so the place looked busy and people are still talking about it... *money in* We sold enough to pay for the ingredients we used to make the products we sold(though we only sold about 25% of what we made) *money in* We sold enough to pay for all the staff in the booth and store and the staff prep time.. *money in* Today... we have to pay the staff, and pay the friend back for the loan *money out*... (don't forget we did not sell all the stuff we bought for the booth, so we don't really have enough to pay the loan back)
The math at the end of all of this? With the staff paid and the expenses paid... we made $8 at the festival last weekend and there is not enough left over to pay me for my time. The fridge is almost empty, we have been making bread and cookies instead of buying them. I have no choice but to buy groceries this week... from money in the store's account that should be used to pay some other bill. Because the $4 I have left in my personal account is not going to get me anywhere... remember the birthday party example? Ya, I think that version would have been more fun...

There is no answer to this... I wanted to write about it... this life is far from easy.

1 comment:

Tracy said...

Just a glimpse into the reality of running your own business...it's not as easy as people may think nor is it as glamorous. As always, thanks Noelle, for telling it like it is...

T xo