First, some announcements:
1. Please be sure to check out the sponsors of the blog over there to the right. Your support of them helps support your favorite bath and body products (ok, indirectly by allowing me to continue advertising, but still...)
2. Directly below said advertisers, are the current sales available in the shop and also a variety of give-aways being hosted on other blogs. If you would like your give-away to be mentioned, please send me an email with the URL and End date of the give away so that I can post it for you :)
And now the meat of the post - The Shops!
Running a business alone has been quite a growing experience for me these last few months. Talk about Trial by Fire - nothing like going it alone right before the holidays to really get your mind into overdrive! First there was time management to be dealt with - how do I continue to do all of the things as one person that two people used to do? And, I have to say, it is just not possible. And so, things like blogging, twittering, facebook, etc... fell by the wayside while I focused on the most important aspect of running a shop - filling orders.
I think I have finally gotten the hang of that one (hehe) - though believe me, I have started implementing changes on how things are done because in the process I made many mistakes. In all reality, just keeping up with orders some days was more than I could handle. 20 orders a day to make a part time income sounds easy enough - *if* you have the stock already made and the ability to put in huge supply orders ahead of time. Christmas season is *NOT* the time to realize you are low on key ingredients and short of funds! I wasted a lot of money (no I will not say how much, its painful) on 2-day or express shipping to get my supplies to me in time to fill customer orders. The end result being that for all that I had a fabulous December for sales - I have little to no profit to show for it.
Lesson learned - stock up in June - and always have a back up plan. You never know ahead of time that your car battery will die 3 days before the end of your Christmas purchase/shipping deadline and leave you stranded with no way to get to the post office in the next town over, because the PO in your town has lost so many packages that you refuse to risk shipping any more packages with them. It's horrifying. Plan for it!
I will still continue to make things in smaller batches, but I will, by the end of this month, have an ongoing stock of pre-made items - things that have no expiration date (soap, solid perfumes, lip balms) I will keep the most of on hand. Things that should be used up within a year of production (scrubs, lotions, frostings, body oils) I will keep fewer of pre-mixed, but there will still be at least 2 or 3 of everything, and double that of the popular scents. This will require some good record keeping, and will also mean keeping an eye on non-moving stock so I know ahead of time when and what may need to be put on sale for quicker movement. All in all, its about becoming organized and more streamlined in operations.
So how on Earth, you may be wondering, can I possibly be thinking about opening a second shop when I'm barely recovered from the holiday season of just one?
Well, that's the conundrum folks. You see, I know what my customers want - and many of you have been clamoring for the baby and kid products back. I know there is a demand for high quality all natural baby products. It's a very narrow market, and so I am banking on the idea that since the market is smaller, it will not see the explosive growth that Heathen's Hearth has seen over the last year (sales this past week are 20 times what they were during the same week last year).
Don't get me wrong, I'd be happy to be wrong about the rate of growth - but I am prepared for it, or at least, better prepared for it than I was for facing the holidays. I truly expected that sales would taper off or die out, and they didn't. I certainly, based on last years numbers, never expected them to continue at a rate of 13 a day right up through Christmas day!
Anyway... for now, my plan is to do a soft reopening of Little Heathen's on Friday, Jan 8. I will slowly start adding in items as I get them made (following the same stock plan as above - everything going into Little Heathen's will be pre-made inventory to start with) and then will gradually build up stock as Heathen's Hearth has the funds to add new items (or as custom items are requested).
My current time-line will allow for a total re-opening (advertised, full inventory listed) by no later than February 1st. Assuming, of course, all goes as planned. First order of business is getting the other 22 packages sitting on the counter labeled, packed and to the post office. 1 day at a time, otherwise Murphy will get you!
Showing posts with label business plans. Show all posts
Showing posts with label business plans. Show all posts
Wednesday, January 6, 2010
Saturday, January 31, 2009
A little more math...
just in case your head wasn't spinning from the last post...lol
Our first month of business, we sold .37 items per day.
Our second month in business we sold .66 items per day.
Our third month in business we sold .43 items per day.
4th - 4.13 items per day (it was november... holiday shoppers abound)
5th - 6.9 items per day (it was december... more holiday shoppers)
6th - 2.5 items per day....
Obviously this isn't enough information to extrapolate accurately how quickly we'll grow as a business... that's going to depend on too many outside factors (like, are we really in another "Great Depression", because, contrary to some peoples opinions, what we sell can be considered a luxury item).
But lets say for the sake of argument...that every 6 months the number of sales we have per day will grow 7 times.
we started out making .37 items per day. After 6 months we should be selling 2.59 items per day (that's fairly accurate as it goes, since I rounded up from 6.57 to 7)
12 months = 18 items per day
18 months = 126 items per day
Nifty. i didn't even plan that... lol. but according to that, if we maintain a steady growth over the next 12 months, by sometime next year we should be making enough sales to open a retail shop...almost exactly... since the previous posts calculations put us at needing 126 sales per day in order to hire people to work in our shop. :-)
Obviously, I don't think it will work that way, because I'm sure there will be slow periods in there, and definately some periods of tapering off, where we hit plateaues (how the hell do you spell that?!?) and level off on the number of new customers we gain. But it gives me something to work with plan wise.
When I take into consideration that I can't really plan anything until we know where we're moving to after The Hubby retires...which is at least 3 years from now... 30 months into this little business venture.
So according to the math, 18 months is what we need. According to life, I'll plan on 36 months.
So my new goal is to open a retail store front by no later than August of 2011... :-D
happy sales ya'll
Our first month of business, we sold .37 items per day.
Our second month in business we sold .66 items per day.
Our third month in business we sold .43 items per day.
4th - 4.13 items per day (it was november... holiday shoppers abound)
5th - 6.9 items per day (it was december... more holiday shoppers)
6th - 2.5 items per day....
Obviously this isn't enough information to extrapolate accurately how quickly we'll grow as a business... that's going to depend on too many outside factors (like, are we really in another "Great Depression", because, contrary to some peoples opinions, what we sell can be considered a luxury item).
But lets say for the sake of argument...that every 6 months the number of sales we have per day will grow 7 times.
we started out making .37 items per day. After 6 months we should be selling 2.59 items per day (that's fairly accurate as it goes, since I rounded up from 6.57 to 7)
12 months = 18 items per day
18 months = 126 items per day
Nifty. i didn't even plan that... lol. but according to that, if we maintain a steady growth over the next 12 months, by sometime next year we should be making enough sales to open a retail shop...almost exactly... since the previous posts calculations put us at needing 126 sales per day in order to hire people to work in our shop. :-)
Obviously, I don't think it will work that way, because I'm sure there will be slow periods in there, and definately some periods of tapering off, where we hit plateaues (how the hell do you spell that?!?) and level off on the number of new customers we gain. But it gives me something to work with plan wise.
When I take into consideration that I can't really plan anything until we know where we're moving to after The Hubby retires...which is at least 3 years from now... 30 months into this little business venture.
So according to the math, 18 months is what we need. According to life, I'll plan on 36 months.
So my new goal is to open a retail store front by no later than August of 2011... :-D
happy sales ya'll
Retail Sales and living expenses
So I was curious about things tonight. I should never get curious. On nights like tonight its bound to affect my sense of self. But I do. I digress.
I went looking at the cost of retail shops. Average cost around Suffolk, Va $14 a square foot, per year - at least so far as I can tell that's what it was looking like - and we're looking at 500sq foot space (which, by the way, doesn't exist in Suffolk, they start at 1200 sq ft, but I digress again). Doesn't sound too bad does it?
That's only 21k a year in rent. Which works out to $1750 a month. Add in half that amount again to cover electricity, gas, property taxes and such, and we're at $2625 a month.
Factor in a good salary, for both of us, say... $20 an hour = $40 per hour x 48 hours a week x 4 weeks per month = $7680
Decent pay for the hired help (I refuse to pay anyone the laughable minimum wage) = $8.00 an hour x 20 hours per week x 4 weeks = $640
Right there we're at a monthly expense of $10,945
Making approximately $6.60 per item (average of all items across the board deducting for supply costs - this is a fairly high estimate)....
that means we'd need to sell a minimum of 1659 items, just to make ends meet.
This of course, does not include annual tax fees, business licensing fees, inspections, permits, advertising, signage, store appliances, storage, shelving, displays, or anything of the sort. We're talking ballpark figures though... so lets say that adds another... oh... $1000 a month..its a nice round number.
To cover those miscellaneous things, we'd need to sell another 152 items per month.
So we're up to 1811 items per month...
and we haven't even covered profit for expansion or whatever else companies use profit for... (what do companies use profit for besides company expansion... lol)
So lets say... we want to make... oh... $500 a month in profit to reinvest in the business...its another nice round number.
that's another 76 items.
1887 items per month. 63 items per day.
This is how much we'd have to sell to make our little "at home" business into a profitable venture that would allow for expansion.
at 126 items per day, we could officially hire people to work in the store, leaving us to creating things and cutting back our hours to something resembling "normal" working hours.
Fun huh?
I went looking at the cost of retail shops. Average cost around Suffolk, Va $14 a square foot, per year - at least so far as I can tell that's what it was looking like - and we're looking at 500sq foot space (which, by the way, doesn't exist in Suffolk, they start at 1200 sq ft, but I digress again). Doesn't sound too bad does it?
That's only 21k a year in rent. Which works out to $1750 a month. Add in half that amount again to cover electricity, gas, property taxes and such, and we're at $2625 a month.
Factor in a good salary, for both of us, say... $20 an hour = $40 per hour x 48 hours a week x 4 weeks per month = $7680
Decent pay for the hired help (I refuse to pay anyone the laughable minimum wage) = $8.00 an hour x 20 hours per week x 4 weeks = $640
Right there we're at a monthly expense of $10,945
Making approximately $6.60 per item (average of all items across the board deducting for supply costs - this is a fairly high estimate)....
that means we'd need to sell a minimum of 1659 items, just to make ends meet.
This of course, does not include annual tax fees, business licensing fees, inspections, permits, advertising, signage, store appliances, storage, shelving, displays, or anything of the sort. We're talking ballpark figures though... so lets say that adds another... oh... $1000 a month..its a nice round number.
To cover those miscellaneous things, we'd need to sell another 152 items per month.
So we're up to 1811 items per month...
and we haven't even covered profit for expansion or whatever else companies use profit for... (what do companies use profit for besides company expansion... lol)
So lets say... we want to make... oh... $500 a month in profit to reinvest in the business...its another nice round number.
that's another 76 items.
1887 items per month. 63 items per day.
This is how much we'd have to sell to make our little "at home" business into a profitable venture that would allow for expansion.
at 126 items per day, we could officially hire people to work in the store, leaving us to creating things and cutting back our hours to something resembling "normal" working hours.
Fun huh?
Thursday, December 18, 2008
The Holidays are winding down.
Ok, so we haven't made it to Christmas yet, but as far as retail goes, the holiday season is coming to a close. Especially for online retailers.
Today is the last day to order from our shop and still have orders out by December 20th, which is the last day the post office says it will take packages and get them there in time for Christmas. We've had a couple wind up taking 8-10 days to get to their destinations. Everyone cross your fingers for us that our packages get to their destinations, in tact and in time for gift giving.
We were swarmed this year. Hopefully we'll be better prepared next year. But given the economy's recent troubles, the fact that we were a new shop (only active since August 1st), and we were relying almost solely on word of mouth, I don't think we really expected to be this busy. Merry Christmas to us. LOL.
So the calender is turning, as it is apt to do in retail life. Your landmarks are the Holidays. Christmas holiday is more or less finished. Next comes Valentines Day, then St. Patricks Day, then Easter, then Summer break...the dead zone of retail. Then we start the calender over again.
The tricky part of this I think, is that unlike other niche businesses, there are only so many holidays where bath and body products are good gifts. Christmas and Valentines day being the 2 big commercial ones (though anniversaries are spread through out the year). The rest of the year its all about matching the scents to the seasons. Trying to stay ahead of what people want, and giving them something new to try about every 2 months or so to try to keep things fresh.
So there will still be some playing with the other minor holidays, to see if we can find a niche market.... (maybe some beer soap for St. Patty's day?), but for the most part, I think our next move after Valentines day will be working out whether we want to continue changing our line up each season, or create a line of specialty signature scents that are ours and ours alone to keep our customers coming back - with periodic new product lines, and special short term scents to round it all out.
So what are your business plans for the new year? Are you still developing your brand? Do you know what your goals are for your business?
Today is the last day to order from our shop and still have orders out by December 20th, which is the last day the post office says it will take packages and get them there in time for Christmas. We've had a couple wind up taking 8-10 days to get to their destinations. Everyone cross your fingers for us that our packages get to their destinations, in tact and in time for gift giving.
We were swarmed this year. Hopefully we'll be better prepared next year. But given the economy's recent troubles, the fact that we were a new shop (only active since August 1st), and we were relying almost solely on word of mouth, I don't think we really expected to be this busy. Merry Christmas to us. LOL.
So the calender is turning, as it is apt to do in retail life. Your landmarks are the Holidays. Christmas holiday is more or less finished. Next comes Valentines Day, then St. Patricks Day, then Easter, then Summer break...the dead zone of retail. Then we start the calender over again.
The tricky part of this I think, is that unlike other niche businesses, there are only so many holidays where bath and body products are good gifts. Christmas and Valentines day being the 2 big commercial ones (though anniversaries are spread through out the year). The rest of the year its all about matching the scents to the seasons. Trying to stay ahead of what people want, and giving them something new to try about every 2 months or so to try to keep things fresh.
So there will still be some playing with the other minor holidays, to see if we can find a niche market.... (maybe some beer soap for St. Patty's day?), but for the most part, I think our next move after Valentines day will be working out whether we want to continue changing our line up each season, or create a line of specialty signature scents that are ours and ours alone to keep our customers coming back - with periodic new product lines, and special short term scents to round it all out.
So what are your business plans for the new year? Are you still developing your brand? Do you know what your goals are for your business?
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