Wednesday, August 4, 2010

Business Planning vs. Flexibility

This is the second post in a series about beginning your own business.  You'll find the first post HERE.  I am not an expert, but I am willing to share some of the lessons I have learned over the years in beginning and running my own candle company.

It would be amazing if we could lay out our business plan and then put it into action with each and every detail working out exactly as we anticipate it will.  However,  I know of no one who has done this.  I think the evidence of this is the constant adjustments and changes we observe in well known franchises.  These are the most consistent of businesses, right?  We know what it will look and taste like from one city to another, however, even there we see regional differences.  Pay attention and you will see them testing items in one site but not another.  So many factors can make a difference in results.
There is a need for constant adjustments and change.

Sometimes it is the economy or some other external force that influences outcome.  In others it may be simple culture/geography.  What works in one place may not work in another.  What may work one year, may not work the next.  I learned early on that just because one candle type sold like crazy at a craft show one week it was not guaranteed that this candle would be popular...at all....the next weekend.  Frustrating!  
It makes it hard to plan.  
People can be fickle.

So then, this lends the question, how in the world does one make a business plan if you cannot expect to follow it?  Well, your plan is exactly that.  It is what you plan to accomplish and the budget with which you believe you can pull it off.  This means that you will have to put some time into ....are you ready? ....Research!
Sorry, I know I say that a lot, but it is true.  What is realistic?  If you are going to go into business making jewelry you are going to have to know what the components are going to cost you.

Also....

Are you going to advertise?  
How much will that cost?
Who are you trying to reach?

Web site?  
Can you do it or do you have the expense of 
an administrator?

Are you taking these items to a craft show?  
How much is it going to cost you to rent a space? 
  
Renting Retail Space?  
Early on we found ourselves placing candles in various retail spaces.  Most were simple consignment.  One was a rental space.  We lost a lot of money on that one.  The monthly fee and the damages were simply eating away more than we could ever make in that particular space.  I no longer even seek to place candles in retail settings.  Direct sales and Fundraisers have been the solution for Good Neighbors Candle Co.  So you'll want to take into your consideration how fragile your product is when considering whether you are willing to trust it to a retail space.
If you are considering retail spaces you need to ask:

How will your items be displayed? 
Who will be responsible for damages?  
How long will you be locked into a contract? 
So many things to think about....but do not dismay!  
It sounds worse than it is. 

Pearberry in Antique Glass
When we began our candle company we were basically clueless.  As you may recall we had a tea candle that we loved and learned to make.  Then we decided to specialize in other beverage candles.   So we added hot chocolate candles, pink lemonade with ice cubes, cola candles in Coke glasses with ice cubes and iced tea.   These were a blast to make.   We made gel candles in wine glasses and sold a few.  However, we would go to craft shows and watch the candle makers with jar candles sell them one after another.  I would struggle with this.  Why was it that potential customers would tell us how beautiful our unusual candles were but then walk on by to purchase a "plain old" jar candle?    
We began getting hints.  I would hear them say, "I love it, but I don't know where I would put it."  Sometimes, they would be afraid of the delicacy of the containers for fear they would break.  Oh, we had some faithful customers who had tried them, loved them and then came back for more.  
But, there was not enough profit to continue with our initial plan.

Keep your ears open...invite feedback.

Pearberry scented candle in a small vintage creamer.
So, we kept this line and added jar candles with adorable daisy lids.  It didn't take long to see the difference in our sales, much to my chagrin!  But, you know, sometimes you have to move on.  So...we stopped making all except the hot chocolates, cola candles and the occasional tea cup.  We brought in more and more lidded jars.  I recently had to stop making the cola candles at least temporarily.
   The original oil we used was soooo real. 
People swore they could smell the "fizz".
But, that oil was reformulated and no longer 
is guaranteed safe in gel.  
Bummer!
No question,  safety trumps sales.

This points out another factor that you have little or no control over....suppliers.  
This candle season my nine ounce hexagon jars 
will have gold daisy cut lids 
rather than silver because 
I can no longer find them in silver. 
It can be a bit frustrating.
But learning to plan ahead and 
roll with the availabilities helps.

Some questions that will help you sort through things:
How willing are you to eliminate the 
things that don't sell for you?

Are you so emotionally attached 
to your product line that you 
take it personally when 
something doesn't sell?

How often do, or will  you evaluate 
what is selling and what is not?

How about the financials?  
Are they working for all of your products?  
This is a hard one for me.  
I  get emotionally attached 
and am slow to give up a candle style that
 isn't making a profit.  

Oh my, I have prattled on...
I hope that you now have a few 
additional things to think about as
you launch your new endeavor
or reevaluate your current business.
My wish for you is that you would develop a business plan.  
Break down the costs. 
Figure out how you plan to market your product and set goals for yourself.  
You'll be amazed at how much more activity you'll see simply by having a written goal.
You will take yourself and your business more seriously...
leading others to do the same.

I expect to have another post on this topic
next Thursday.  In the meantime feel free to
leave me questions in the comments.

I loved hearing from those of you who are new to
a business of your own or considering one.
I look forward to hearing how things go for you.

Becky K.


8 comments:

Marydon said...

G'eve Becky ~ These are all fabulous thoughts & tips to any business person. Really sweet to share ...

Hope Chelsea is doing well, give her a huge hug for me.

Have a lovely eve ~
TTFN ~ Hugs, Marydon

Ronda said...

What a small gal you are!
I wish I could do something like you have.

Thanks for sharing.!

Love & Prayers,
Ronda

Persuaded said...

I've noticed some of these things to be true in my own tiny fledgling business... the cover that is hands-down my most popular one, is something I just made up on the spur of the moment to kind of fill in a space, is you know what I mean. That cover sold out quickly and I have had gals asking me when I'll have more ready. But some of the others that I was sure would sell are just sitting there, lol. I like your advice not to get too emotionally attached to certain products.... well I don't exactly like it, but I know that I need to heed it! ouch;-)

Thanks for doing these great posts Becky♥

Elena said...

Once again, this is great information. Thank you!

Maurie@GraciousInteriors.blogspot said...

Great tutorial. I can emphasize with the nostalgia which keeps you hanging on. A creative idea is hard to let go of. I find that with my writing. I have recently launched a speaking ministry with two friends--Gracious Interiors Ministry. It is hard to know what the costs will be until you are in up to your knees. :) Thanks for your advice. I will put it to good use!

Kelly said...

I am finding these posts very interesting and informative. I don't know whether I will ever attempt to start my own business or not. I have toyed with the idea on several occasions. We'll see. Thanks for sharing.

someplace in thyme said...

I came on to your blog through the rooster party and decided to stay. As I began to read what you had posted, I see you are a candle maker. Of course, I have never met anyone that didn't love candles and so I decided to stay a bit longer and see what advice you were giving out. You have touched on many points as if talking to me face to face. As a small website owner I have to ask myself some of the questions you have put forth. I wish you were a neighbor!!! I used to do the show curcuit when I was actively weaving baskets, but out here in the west, shows are so expensive that I had to give it up. Made in China didn't help either. I have found a new niche that I love and am treading on. I look forward to building a blog friendship with you if you will have me. Thanks so much, Char

Chicken Wrangler said...

Very good post, and useful information. Checked out your blog for the Rooster Party and had to keep on reading down the page!