An Honest and Open Accounting of My First Year in Business
As of November 6th I will have been in business for on year. I've decided it was time for an honest look at the past year.
Part of being a small business owner is dealing with a lot of uncertainty and insecurity. One of the ways to cope with this is to hear the story of those that have tread this path before you. So basically I read a lot of other maker's blogs. One of the things I have found most useful is to go back and read the blog entries from when they first started out. I've found that I can glean a little confidence by reading about how they didn't know what they were doing, how they took really bad pictures, and rambled in their posts. There is a lot to learn from those early posts. There is also a trend that I find very frustrating. The posts tend to go like this:
May 21: Just bought our first supplies
June 2: Just got our first order!
June 28: Here is us at our first event
Dec 28: Just landed a contract with Anthropology.
I feel like some important things probably happened between June and December. That is ultimately the problem with life on the internet. Only the good or noteworthy moments get documented. No one ever posts "Accidentally bought $50 worth of the wrong-but-not-returnable hardware today. There goes the tiny bit of profit I had for this month."
So without further ado here is an honest look at my first year in business.
Am I paying the bills? The honest answer is: kinda. In the beginning the answer was a resounding no. My day job was still my main source of income and leather goods was just a little extra cash. Once I made the transition and quit my day job the answer was still no. I was busy enough that my day job was hampering my ability to produce goods but I wasn't busy enough to make a living. Mostly I was pleased that the business was able to pay it's own expenses and not drain our bank account. Without support from my wife I would have had to transition more slowly or have a fair amount saved up. Once the summer show season rolled around I started getting close to making a living. Some weeks I made a lot more than I did waiting tables. Some weeks I was grateful that last week was busy. Little by little I've managed to make more at each event.
Here is where things get tricky. I hear all the time about how it can take years to make any profit when starting a business. That didn't make sense to me. If you start with little or no overhead and keep your profit margin high enough then you make money. That is true, but only if you want to stay the same size. The growing is the tricky part. Basically what I spent the summer doing was thinking "After this next show I'll be able to pay us." Then the next show would go well and I'd have to buy more supplies to make even greater amounts of product for the next show. I was selling more at each show but having to buy more for the following show. Step by step I climbed until sometime in mid-July I was able to both pay us and buy supplies.
The bottom line: Am I making money? Yes. Wright and Rede is in the black despite all the initial investments and the cost of buying new equipment. Hopefully, after the holidays, I'll be heavier on that side of the ledger. I never took out a loan and owe nothing to either banks or creditors. Most importantly I am still making money. It's just that the money left over after paying the bills tends to go towards more supplies instead of leisure spending (IE. crap I don't need).
Let it be on record that I am an introvert. I do not have special skills or training. I'm a normal person doing the best I can. The best thing I've learned here is to apply the if-I-didn't-know-me-would-I-give-a-crap-about-this filter to what I post. The most important thing I can say is to get in the habit of doing it regularly. Try a bunch a platforms and see what works best for you. I like Instagram the most and that is reflected in my followers. (If you are not following me on any of these platforms I won't mind if you take a minute and go ahead and hit that "follow" button. Really, it's okay. I'll wait...)
Facebook followers : 133 (I remember being really desperate around December to get to 27 so that I'd have analytics.)
Instagram followers: 208
Pinterest followers: 37
Tumblr followers: 19
Twitter followers: 55
Lessons Learned in No Logical but Handy Bullet Point Format:
- The tent that you are bringing to a show to provide shelter for you is not waterproof. (!?!?!???)
- Be the kind of guy that has garbage bags (or a waterproof tarp) and duct tape with him at all times. You'll be really glad you carried them around all year on the one day you need them. Optional bonus: People might think you are a professional hit-man. Likely side effect: People might think you are a serial killer. (You win some. You loose some.)
- You can never have enough weights on your tent regardless of what the weather looks like.
- Really good photographs are almost as important as the work you produce. A really good photograph will; entice strangers on the internet to buy your stuff, make blog posts more interesting, get you into better shows, get shared by people who want their blogs to look cooler, look really nice in publication (which will make people want to put you in publications), and make you not look foolish when people ask you what you do for a living.
- If you are accepted into an event it's a good idea to respond by saying thank you and here are some photos for publicity if you need them. Organizers are under a lot of pressure and will use what they have handy when they need something for a flyer or press release.
- If someone asks what you do for a living say, "I'm self-employed." If they want to know self-employed doing what, have an answer ready that is no more that five words. "I make handmade leather goods." Anything longer and they'll start to tune you out.
- I find networking easy because I don't do it. Anytime I've had a five minute conversation with someone and exchanged business cards it has never turned into anything. The relationships I've found to be successful are the ones I've made with people while helping set up their tent, shivered next to them on a cold day, provided a confidence boost when business is uncertain, suggested events they didn't know about, and watched their booth while they snuck off and bought some breakfast. These people are not assets in my network. I just call them friends.
- The best thing I can do when stressed out/lacking confidence/ insecure/ depressed/ or seriously unsure of what steps I should be taking in my future is to go get some real work done. By real work I mean making things out of leather not blogging or updating my mailing list or doing "research". I might not be any more confident at the end of the day but at least I have ten more wallets to sell than I did before.
- To come up with a really good design: Draw out what you want to create. Then start taking things away from it. When you are down to the most simple way to do it: it's ready.
- Sometimes the best business opportunity is the opportunity to walk away from one. Once you start doing business with someone then you are in business with them. To quote my dad on this one "the closer you get to the skunk the more you stink."
- Read blog posts out loud to proof read.
In my best estimation I have seriously burned two bridges, really pissed off one customer, made four things that either broke or were a different size than what they ordered, had 4 shows that were a total bust, and had to respond to at least 20 awkward emails in ways that were not graceful enough to answer successfully.
I have wasted 30+ square feet of leather because I wasn't paying attention, not giving up when I should walk away, creating a bad design, or just didn't know what I was doing. This translates into about $1000 - 2000 worth of ruined leather goods. (ouch! R&D days are hard days.) Additional I have about $300 worth of hardware that has no purpose or will never be used. (I was pretty sure I needed it at the time.)
The take away:
- Not matter how hard you try you can't make everyone happy. Sometimes it's better to walk away and piss someone off than get involved in something that will be bad for your business. The other party will never understand this because they can only see how it would be good for their business.
- Always try to fix what you can. It will usually be waaaaay more work than it is worth but you'll sleep better at night.
- Custom orders tend to be more trouble than they are worth. It is nearly impossible to create what someone else has in their head. (And if they start saying "Oh, since you are changing that could you do this too?" It's time to walk away or raise your price.)
- Only buy supplies for what you are working on tomorrow not for "later." By the time later gets here you'll be working on a different project than you thought you'd be.
- When they day is not going your way, despite your stubbornness, it is usually best to give up and do something else.
- When you really screw up, apologize in sincerity. If possible, look them in the eye when you do so.
- Also, look people in the eye when you say thank you. Doesn't really belong here, but it's worth mentioning.
And to end on a positive note, Successes:
One year ago I raised about $160 in key rings sales to help support those effected by hurricane Sandy. This was the first $160 I made as an official business. My smallest accomplishment but the one I'm most proud of.
There are 500+ people out there that find me interesting enough to follow my goings-on via the internet.
I have stuck to my guns and never taken out any sort of loan.
I have insisted in making things the way I feel they should be made and have managed to get my customer's respect in doing so.
I have been in four separate retail locations.
I have landed my first few wholesale accounts.
I have helped two other people start their own business.
A year ago I was intimidated by the big holiday shows in Cleveland. I felt that I wasn't good enough to be in them. I was hoping that maybe in a year or two I'd be good enough to show at them. Those events were: The Bizarre Bazaar (now the Cleveland Bazaar) , Made in the 216, and the Last Minute Market. Wright and Rede will be selling at all of these events this year.
I've been in three publications and interviewed twice.
I've been on two vacations since starting this business. (I had not taken a vacation in the five years prior.)
I decided to follow my dreams and quit my day job. This might sound all nice and fluffy but it has real world effects. My blood pressure is down (I had prehypertension). I've lost weight. I'm happier more of the time. I'm more focused, driven, and confident. I feel that I'm all around a better person to be around.
I say all this not to brag but to point out what you can do if you put your mind to it. I am not extraordinary. I didn't start with a bunch of money or a special set of skills. When I needed to make money then I found a way. If I didn't have a necessary skill then I learned it. My point is that you really can live your life the way you want if you are willing to truly commit to it.
Thank you for sticking with me this first year in business. I've enjoyed meeting many of you. I've grown in ways I never would have imagined. I'm really looking forward to year two.