Pivoting again

With my office full of hand and body care inventory, I’ve decided to pivot again. This time, I’m pivoting from a Business to Business model (B2B) to a Business to Consumer model (B2C).

The reality is that I really don’t have a choice as the travel industry has come to a screaming halt without an end date and hair salons are also struggling to stay open. I’m not even sure if my few retail customers will honour their original orders at this stage.

Introducing Harvestcare

So, I’m pivoting and I finally have everything I need to do so except for my website which I’m still working on and will be located here when ready. Doing a B2C model will require a lot more work for selling and shipping, but right now my time isn’t worth anything. Therefore, I might as well give it a go.

After all, that back-up plan I had about finding a job if I couldn’t make it work as an entrepreneur isn’t looking very good right now either. So, I pretty much have no choice now. It’s either pivot and try to do something regardless of this crazy world or risk losing everything.

Pity party

Owning a start-up is unpredictable in the best of times. Now the Covid 9 pandemic has really thrown every one into pure craziness. A few businesses are thriving as people are panic buying and others are filling the luxury of time for people. As for my business, we’re a bit stuck at the moment, and I admit that I’m having a pity party today.

I was notified last Wednesday that the Tile Back team won the Trade Waste Hackathon. Congratulations to them on a great idea to take the left over new tiles from construction projects and turn them into gravel. The ACT Government may still be interested in my idea, but I’m not holding my breath as they’re trying to get us all through this crisis.

The trial on my cape made from recycled polyester went really well with my first hair salon. There were even additional benefits I didn’t even think about before like the fact that it kept the customer dry, and therefore the stylist didn’t have to wash so many capes.

I’ll be trialing it at a different salon later this week. The real challenge is whether or not I should invest in producing the product as most businesses have to tighten their belts to stay alive.

Now this morning, I found out that my hotel pilot will be delayed. There were no surprises really given the impact to the travel industry in the last month or so, but it’s still hard to hear. This is especially true when I just spent most the weekend preparing the order, and I have no idea when this opportunity will be available again. People are losing their jobs everywhere as businesses shut down.

Preparing first hair and body care orders.
Preparing first orders

I know that I’m so blessed to have accumulated a solid savings account that has allowed me to go for this long without a paycheck. However, now I have a room full of inventory that is stuck, and no income for the foreseeable future.

Truthfully, I’m tired and having a bit of a pity party now. I just can’t seem to get a real break no matter how hard I work to get this business off the ground.

Yes, I’ll admit that I just shed some tears, but to be fair to myself, I should feel sad and frustrated right now. Tomorrow, I will pick myself up and look again for more opportunities. Today, I’ll be sad a little bit longer as I mourn what could have been.

Business soft plastics recycling

I’m pitching tonight for a business soft plastics recycling program in Canberra. This is for the CIT Trade Waste Hackathon that’s been going for a few weeks.

I was originally part of a random team that was looking at solutions for excess new tiles from kitchen and bathroom installations. However, I realised that I would be of more value if I proposed something in my own area of interest – plastic waste! Fortunately, the organisers agree to let me pursue that project on my own.

So, I’ve chatted with two manufacturers that I know that make these types of things from recycled soft plastic, and will be pitching an idea to create a soft plastic stewardship program where the plastic is turned into bollards that the ACT Government buys back.

Soft plastic to bollards

I feel like the business case is pretty solid, but whether or not the ACT Government is serious about such changes and is willing to accept a buy-back scheme, I have no idea. So, for the moment I suggested a pilot with 1 tonne worth of plastic which will cost them about $5k.

We’ll see how things go tonight! Fingers crossed. With any luck, we could start the pilot pretty quickly for a business soft plastics recycling program in Canberra.

Coronavirus impacts

The coronavirus impacts have been in the headlines for a while, but now the stock market and currency exchange is starting to reflect the true cost to businesses. Unfortunately, my start-up is not immune either.

It’s taken three weeks to get a quote from an Australian freight forwarder to allow me to ship the packaging material that I need for the hotel pilot. They told me that they were inundated with requests from government for supplies like face masks that had to take priority.

packaging material
Our packaging material

Furthermore, since there are less flights in operation, more supplies are being set via ships. So, space is limited. I’m really running tight on my deadline.

The falling Australian dollar is also killing me as all Chinese prices are quoted in US dollars.

Fortunately, I did find a supply of the exact tins I needed already in Australia, but for about twice the price. I went ahead and bought as many as they would allow me to make sure that we can hit our order deadlines. Whew!

It will be really tight to see if we have the pre-printed tins in time, but at this stage, I will pay whatever price necessary to make sure that we meet our promises to our very first hotel customer despite the impacts to my bottom line.

How the coronavirus impacts my travel industry customers and future contracts will have to be considered in about a month’s time. Right now, I just have to get through the pilot.

First Harvestcare order

Yesterday, I just received my first official order for my big bottle, all natural hair and body care line called Harvestcare. It’s from my mates over at Local Press.

While they had expressed interest before, they didn’t actually put in an order, and I didn’t press for it since the hotel line has great priority at the moment. Nevertheless, it’s not too hard to sell these products too when I already have the base ingredients and only have to change the packaging.

The big challenge right now is with the cost of both the conditioner and lotion which is costing me twice the price of the other products. Furthermore, because there’s a massive bottleneck in the import process because of the coronavirus, I’m having to purchase packaging from wholesalers in Australia rather than direct from the manufacturer in China – i.e. twice the cost too!

So, while I won’t make much money (if any) on these first few orders of both Harvestcare and my hotel line, it’s still progress. And for that I am extremely grateful.

xero versus myob

Pain of choosing an accounting software

I’ve been managing all of my expenses in a spreadsheet up to this point. Now that it’s time to upgrade to a proper tracking system, I never anticipated the pain of choosing an accounting software. I just thought that I would automatically choose Xero because it was taunted as an easy cloud based software. I’d say false advertising.

Between my two business degrees, I’ve taken six accounting classes. As such, I’d say that I’m way above average when it comes to understanding accounting and financial statements. I’ve even been a Treasurer for two not-for-profits. Nevertheless, I didn’t find Xero to be intuitive at all.

In fact, it took me most of the morning to really understand that I would not be able to track my Cost of Goods Sold properly in their system because it can only manage inventory that is bought to resale. Therefore, it lacks the functionality to track direct costs if you are a maker like me i.e. how much does it cost to make one product?

Xero doesn’t have the built in capability. Instead, you have to consider adding an app which may be significantly more expensive than Xero itself, and even then I’m not completely convinced how easy that integration is between the two.

So, I’ve also signed-up to trial MYOB as my accounting software too. I have heartburn about this because we used MYOB at my last job, and customer service was painful. The software was also built as a server based solution rather than cloud, and so it limits my ability to review my financial statements on my multi-devices.

I did a quick search of other software options like Netsuite, but they are way outside of my budget.

The good thing about MYOB is that it does already have a proper inventory management functionality available for makers like me. To really understand it though, I need to spend more time on it as I had a Finance Manager keeping everything on track before, and I only had to review the reports.

If I can afford it, I’d prefer to find an accountant that can quickly get me set up and transfer all of my spreadsheet data into the system. Then, I only have to keep it up to date rather than spending so many hours just trying to figure out how to do this.

Ugh! The pain of choosing an accounting software when I really don’t have time! Still, I’m glad that I waited this long before choosing because I’d likely be stuck on Xero if I considered my earlier needs only.

Hotel Amenity Pilot is a Go

It’s a go for our non-plastic hotel amenity pilot! While I won’t make a dime from this 1 month pilot (and will likely lose some money), it’s worth it to test the solutions that we are considering right now.

There are so many little things to consider such as how easy it is to dent our aluminium tins. About half of the tins from one sample pack that came in via Amazon.com.au showed up with dents or scratches.

I’m also considering the labelling requirements. I want to print right on the packaging from the start, but it costs a lot more to do this with small volumes. However, using a compostable paper labels isn’t possible because it’s not waterproof – a “no no” in bathrooms where they might discard unused tins only because the wet label makes it look used.

Right now, I think I’m going to have to order two lots of tins. Some that are blank, and then I buy plastic labels to hand place on them. And others that have the printing on them from the start. This will allow us to test the printing capabilities during the pilot itself.

The buzz of winning work

It’s strange that when I used to win multi-million dollar contracts back in my IT days, it never gave me a buzz like it gave other sales people. I was more proud of the proposals I turned in that solved a customer’s problems, and therefore it didn’t mater it we won or lost to me even though I would only be rewarded if we won.

For this hotel amenity pilot, I’m excited even though it will likely cost me more than I make to do this. It’s the fact that a hotel is willing to take a chance on my crazy idea that can really reduce the amount of single-use plastic in hotels locally and nationally if I move fast enough. It’s the potential impact down the road that is giving me a buzz. How awesome would it be to literally change the hotel industry’s practices to benefit the environment!

plastic hotel toiletries

The price of non-plastic toiletries

I have another meeting with a hotel on Monday. This one is to discuss a pilot with some of my non-plastic toiletries with all natural ingredients. When I originally did the numbers, I thought that packaging cost was less than the ingredients inside of it. Now I know better.

I have actual bids now with exchange rates, transportation costs, duties, etc. It’s clear that the packaging will be just as expensive as the natural ingredients going into it, especially on smaller volumes. I would need to win an actual hotel contract with guaranteed volumes to be able to achieve any profit even if I sell it at twice or more of their current buying price.

I suppose the good thing is that I don’t think that’s an unreasonable suggestion for them to charge each guest an extra $2 per night to offset the non-plastic toiletry option. In discussion with hotels, some of them seem to agree with my theory.

I also have found a local manufacturing partner. They too would need to scale up to service a contract. Fortunately, they are a young company which makes it more doable than with one more experienced but unwilling to work on margins or try new ideas.

Everyone I tried to outsource the work to so far said that it was impossible to service the hotel industry from Australia with all natural ingredients at a reasonable price. In fact, one business said they could only do it for $2.50 an unit to me which is ridiculous when the average price online seems to be about 32 cents each to hotels now.

I believe it can be done, but I need to pretty much build out the supply chain myself and offer something special that can’t be easily copied by bigger players.

So, here I go trying something new with non-plastic hotel toiletries and all natural ingredients that people in the industry are saying is impossible to do for a reasonable price. If I’m wrong, I could either fail at the sales call or fail in the implementation. If I’m right, there will be a lot less virgin plastic in hotels in Canberra and elsewhere in the future.

It’s worth the effort to know.

Making plastic things

Becoming the maker

I’m not a natural maker. What I mean by this is that I’m not someone who has spent a lot of time making things with my hands. Instead I’ve been the one that typically brings together makers to make something or to achieve a goal.

I’ve been trying to make things from recycled plastic for close to a year now by outsourcing the manufacturing to other people. It drives me nuts that I still don’t have anything to sell because I am so dependent on others with much slower processes.

If I need anything digitally done, I can get it down in 1 to 3 days. Yet, when I’ve tried to get a physical sample of something, it’s taken months. Try to design something from scratch? Months again. Repurpose a private label product? In Australia, it’s going on 2 months of just trying to get the right info because everyone seems to take their time.

I’m starting to realise that I might have to become the maker. It just takes way too long, not to mention cost to get anyone to do anything here. Maybe it would be different elsewhere, but I just don’t understand why the manufacturing process has to be so slow for makers when China can build an entire hospital in a week.

It’s no wonder that we struggle to be competitive against them. So, as I look forward, I think that I’m going to have to be a maker and do more of this myself at least in the short to medium term if I want to see any progress.

Always be pivoting

They say as a start-up entrepreneur that you will always be pivoting. I can totally relate. I have five product lines ideas in progress right now in different stages of development.

At this point, I’m not really sure which one is going to make it successfully through the market testing, and so I’m trying to get through the processes as quickly as possible. The challenge with developing products rather than services is the time it takes to make it.

I have two product lines where I’m still waiting on samples, and I have another where I’m waiting for a potential business partner to say yes. I’m not the most patient person anyway. So, all of this waiting is pretty much torture for me.

At the same time, I have to concentrate on both short-term and long-term income. I can’t survive passed this financial year without personal income, and so I’m in a hurry more than ever to covert one of my ideas into cash.

Last night, I was going through some of my old journals going back to high school. Even then, I struggled with too much structure and lack of control in normal jobs. I had written down business ideas since university. It’s time to make something happen on my own.

Right now I’m dedicating to the philosophy of “always be pivoting” until I find that one door (or two) that finally opens.