Harvestcare products on shelf

The blessing and challenges of stockists

Choosing to use stockists for our Harvestcare products has been both a blessing and a challenge. Today’s email from one of them just reminded me once again how hard it is from a cashflow perspective to depend solely on wholesale.

I actually do prefer to deal with wholesale orders rather than retail because even though the margins are lower, they buy in volume. Plus, I often get repeat orders without even trying. The direct to consumer model is much harder in my opinion, but I think a healthy balance between the two would be ideal.

Chasing payments

I tend to send weekly reminders if a stockist misses a payment date. I do it personally rather than via automated messages from my accounting system because I tend to get a better response. Most of the time, it’s just a misplaced invoice, but other times there’s a high chance I won’t get paid for products already delivered.

Today, I sent a weekly reminder to a stockist that was late once before but did communicate with me and eventually paid. I was tempted to force them to pay in advance for their second order, but decided to take a chance that it was only a one off issue. I should have listened to my instincts as the first time I met them to drop off extras as samples, they immediately said, “Sorry, I’ll make sure you get paid right away,” even though they weren’t late yet.

When I sent the email today, they replied that they had to close their shop due to matters now in court, but they would pay me soon. I now have a little bit of hope since they did respond, but there’s still a big risk that I won’t get paid.

The first difficult stockist

The first time this happened to me though, the stockist wasn’t as nice. After multiple follow-up emails, I finally called the store and asked for the owner. When he answered, he said that the products weren’t selling, and that I should pick up the remaining stock. He then accused me of pushing product on him, and that the only reason he did order was to “support local small businesses.”

For the record, I only followed-up because he kept telling me to check back, and then all he bought was a $100 box of lip gloss. He wasn’t being fair to me, and I gave him have a piece of my mind in response.

When I finally did pick up the stock, items were missing, and everything was out of the display box and shoved in the crack between the cash register and the counter. Of course, no one was buying the product! He obviously never had any intention of displaying the product properly or paying for even the few he sold.

I had to throw it all away because I had no way of knowing if it had been tampered with.

But most stockists are good customers

Despite these experiences, I don’t want to paint a picture that all stockists are bad. In fact, most are very good, and I have some really lovely wholesale customers that even pay me early. They’re the ones I always prioritise when I get a new order.

If only, they were all this good!

Walking on a thin wall

Risks of running a small business

I’m still trying to process some really sad news I received yesterday. My soap maker’s brain tumour has returned. This not only has devastating impacts on him and his family, but it will likely put our growth plans together on hold as he potentially undergoes chemotherapy. These are the risks of running a small business.

Fortunately, he does have an employee that can continue to do the heavy lifting of soap making. But this does limit any expansion plans this year. This includes our ability to do anything with our big hotel chain client other than the second pilot itself. The ability to expand into all their hotel locations would be impossible at this stage as I don’t have the knowledge or resources to do this work myself.

So, what does this mean for The Refoundry?

It’s really too early to know yet. Fortunately, my best selling Harvestcare products are actually the ones that I make myself, not my soap maker. And his employee can continue to support the soap product quantities he currently makes for me now.

I did ask my hotel client for an update earlier this week (before I heard this news), but haven’t heard back from them yet. I wouldn’t be surprised if a delay in this next pilot would be beneficial for them too while we’re still in the middle of a pandemic.

So, more decisions to come, but it does remind me again of the risks of running a small business in the start-up stage when so much of the operations is dependent on the founders. My own income streams right now are just as vulnerable until I figure out how to scale and create recurring revenue.

Failed product experiments

We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.”

-Richard Feynman

With every inventor comes failed product experiments. For our Harvestcare hand balm as an example, I made over 30 iterations before I found the right ingredient mix.

It takes a lot of time and sometimes supplies to get something right. And some of my friends and current customers have suffered through the trials. I think this is why I procrastinate so much on this important activity.

It also cost money to add products to the line from a packaging point of view. So, I try to limit the downside by only purchasing a small quantity of labels for every new product. This brings up my unit cost of course, but reduces cash stuck in unusable inventory.

Our body lotion product as an example still needs work though I’m pretty close to the end of that development process.

Failed body lotion experiments
Failed body lotion experiments

A number of my experiments haven’t worked at all. For example, I tried to see if I could create some sort of “mochi” single-use soap pods. The idea was that it would melt in your hands before use to eliminate the need for packaging for our hotel clients. So far, that hasn’t worked. Instead, the soap melts at room temperature with no ability to contain it… yet!

Melting soap pods in another failed experiment
Melting soap pods in another failed experiment

I say “yet” because every inventor/designer/developer will tell you that it takes a lot of experiments to find the right solution for hard problems. So, I suppose my failed product experiments are really just lessons learned in disguise with more work to do.

Maker with no time to make

It’s been a really good week for Harvestcare stockist orders, but I’m struggling as a maker with no time to make. In fact, I’m constantly surprised with the reorders because I spend so little time on marketing and sales activities right now. I even had a new unsolicited stockist this week. Still, I’m out of stock for many of the products I make myself.

I blame it on cashflow. I’m doing a lot of not-for-profit consulting work in the IT strategy space to pay the bills. In fact, so much work that I pulled another all-nighter on Sunday to hit a deadline. I know this isn’t sustainable, but it’s necessary right now.

Fortunately, I really do love the mental challenges of consulting again. A good friend is trying to convince me to make this work public as there’s a real need to help this industry. So far, I’ve been living completely off of referrals which has been good. It has allowed me to justify keeping it a secret as I worry about confusing people when The Refoundry is my mission company. Still, my friend reminded me that everyone is wearing multiple hats these days.

She’s right. I will add this to my Linkedin profile when the time feels right. For now, I plan to begin work at 7am tomorrow to ensure that I’m still making even though I am a maker with no time to make really.

2020 on the beach

2020 Lessons Learned

It’s already the middle of January, and I just realised that I haven’t documented my 2020 Lessons Learned. In this crazy year, I’ve definitely had just as many personal learnings as professional ones. So, here they are:

  • Good friends are very, very important! This is especially true for someone like me who doesn’t have any family in Australia.
  • If you keep trying, it will always work out – just not the way you had planned. A year ago, I only had a faint idea that I would be starting a hair and bodycare brand to try to reduce plastic amenities in hotels. Covid got in the way, but we’re getting closer. In the meantime, Harvestcare was born for consumers.
  • I never again want to work by directly trading my hours for money. Even when I do consulting work, it will forever be by the fixed price in the future.
  • Products-based businesses are a bit boring at the beginning (at least for me) with the repeated make-sell-make-sell model. I can’t wait until my business has scaled enough to make it more interesting.
  • If you’re willing to build a business slower, it may not be necessary to bring on investors. The benefit is the ability to maintain full control over the brand – something that I think many entrepreneurs undervalue.
  • Start-ups can be expensive! In 19/20 I invested over $50k of my savings into the business. While I’ve made progress, the company is still a long way off from paying me a salary.
  • Energy is the fuel for achieving everything – not time or money. Managing my energy needs must be a priority if I want to reach my big goals.
  • Creating a podcast is a great way to learn quickly and meet important people, but they’re a lot of work. It’s also tough to grow niche topics especially when channels draw geographic boundaries that make it harder for new listeners in other countries to find you.
  • I’m still not great with my hands i.e. making recycled plastic products for example. Yet, it’s amazing what I have been able to achieve despite this.
  • The marketplace will always decide if your product is a winner or loser. No amount of effort or even lack of effort will change this. If the customer wants it, they’ll tell you.
  • It’s better to be moving in some direction than not at all.
  • “What would a guy do?” This is a question I learned to ask myself whenever I’m feeling self-doubt about a decision. This is definitely something that more women should ask.
  • I actually like doing IT strategy work. When I left the industry years ago, I never thought I would go back. Yet doing consulting work, especially for not for profits, feels meaningful and is mentally stimulating. Plus it’s giving me a nice little niche to help pay the bills while building the business.
  • My sanity is dependent on the ability to exercise outdoors. The 2020 bushfires taught me this more than the lockdown.
  • It takes about 2 years of consistent effort to change a personal brand. Don’t kid yourself into thinking it will happen any faster if you already had a known brand.

I’m sure there’s a few more to add to this list, but certainly this was a pivotal year for me. My 2020 Lessons Learned were the result of my personal journey as an entrepreneur, but also the environmental impacts of the bushfires, hailstorm and pandemic.

I’m not sure that many others can say this, but I actually think overall I am personally better off because of what has happened in 2020. And I feel so grateful!

De-stress through options

Most people will agree that 2020 has been a stressful year. For us locally in Canberra, not only have we dealt with the pandemic, but with bushfires and a damaging hail storm that still has roofs under repair. Still, if there are any lessons I’ve learned, it’s the ability to de-stress through options. What do I mean?

Focus is overrated

Almost every business guru will tell you to become focussed and good at one thing if you want to be successful. For me as an entrepreneur, I found that practice to be very stressful. For about 18 months, I put all my effort into The Refoundry to not only build a business, but to also create an income for myself. While I learned a lot, my savings account took a serious toll.

Option of three things to eat
We all love options!

Then, I started doing consulting work again – this time independently. And I can honestly say that it was the best thing I ever did. No longer was I putting all my hopes into the next recycled plastics idea or hotel deal for Harvestcare. Suddenly, I could breathe again because the personal financial stress was no longer there even if I was working way more hours.

Consulting also gave me my confidence back. I remembered that I’m actually good at a lot of things. It’s just the size of my current business has me in my weak spots. This is something that I will get through as time evolves, and I can bring on more people to help.

Options reduce risks

Finally, dividing my attention reduces my risks. I don’t have to beg for investor money right now. If I can bootstrap my business, I will. When it gets to the appropriate size where I can no longer grow it without outside capital, I’ll consider investors then. For I didn’t start a business to instantly have a boss.

Keeping this financial independence will also allow me to build the company more slowly, but with less risk. A products-based business like The Refoundry was never going to be an Australian Silicon Valley media story. That’s just the way products business are because they are cash flow heavy until you can create sufficient scale. So, now with income coming from consulting work, I am very relieved that I won’t have to depend on a pay check from the business.

My lesson learned therefore is a singular focus for me on anything is too stressful. Whether it’s a singular client, a singular investor or a singular source of income – why put all my eggs in one basket? I personally de-stress through options, and I don’t see the need to focus if options reduce both my risks and stress despite a bigger workload.

The Art of Rest

It occurred to me the other day that I had not gone more than 30 minutes outside my home city of Canberra, Australia since I went to New Zealand last Christmas in 2019. As someone who usually travels overseas 2-3 times a year minimum with countless domestic trips, this is truly been a weird year. But now as we get to the end of 2020, I realise I need to learn the Art of Rest.

Why Art and not the Science of Rest? Because it were just science, it would be easier. I would get my 7-8 hours of sleep each night. I would work less than 45 hours a week. I would get in 30 minutes of exercise every day. If I left it up to science, my life should be somewhat predictable. However, as an entrepreneur, it just doesn’t work that way.

Rest as an Entrepreneur?

Instead, I have to work when the opportunity presents itself. I don’t know if or when it will land. I don’t know if I’ll have two consulting projects accepted at the same time when I get a large order for Harvestcare. I don’t know if my hotel client will give us a contract that starts a chain of massive operational activities.

Over the weekend, I reviewed more than 700 pages of enterprise architecture standards and supplemental information so that I could submit two IT consulting gig proposals on Monday. Was it the way I wanted to spend the weekend? Of course not! Who would? Still, I know that effort would put me in a better position to hit the ground running if they accept my proposals (and of course a lot of much needed cash).

stack of papers
Some of the hundreds of pages of enterprise frameworks and standards I reviewed over the weekend.

Of course, this hasn’t been my only working weekend this year. I’d say 80% have been. I also did three all-nighters this year to meet schedule deadlines – something I haven’t done since my old consulting days, but predicable since I’m once again doing consulting work as a side hustle.

Art of Rest

Since I turned in those proposals two days ago, I realise now that I probably won’t have anymore consulting work until the new year. And it feels…strange. Suddenly, my days are not filled with back to back to-dos and meetings. Instead, I can actually work on the business full-time at my own pace.

With this influx of free time, I’m finding that I’m actually less productive in all areas of my work and life. Instead of working on important business tasks, I’m wasting time sleeping and browsing the internet. It makes me feel incredibly guilty. But then, I had a thought…

Maybe, I need to give myself a break. Maybe I actually need all this sleep and mindless activities to recharge for the next surge of work. Just maybe, I need to learn the Art of Rest.

Recycled plastic workshop space

While I only had it for two months, I’ve decided to close down my recycled plastic workshop space for The Refoundry until I have more time to make these products.

The Refoundry Workshop 1,0
The Refoundry Workshop 1.0

To be honest, I suppose it’s more than time that I’m struggling with. It’s also the frustration with all the technical issues on the tiny projects. I need more time to learn skills like in woodworking or to find the right person to bring onto my team who already has them.

And I’m not in a position to do the larger products until I can find the capital for the machinery.

So, rather than taking up valuable space in my friends’ warehouse, over the weekend I moved the bigger equipment into storage. In the meantime, I can still make some things from home like I did before.

To be clear, closing this recycled plastic workshop space does not indicate that I’m done with this project line. I’m just taking a breather to reevaluate and learn more.

Should I start Business #2?

Call me crazy, but I think I’m going to have to set up Business #2 as my consulting work is getting bigger than I can do alone.

While I’ve been working well past midnight this week getting ready for our first Harvestcare market ever, its actually the consulting work that is taking the majority of my time.

Dozens of Harvestcare bottles waiting to be labelled.
Dozens of Harvestcare bottles waiting to be labelled.

Thankfully, I was able to get a little help from a friend to fill the bottles. However, I still have hundreds to still label and more shea butter products to make before I go to sleep on Friday night.

As for Business #2? I suddenly have a number of clients and potential clients that need help in moving their training programs from face to face to digital within this new Covid world. And while I wasn’t looking for this kind of work, I’m absolutely loving it because I can be strategic, technical and really creative all at once.

In fact, it’s the creative stuff that gets me the most excited. For how awesome would it be to turn a boring Zoom lecture into a fully interactive course online.

I’ve always wanted my own production team (something bigger and skilled than we had at my last job). And with enough contracts I could also help out actors that have been really hurt during Covid.

So, while it may be absolutely crazy to start Business #2 right now, it’s certainly helping from a cashflow perspective. Plus, I’m enjoying the work too. And during these strange historical times, I feel the need to say to yes to almost every opportunity that comes my way right now. For who knows what will actually work?

Funny. Though I’m crazy busy, I’m actually less stressed by having so many fires burning.

Hotel Pilot Starts Monday

It’s been a very busy week preparing for our non-plastic hotel pilot. As mentioned before, this was originally scheduled for April before Covid shut everything down. Apparently local occupancy is back up to 65% or so for this particular hotel. So, it seemed like a good time to try it again.

What this meant was that we had to pack 2500 individual aluminium tins by hand. While I had already packed about half the order previously, we are past the 6 month shelf-life of these all natural products. So, it’s no longer safe to use them.

Thousand of tin containers

I did try to see if I could reuse the tins from the previous batch, but the time it takes to do that (not to mention the difficulty of not scratching or bending them) proved to be too hard. So, at some point, I’ll empty them and put them in my growing “To Recycle” box.

Lessons Learned So Far

So, what did I learn from this experience so far?

  • Packing everything by hand way required us to handle each unit about 5 times each. We could reduce the handling to 3 times if I had the manufacturer separate the lids and bottoms, and we had them printed on both the top and bottom.
  • Putting the labels on the back took the most time. I was able to get the manufacturer to print on the front, but we didn’t have the ingredients list finalised when I put the order in back in February. So, we had to do the back label with stickers.
  • It took over a minute each to unscrew the tins, fill, screw the lids back on and put the label on the back.
  • I’m worried about the quality of the tins. By handling each one, we could notice if there were any dents or scratches, but this will be challenging if a machine was doing the filling.
  • I also now realise that I need to order about 20,000 units of each design i.e. shampoo, conditioner etc. to get even close to the per unit cost I need to make this work financially.

Post Pilot Decisions

From this information, I know that there is no way that we can profitably do the post-pilot packing by hand. We absolutely must invest in proper machines.

We also had a bottle-neck issue with some of the ingredients even though they were coming from Sydney. Why in the world did it take 3 weeks despite many phone calls?

The packaging itself is an issue too as it’s coming from China since there are no manufacturers currently in Australia that make these. Having said that, if we have enough volume, we may be able to change that and even use recycled aluminum which would be great.

If we can do that, I also want to redesign the tins so that we don’t need the plastic liner that sits in the lid. This seals the container to prevent leaks and is standard for most liquid products regardless of whether it’s in plastic or aluminium. However, I feel like there has to be a better way.

Basically this means that if the hotel pilot is successful, and we are able to turn this into a proper contract, I’m going to have to get a lot of capital (either through banks and or investors) to scale quickly. Fingers crossed that all goes well, and that we have this problem!