Ever have a Saturday like this?

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Ever have a day that starts out great and ends so badly? My rookie mistake yesterday was so dumb, that it was time to bring out the margaritas.

  • Spanish class with Fernanda
  • Wrote blog post
  • Canoe Polo training
  • Stopped by the local volunteering expo to scope potential guests for the podcast
  • Haircut
  • Updated Harvestcare store pricing on website
  • Went to storage shed and picked up everything for my last Harvestcare markets tomorrow.
  • Checked the battery on my credit card machine and then realised that it wouldn’t authenticate because it’s tied to my old phone. Square customer support is only 9-5 Monday to Friday. F$ck! Drank the rest of the tequila and decided to watch the federal elections.

Balance of purpose and financial sustainability

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I spoke to an old friend of mine the other day, and she reminded me of my first business attempt. It was a home health care business where six older adults would live together in a shared, single-family home with a live-in carer. This was essentially the middle ground alternative to the cheaper aged-care facilities and the most expensive, full-time, in-home support.

At the time I was living in Los Angeles where the regulations and experiences around these models were proven, but still new to the rest of the country (and world). Now they are very popular.

My friend asked what happened to that business idea, and I told her the truth. I couldn’t find the balance of purpose and financial sustainability. In that particular market, the majority of existing owners had overseas workers (likely family) acting as caregivers. When I ran the numbers with paying staff fair wages, I couldn’t get the numbers to work unless we could buy the houses for a steal. This was completely impractical during the real estate boom of the early 2000s before the GFC. And so I abandoned the idea after getting licensed because the P&L didn’t make sense.

I’m glad I didn’t press go as it had a lot of financial risk, but I also regret setting up a company structure and investing in the creatives before I had all the numbers as it was a complete waste of time and money.

I did end up pivoting to a different business idea that had a better balance of purpose and financial sustainability, but I had to go through a formal business name change. And all the creatives I had developed including logos for the health care business were useless.

Did I learn my lesson from this business mistake? Honestly, no!

I’m the kind of person that loves the creative part of a start-up. So, I still tend to overthink the branding at the beginning. Then, I get bored with the day to day operations once the real creative part is done. This impacts the potential for real growth because I’m not motivated enough to push through the more financially difficult times.

The only time I’ve been able to get the balance of purpose and financial sustainability right for my own businesses has been when I’ve done consulting work. That’s because every project is so different and it requires creative problem solving. It’s incredibly challenging and mentally stimulating which makes it fun for me (yes, I know I’m weird!).

So, hopefully after my many attempts to create other businesses in the past, I’ve finally learned my lesson and know that consulting is my thing. Any endeavor I do outside of that (like my podcast) has to be related to this work.

Lessons to take from my story:

If you want to start a business, especially one with a strong social mission – don’t be like me! Get the balance of purpose and financial sustainability right from the beginning and know what kind of work motivates you out of bed each day.

Turning the Page

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It’s been a few months since I last wrote a post here. During this time I have been very busy with my consulting practice. I have also been thinking hard about turning the page in my book of businesses and starting a new chapter.

Those of you following this blog will know I have been considering this for a while. However, I have finally decided to sell the Harvestcare product line and shut down The Refoundry by the end of the FY.

My reasonings for selling this business are many:

1) Failed to achieve the mission objectives

I’ve written about this before, but I don’t feel that I am meeting the original mission of the business to reduce plastic waste. While we could have done that with the hotel line of Harvestcare, the consumer line is doing well for different reasons: the products use locally produced, all-natural ingredients – effectively delivering a different mission.

Unfortunately, the hotel demand is unlikely to recover soon when the pandemic still causes so much uncertainty. Furthermore, all the other products lines we have tried have failed to find market fit.

2) Misalignment with my strengths and passions

My goal was never to be a hair and body care product maker. It’s not my natural passion though I enjoyed the formulation of new recipes to some extent. The day to day of making and selling is actually very tedious to me.

As such, I’ve often found the fulfilment of orders to be a burden rather than a win. There are other people who could enjoy and run this type of business much better I ever could.

3) My consulting practice is growing fast

My consulting work is keeping me crazy busy and it’s growing fast. I provide IT investment strategy advice to Not for Profit organisations. It’s a niche set of skills that the industry really needs, and I know that I am making a positive impact on these organisations in way that no one else can because of my unusual background.

If I can just focus on Roundbox Consulting rather than trying to fulfill Harvestcare orders too, I feel like I could really grow that business and help even more organisations. Plus, I love this kind of problem solving work so much that I weirdly enjoy the “hard” parts – even when I have to work nights and/or weekends from time to time.

4) Administration nightmare

The Refoundry is an administration nightmare because of two unique reasons: 1) It’s accounting is complex because it’s a small manufacturer; and 2) I am both an US and Australian citizen that must report detailed company statements to each country which happen to have different financial years.

Apparently, the IRS will want me to change my Australian company to their calendar tax year the moment we show a decent profit (another expensive exercise). So, now I am disincentivised to grow that business until this can be sorted.

Note to Self: If I ever set-up another company in Australia, just declare a calendar FY instead.

Turning the Page

Having made that hard decision, the next steps are to try to find a buyer for Harvestcare. I have someone in mind that would be a good fit if they’re interested.

I’ll share more as things progress over the next few months, and I start turning the page to begin the next chapter in my book of businesses.

2020 on the beach

2020 Lessons Learned

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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!

10k Hours

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Malcolm Gladwell made the 10k Hours Rule famous in his book Outliers. The Rule essentially says that it takes about 10k Hours of deliberate practice to obtain world class expertise. Personally, I find it frustrating in business.

I’ve accepted this Rule in sports (more than 10 years as a paddler) and even learning a language (currently in my 3rd year of Spanish classes). However, for some reason I feel like I should be going faster and better with my business – especially with the recycled plastic products.

Maybe it’s because I already have so much business experience, but the reality is that I only have about a year in the recycled plastics industry. I get incredibly frustrated that I’m not progressing with my ideas and experiments the way I want to do so. And I admit that I beat myself up for so many mistakes and failed projects.

Bucket of recycled plastic mistakes and shavings
Bucket of recycled plastic mistakes and shavings!

I have plenty of mentors and YouTube videos, but the latest set-backs have convinced that me that I need a “teacher.” Given the lack of such teachers in Canberra, I’ve decided to learn how to do more things with wood. Therefore, I joined the local Woodworking Guild. Just maybe by learning from masters in this area, I can translate that to my plastic experiments.

In the meantime, I’ll just have to remind myself that it will take years to achieve 10k hours to master these new skills. For my ambitions and networks alone will not allow me to move any faster on the learning curve.

More mistakes

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How many mistakes can I possibly make on the same products? Let me count the ways.

As this is the first product that I have ever made from scratch myself to resell (the others were designed by a contractor), I don’t think I could possibly stuffed up in more ways.

Some of the lessons this week:

1) If I’m going to use unrefined (raw) ingredients, I have to be able to expect variations.

If you can see the whiter bits in this block of unrefined shea butter below, you’ll know that I had to change my recipe to accommodate it. This also means I didn’t know that I had to adjust for this until AFTER I made a batch because it takes a while for the product to settle.

Long story short, more money, lost time, and lost ingredients, but this unrefined version is still better for you.

Unrefined shea butter
Unrefined shea butter

2) Not all boxes of the same size, are actually the same.

Below shows to bamboo boxes side by side. I bought them from two different retailers to act as display boxes for my new hand balm products. However, you can see the box on the left can easily hold six tins, while the other one can only hold five because of how they are made.

Two boxes of the same size cannot hold the same number of tins
Two boxes of the same size cannot hold the same number of tins

3) Yellow orange to you is not yellow orange to me

I have been struggling with getting the colour right for our peach flavoured lip gloss as it looks too much like the watermelon colour that I’m using. I hope that the third order is the charm as I reckon that their formulator must be coloured blind as they all look almost the same.

Can you see the difference below? I struggle to do so.

two lip gloss containers that are supposed to be different colours but are not.
Which is peach? Which is watermelon?

4) More mistakes with labels

The labels have finally come in, but the backs of the lip gloss are hard to read. This is my fault as I was in a hurry to redo them, and I squeezed the lines to make it fit with a 6 pt font when I had to reduce the label size to fit the smaller sized tins.

Unfortunately, it’s just going to have to be good enough. Luckily I only ordered 100 units, and I’m hoping that the new blank labels and laser printer will allow me to become less dependent on suppliers for these in the future.

New product labels are hard to read

Despite all of these issues, I managed to get my first order to a retail customer on Monday. It wasn’t without other mistakes, but it was pretty good for my first go as a product maker.

If I make it too hard for business partners

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I’m starting to get feedback on the product designs from the manufacturers. Even though I told them that it was only meant to convey an idea of what I had in mind, I think they are evaluating the designs as already fit for manufacturing because I sent them CAD files.

I’ve asked for a phone call with one of them in the morning. I have a feeling that I’ll need to jump on a plane and spend a day with each of them to get the information I need.

I would have done this already, but I didn’t see how I could get competitive quotes this way. I still can’t, but maybe by meeting their teams and seeing their factories I can choose a partner and go on from there. Right now, I risk losing their interest in my business if I frustrate them too much.

Feeling naive…

What happens if there is a raw material shortage?

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I learned an interesting fact yesterday when I was speaking to a potential manufacturer of my plastic products. We were talking about the preferred material.

I told him how the mission of the company required the main ingredient to be recycled plastic, and that I was thinking HDPE would be the right type for Product #3. Because I need that particular product in a white colour, he said that there was only limited supplies of that kind of recycled plastic – the kind that comes from milk bottles.

The funny thing is that used milk bottles are everywhere. The only reason why there might be a local shortage of recycled plastic pellets used in the manufacturing process is because there hasn’t been enough of a demand for those companies to make it. Therefore, tonnes of milk bottles are landing in the landfills every year instead of being recycled.

This is precisely the problem that I wanted to tackle when I started this company – to create a demand for recycled plastic here in Australia. Wouldn’t it be great if my products were so popular that they had to recycle more used milk bottles to meet my needs?

Guess What Mom? I Started Another Business!

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I finally told my parents last night that I started another business. I wasn’t trying to keep this news from them. In fact, I was surprised in our conversation when I realised that they didn’t know.

Living across the world from them means that I only see my family twice a year if I’m lucky. And, lately, our joint attention and conversations have been paid to my new nephew.

My parents, particularly my father, have always been supportive of my entrepreneurial spirit. However, their own livelihood is dependent on me now. So, I can’t afford to go broke at this stage in my life.

After that video call, I felt compelled to look at job ads again. Am I being stubborn and selfish by not just taking a job? Am I actually putting my new business at more risk by working on it full-time now rather than starting it as a side-hustle?

Most people would say yes. However, when I look at all the jobs being advertised, I can only picture a life of uninteresting, frustrating work and long days.  Yes, I get paid well when I do work for others.  However, the kinds of roles I usually have are all-consuming for me.  That’s one reason why I have rarely been able to job search while still employed – I just can’t focus on both activities at the same time.

If I took a job now, I feel like I would be taking the easy route and basically give up on this dream –  accepting a life of “good enough.”  I wouldn’t have the time, energy or headspace to start a business like this if I did go back to work for others. 

No! Despite the risk, right now I just have to push ahead and know that I will know the answers when I get to the next major decision points. I can think about all the things that could go wrong. BUT…

What if I am right?

When Start-up Costs are High

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I realise now why so few people go into manufacturing products – the start-up costs are huge! Service-based and information-based businesses can largely be started with little capital. Even my previous tea company only needed about $5k to get started before I had a batch of products to sell.

My ambitions to do something with recycled plastic this time is far more expensive than any business I’ve ever tried. Sure, I can buy something from China and private label it for minimum costs, but I wouldn’t be fulfilling the purpose of the social enterprise (to reduce plastics going to landfills and waterways by making great products out of Australian recycled plastic).

How much am I talking about? Well, the design and mould costs alone for my simplest product is estimated to cost $30k. This is before I even have one product to sell.

While 3-D printing has definitely revolutionised the cost of prototypes, the process itself is not ideal for mass production or even performance testing of products that must have some level of strength or rigour.

Therefore, in order to make more robust and mass produced items, moulds still have to be made in a material that is significantly stronger and can withstand greater heat than the product material itself i.e. plastic.

Having these costs upfront is useful as I can more accurately assess risks and cashflow. At the same time, I can’t afford to fund all these moulds myself with only the savings I put aside after selling my investment property.

I always think that roadblocks are God’s way of telling me to pivot or shift directions.

I’m going to have to rethink my funding model to make it happen. Maybe, I go ahead and pay for the full design and product prototypes and see if I can somehow pre-sale or crowdsource cash to pay for the moulds. I may also be able to afford one mould if I can get a local government grant in August to start this project. Having the prototypes ready will be useful to convince people that the idea is worthy.

Any advice from my readers?

-Tammy