First Harvestcare order

Leave a Comment on 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.

Potential side hustle to my main hustle

Leave a Comment on Potential side hustle to my main hustle

One of the manufacturers is over a week late in giving me their quotes. Their tardiness delays the entire process including the ability for the company to bring in revenue.

These delays also impact my personal finances too since I’ve been working on The Refoundry full-time for a while. If I’m smart, I should try to find another way to bring in money while I have a little more time to do it now.

The challenge that I’ve shared before in this journal is: “What easy 9-5 job can a former CEO of an animal shelter do?”

Almost everything that has come to me so far have been 50+ hour a week jobs, and I haven’t been able to get past the recruiters for lower-level positions (not that I’ve tried for many).

An idea actually came to me before Christmas about doing digital marketing work like I used to do with my first business about fifteen years ago. I tested the market demand with some of my friends who own businesses, and no one expressed any serious interest – probably because they already have themselves sorted. So, I abandoned that idea.

But I still have other friends and contacts asking for advice about sales and marketing – twice in the last week in fact. These are not the medium size business owners that I asked previously, but sole traders with smaller pockets.

Knowing that there appears to be a demand from these micro-businesses, I think I figured out a less-time consuming, affordable way to provide it to them. I just need to do a little more market research to confirm that it provides enough value.

Wouldn’t it be funny if my side-hustle actually helps me pay for my main hustle rather than the other way around?

I say molds, you say moulds

Leave a Comment on I say molds, you say moulds

I spoke to the manufacturers today about my Request for Quotes. I think we’re all on the same page now. Essentially, they believe they can give me unit product costs estimates, but will struggle with giving me the moulds’ prices until they have redone the design work. That’s because the moulds (or tooling) are outsourced to other companies.

What I have also learned is that there are many things to consider when designing the moulds. For instance, I can combine parts or create multiple pieces of the same part in the same mould. The bigger the mould, the more it costs. However, I can save money in the unit cost. Of course, if we get it wrong I might also have a lot of excess parts the customer doesn’t need.

I’ve also learned that it may be possible for the manufacturer to amortise the tooling cost into the products with them essentially acting as a bank. That could be really useful depending on how much money I can raise from investors. I’ll be surprised if they’ll do this though without a large order – something I can’t agree to do until the products are proven.

I’ll write a longer article next week about what I might have done differently in the design phase.

Design workshop for Product #1

Leave a Comment on Design workshop for Product #1

Design workshop on Product #1 today with my uni student designer and mechanically-minded friend. I think we sorted a decent solution, but will test it with manufactures.

Good chat with Manufacturer #4. Sent him a NDA so that he can bid on work too.

It struck me really hard this afternoon that there’s a chance that I can’t make these products at a reasonable price in Australia at any quantity. This is what happened with my previous tea company where I was being forced to package it elsewhere. Is it worth continuing if I have to outsource the work to China and screw the social mission of using Australia recycled plastic? Most people would tell me yes.

I hope to know the estimated product and set-up costs in the next two weeks. In the meantime, I’ll slow down my spending on the company until I know for sure. Last night, I just spent another $2k on a premium domain I really needed. Fingers and toes crossed that the product manufacturing costs are in line with my budget projections.

Intellectual Property

Leave a Comment on Intellectual Property

Everyone keeps reminding me that I need to protect my intellectual property (IP). So, today I spent a few hours looking at the patent process. I know I need to do this, but I’m constantly weighing the cost of protecting ideas and designs that haven’t resulted in a cent yet. Still, if I want to attract investors, I know that my company will be worth more if I have protected IP.

IP Australia has lots of great information on its website. They’ve suggested that the “application to a standard patent” process can cost about $12k per product just in Australia alone, but I’m not sure if that includes legal fees. Ouch! Afterwards, I still have to apply and pay separately for other countries.

Investors advice from friends

Leave a Comment on Investors advice from friends

Spoke to three female friends today who gave me some good advice about financing my business. One’s a successful entrepreneur who has built and sold a company. One’s an investment banker. And one’s been in the angel investing / start-up world for as long as I’ve known her.

It’s interesting to hear their different perspectives about the risks of taking external money. The big thing is the loss of control including the potential to lose the environmental mission if my investors’ values are not aligned with mine. I’m so lucky to have friends like these as supportive advisers too. I’m sure I’ll seek their advice again when I get closer to that decision point.

If I had $1M to Invest in my Start-up

Leave a Comment on If I had $1M to Invest in my Start-up

A lot of people dream about having more money. When you’re an entrepreneur, this is especially true because it always seems like there’s more money going out rather than in the bank. This weekend, I was thinking about how I might do this start-up differently if I had investors involved.

As I worked through this exercise, I started with $100k more. If I had that extra cash, I would be going through the design process faster. As of now, I have hired a local uni student to get my ideas into CAD so that I can communicate better with my potential manufacturers. This will hopefully save me more money down the track. Still. this is a slow process.

If I had the extra cash, I also wouldn’t be so worried about which product to build and launch first. I could do all three simultaneously because I would have the cash to build the moulds. It would allow me to offer the customers a complete package for their needs immediately.

I then did this same exercise for if I had $1 million more to invest. The funny thing is that I really had no idea how to spend it effectively. In other words, I didn’t need it yet.

Instead, I first need to prove the concept and demand before I sink anymore money into this venture. Then if all went well, I would use the money for inventory, customer service support and marketing – maybe even some warehouse space instead of renting generic storage space each month.

Beyond that cash, I certainly have growth plans in my mind. However, this is still something where money cannot necessarily make things go faster – at least not without the risk of paying for huge mistakes also.

I need to give myself enough time to both: 1) learn; and 2) bring on the best possible people for the next phases of work. These are largely experts in areas where I lack knowledge, but will be hard to find in Canberra.

This exercise didn’t take that long to do, and it was kind of enlightening to know that I couldn’t necessarily just throw money at this start-up to make it successful. Creating a sustainable business is a marathon, not a sprint. So, I just need to have some patience right now as the path I’m taking is a bit slower, but also less risky overall.

Moulds – first estimate costs for Product #2

Leave a Comment on Moulds – first estimate costs for Product #2

Received rough pricing estimates for the moulds of my “easiest” of three products (Product #2) from Manufacturer #1. Two options above the $30k mark with GST. Yikes! That’s expensive. The cheaper of the two ($9k difference) combines two parts into the same mould. The other option is for 2 separate moulds. I’m going to need to rethink my funding model. I could go broke with the moulds before I even have a product to sell.

Approved early design work to start for Product #3

When Start-up Costs are High

Leave a Comment on When Start-up Costs are High

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

Setting up my corporate structure

Leave a Comment on Setting up my corporate structure

Looked at options to turn my sole trader business into a corporation which I need to get investors, as well as liability protection. I would have done this already, but decided to wait until the new financial year to save time on tax paperwork. Cleardocs and Legal Zoom are two easy options for under $1000 which includes the ASIC and ATO fees. I need to go back and look at how I did this before with my previous business. I don’t think it was that complicated. I also need to file for trademarks about the same time – more expenses.