Stick to Your Business Plan Being Optimistic when Feeling Pessimistic
This summer has been quite a ride! From our March launch until the end of July, we’ve had 100 or so orders. Then came an article in The Awesomer. Within two weeks, we had sold out of three kinds of soaps, and had 200 more orders to fill. And we’re still getting more orders every day.
Wow. WOW! It’s awesome.
I just wish I hadn’t set up our packaging so I had to hand-label every single bar.
Instead of being gleeful as orders pour in, I’ve been shaking the writer’s cramp out of my arm and struggling to fulfill everything in a timely manner. (Though I assure you, there’s a lot of glee around here too.)
I set things up in a really short-sighted way, and when the success floodgates opened, I wasn’t ready.
So, what happened?
Not only did I pretty immediately run out of our most popular soaps (which I knew were going to be popular), I didn’t have the supplies to make more. Even though lots of customers still ordered on back-order, I know that our sales have been affected because we’re sold out.
Plus, my decision to hand-write every label meant that I personally had to be involved in the packaging of each bar of soap. My husband may be amazing in 99 ways, but great penmanship is not one.
Remember my article about vendor maintenance? Well, this is the yang to that yin. This is about taking responsibility for the growth of my business.
I am so intensely grateful that my own short-sightedness wasn’t the death of us. Russ and I saved the day through brute force, hours of extra work, and even two disagreements.
This all could have been avoided if I just used my own business plan.
Yep. Months ago, I worked on a business plan with my friend Heidi. I’m terrible at forecasting. She helped me work out how many bars of soap I needed to sell to break even (and make money!). We broke down all those bars into price categories (for example, some soaps are $8/bar and some are $12/bar), and planned for those. We forecasted the balance of wholesale orders vs. retail orders—I have to make twice as many bars of soap when I sell wholesale, but they take half the time to process, since I send them in batches.
We had really worked, and it was a good plan.
I didn’t need to be optimistic, pessimistic, or subjectively realistic; I just needed to stick with my business plan.
But two months ago, when I was ordering supplies, I was worried that we wouldn’t have cash flow. It seemed excessive to spend $200 on fragrance oils when that was about half our revenues for the week.
How much did I lose in orders because I didn’t have enough fragrance oil? $1,000? $2,000? More? The percent of site visits that ended in a sale went from 11% to 1% (really—that’s not an exaggeration). Is that because people came and couldn’t find what they want, or because the number of casual visitors increased, so the percentage went down?
I’ll never know.
What I do know is that I wouldn’t have sold out of soap if I had looked at my own projections and ordered the right supplies.
So, why did I do that?
We all envision the entrepreneur who invests all her money in an idea, only to see her dreams go up in a fiery fiasco. I don’t want to be that woman. My parents have expressed their own doubts about whether soap is a “real” business (yes, I’m 38 and still listen to my parents). My own savings is riding on this. I’m afraid of having to call it quits and go back to cube-life.
I try to stay modest so I don’t blow through the business too fast. It’s called a “scarcity mindset,” and it’s a self-fulfilling prophecy in very mathematical ways (as you can see).
But there’s a difference between playing roulette with my life and selling myself short. I have a good plan. A business plan that could get a loan if I needed it. I’m bootstrapping, but this is a proven, viable business. If I don’t stick to the plan, then I am not going to make the money I forecasted in the plan. Plain and simple.
This week, think about your plan. Think about what it means for your future. And don’t chop your legs off at the knee by failing to follow it.
Photo by Danielle Vincent.
Loved checking out your website! So hard to find the balance between too much and too little in the beginning. Looks like you’re rocking it out, now!