S2E2 // The Most Important Ingredients

October 24, 2018

What are the most important pieces of creating a new business? We’re talking about the ingredients that make up a product business—from consistently showing up, to tracking your numbers and knowing all the math that goes into your business, to creating an incredible customer experience.

Learn More about the Topics Discussed in this Episode
"Consistency breeds legitimacy—and I think that's even more important for a new brand."
- Emily Thompson

Discussed in this Episode

  • The most important parts ("ingredients") of making a business
  • Playing the money game when starting a product business
  • Calculating numbers in a product business + factoring in your time
  • Creating an incredible customer experience

Resources

More from Kathleen

Braid Creative

More from Emily

Almanac Supply Co.

Transcript

Emily Thompson 0:01
From Being Boss, this is Making a Business.

Kathleen Shannon 0:05
A podcast about starting a business from scratch and overcoming the obstacles face when pursuing your dreams. I'm Kathleen Shannon.

Emily Thompson 0:13
And I'm Emily Thompson.

Kathleen Shannon 0:22
In this miniseries, we're following Emily's journey as she jumps into life as a maker and retailer with her new creative endeavor Almanac Supply Company.

Kathleen Shannon 0:38
In the last episode of Making a Business, we talked about the big shifts that Almanac Supply Company went through in their first months of business, as well as how those first few months of business caused some shifts in the plans Emily and David have for the remainder of their first year in business. In this episode, we're uncovering the most important ingredients, we'll call them of building not only a new business, but any business.

Kathleen Shannon 1:08
Okay, Emily, I'm really curious. I feel like as you grow a business, and as a business of evolves, you kind of put together these pillars, or even main ingredients of what makes up your business, or what the most important parts of your business are. So I'm curious to hear from you right now, at this time, what would you say the most important parts of Almanac and making a business there, what are they?

Emily Thompson 1:38
I think the first one goes back to a tried and true Emily-ism. And that being consistency breeds legitimacy. That's one that you know, I know to be true, it's something I've been saying for a very, very long time. But to be back in to practicing it in a new brand, it just reiterates how very important this is. And whether this is you know, your turnaround time for answering emails, or if it's, you know, how it is that you're delivering packages, or if it is, you know, what your Instagram feed looks like, or how often you're sending your email marketing newsletter, or whatever it may be. Consistency breeds legitimacy. And I think that's even more important for a new brand. I think once you get old, and you have clout and all of these things, you can skip a couple email newsletters, and you can have something weird show up on your Instagram feed or whatever, no one's really gonna bat an eye. But as a new brand, creating this legitimacy through consistent consistency is super important. And so for me, that's been one of the things that I just keep going back to. And it's kind of hurting me a little bit because I like the sort of ebb and flow or I've been in my other brands long enough that I can, you know, break my own rules. But I'm not in the rule breaking phase yet. Like, I'm still very much so in this like creating the rules, and then delivering on that thing over and over again, while I'm building the legitimacy that I'm looking to build.

Kathleen Shannon 3:09
I love everything that you just said. And I it makes me also, it makes me think that consistency not only yields legitimacy, but also momentum, it keeps this momentum going, even whenever you're scared or want to quit or are ready to throw in the towel or come against a hiccup. If you can just keep going and showing up within the systems and rules that you've created for yourself across the board, you will continue to feel your business grow step by little step.

Emily Thompson 3:44
Absolutely. I think another thing that I've been enjoying a lot through this process is really maintaining this, like a test and change mindset, where you know, I've tried several different things with our email newsletter, for example, just to see what happens, or you know, with how it is that I'm presenting products or who it is that I'm contacting for wholesale accounts, or whatever it is, I think staying in this very experimental mindset. One where you're not attached to the outcome whatsoever is so important for building any business where you don't know how anything is going to go. If I were to be going into any of these things with defined expected outcomes, and then you know, sadness or whatever feeling comes up whenever I don't reach goals, then I'm not going to get up and do this tomorrow. But by staying in that, in that very experimental testing change mindset, I'm reminded how important that is, again, for new businesses for sure. But I think for anyone in any phase of business and especially with the ever changing landscape of everything these days, it's still so important to remember how important that is for running a business.

Kathleen Shannon 5:02
Recently, one of our Being Boss listeners asked us how we know when to quit or pivot. And the truth is, there's very little unexpected quitting or sharp turns in our business. Because we're all about testing and changing as we go test and change. It's one of our foundational Being Boss mindsets, and just one of many business philosophies that you can find in our book, Being Boss, Take control of your work and live life on your own terms. This book is the complete guide to finding confidence, developing productive habits, and setting boundaries, you need to make your entrepreneurial dreams a reality, you can find it wherever books are sold.

Kathleen Shannon 5:47
Let's talk a little bit about money.

Emily Thompson 5:50
Always. Um, I think the most basic things stay true and is one that you know Dave and I are being very adamant about making sure we're playing the game, right? Business is a money game and one in which you need to spend less money than you're making. So I think a couple of things even play in here. So let's talk about spending money first, always being sure that you're spending money in places where you can make money. So this is like on products, maybe that you're going to turn around and sell on raw goods that you're going to turn into products that you're going to sell. But then thinking about really minimizing spending the money that won't make you money. So I always feel this whenever we order boxes, like shipping boxes, like shipping boxes don't make me money. shipping boxes are where I have to spend money, I guess to make money, but it's a very different, it's a very different kind of spend you I'm not spending money on books that I can turn around and sell I'm spending money on the box is going to deliver the books. So you can think about how it is that you can minimize the money you're spending on things that won't make you money, but also maximizing those purchases, whatever they may be. And that may be buying in bulk, or seeing how you can get one size box, for example, that can ship off multiple goods, as opposed to you getting a box for each individual item that you that you have. So there is like a spending money game that you have to play. And then there's the making money game where you need to know what your profit margins are, you need to know how much it costs for you to sell the things that you are making. And you need to make sure that you're making more than you're spending. Because at the end of the day, that is what will tell you if you have a healthy business or not. It's funny David and I were were making candles the other day. And out of nowhere, David said something to the effect of like this business that requires so much more math than anything else we've ever done. And I was like, Well, first of all, you're the money guy, so you only do math. But also this is the first time where he's experiencing math on the front end. So he's always in the bookkeeping in those things. So he's been used to that, like behind the scenes math, but he's never had to figure out like the profitability of something. Or for him, he was talking specifically about taking, you know, a box of candle wax and figuring out how many candles we're going to get out of it. It's all just math, business is just playing with numbers and making them work in your favor.

Kathleen Shannon 8:25
And speaking of math, are you accounting for your time at this point? Or are you not there yet?

Emily Thompson 8:31
We are tracking our time. And we're definitely using it to plan for things. We're not using it in the revenue model yet. And may that's actually one place where we should be taking that step next and where we can definitely start improving. But we're still working on getting some of those other basic numbers really under control before we start adding the variabilities that come with time numbers as well.

Kathleen Shannon 8:56
I also wonder if as owners of a business, and this is a total tangent, but let's say your time is worth $30 an hour pouring candles, can you technically take a loss on your business? Even if you make a profit because of paying yourself? That might be something to ask your accountant.

Emily Thompson 9:16
Right? I'll ask David about that. Because I'm unsure. I feel like the answer is probably yes. But maybe only if it's an employee who's pouring your candle, like if you are as the owner, I think there are different rules that apply. So I think it could go either way, I am unsure.

Kathleen Shannon 9:35
These are the things that go into making a business, these kinds of questions.

Emily Thompson 9:40
Right. And it's also funny to think about how much my time is worth as a business coach, and how much my time is worth as a candle pourer, because those are two very, very different things and they have very, very different numbers. And it has been an interesting thing to step way down in to being a candle pourer, and what what that is worth.

Emily Thompson 10:07
Know your numbers, we hardcore believe that this is one of the foundational practices that makes a successful entrepreneur. And we know that creative types tend to do just about anything they can to stay as far away from their numbers as they can. So we're here to give you a little nudge, whether you're thinking of starting a business, or you're already on it, become friends with numbers, track them, work with them, and know them, it'll make you a better business owner. And if you're looking for some tools to help you get started and master the basics, we invite you to come over to our website and check out our CEO Day Kit, a place where we offer tools for not only getting in touch with your basic business numbers, but help you plan out a whole year of your business. You can learn more at courses.beingboss.club.

Kathleen Shannon 11:01
All right, what is one of the final most important steps whenever it comes to making a business?

Emily Thompson 11:10
I feel like we probably talked about me. And like the people who's running the business, you know, through most of all previous episodes of this podcast, and it's something that I thought a lot about as I was re listening to season one, I was like, Oh my god, I feel like we didn't actually talk about the customer. At all, I'm just talking about me making a business and what this what this feels and sounds like and looks like. But I do want to this is maybe the place where I super iterated, because the leading thing and all of these things is that customer experience. And what it is that I'm here to create, I want to create a shopping and, a shopping experience and an environment where people feel grounded, and taken care of and those sorts of things. So, for me, one of the most important pieces of making a business is thinking about the delivery of the thing that you're offering for us that is, you know, having a very easy to use website experience and having really great photos and people being able to connect with the products, even though we're hundreds of miles apart. But it's also like, what is that unboxing experience like for people and it's been investing in things that don't make us money, like stickers, or tissue paper or, you know, having boxes that aren't just, you know, reuse from Amazon, or whatever it may be, it's really been investing in that, that experience that we're giving customers now. Because whenever it does come to building that offline experience, it is that that environment and customer experience that I'm wanting to create. So that has been something that we've put a lot of time time and energy and resources in to make it a really great experience if I can use that word one more time for the people who want to be Almanac customers, or maybe aren't customers yet, but are thinking about it. And that's something that we've had a lot of fun doing. And it's been investing in things like, you know, packaging materials, but it's also been an investment of time. Sometimes I get tickled at myself, I think that my part time job as a thank you card writer, where whether that's sending thank you cards or Being Boss, which is something that we've always done a great job of doing or if it's writing handwritten thank you notes for every single package that leaves for Almanac at least, you know, while we're at this volume, though, I hope to always be able to do that it's very important for me, for us to take the time to really show appreciation for everyone who's showing up to support us. So that customer experience and delivering the thing is definitely one of the most important parts

Kathleen Shannon 14:01
In the next episode of Making a Business.

Emily Thompson 14:05
Girl, this is the hardest part being taking seriously.

Kathleen Shannon 14:09
Really?

Emily Thompson 14:09
Yes, absolutely. So um it's funny too, because I'm spoiled to being in the online space and having a book and a podcast and you know Instagram account all of these like little pieces of clout that I have in the online space. Offline no one knows who I am nor do they care whatsoever they just think I'm a cute girl is started a cute little candle business and look at her go. And I just want to punch some people in the face with my book.

Kathleen Shannon 14:14
Do you feel like any of this is you projecting? Do you feel like maybe some of your own insecurities and starting at square one?

Emily Thompson 14:47
No.

Kathleen Shannon 14:48
Maybe not making as much money pouring candles as you would business coaching. Truly, do you feel like in some weird way you're attracting that energy because you're not taking yourself seriously?

Emily Thompson 15:03
Mindset, boundaries, habits, and routines. These are what turn a creative into a boss. These foundations and more makeup our new book Being Boss, Take control of your work and live life on your own terms. A guide slash workbook slash sleep with it under your pillow book filled with what we've learned over the years as working, thriving creative entrepreneurs. Plus what we've picked up from the hundreds of conversations with industry leaders and experts on the Being Boss podcast.

Kathleen Shannon 15:36
And it's all so that you can cultivate confidence in your work, make good money doing what you're best at, and live a life you love. To learn more about our book and order one for yourself, go to beingboss.club/book.

Emily Thompson 15:50
And to check out Almanac Supply Company head on over to AlmanacSupplyCo.com get 15% off of your first order with discount code being boss at checkout.

Kathleen Shannon 16:01
Do the work.

Emily Thompson 16:02
Be boss.