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So you want to start a business?

So you want to start a business?

You’re sitting at your desk one day, contemplating leaving your 9-5 job, booking a one-way ticket, and starting a new life in another city. We’ve all been there, and all though that sounds like one amazing plan we all wish we could do, it’s not everyone’s reality.

We can’t all just pack up our things and drop all responsibilities when we are feeling spontaneous and inspired, that would be crazy right?

Well, it is, but you know what’s even crazier? Having a dream and not making that dream a reality, or at least not having the courage to make it happen

I’ve worked with many brands from different backgrounds, cultures, and mindsets over the years, and although they are all very different, they all have one thing in common. The owners and the founders all took RISKS.

Every single owner I spoke to all mentioned that they were tired of working for someone else, tired of making other people’s dreams a reality, and most importantly not being able to have something that was their own!

That new life plan doesn’t sound so crazy anymore, right?

Life is all about taking risks! If you have the luxury to go for it and make a drastic change, I say go for it!

Alright, so I’ve just inspired you to quit your job, take out a loan to start your lifelong dream of creating a swim suite brand, and now you find yourself at a loss instead of making profits!

What now?

What happened?

You probably didn’t take into consideration your contribution margin

Your contribution margin is basically the price of your item minus the cost to make that item

Contribution Margin = P (price) – VC (variable cost)

Let’s say you want to sell your newly designed swimsuit for $60 and when you add up all the costs to make that swimsuit (the fabric, the tassels, the clips, etc.…) it equals to $10

You would calculate $60 (P) – $10 (VC) = $50

Your contribution margin for that one swimsuit is $50

What does this mean? It means you are making money!

You are making more than what you are spending so that’s good! But if your cost was higher than your price, you are at a loss, which is what probably happened.

The contribution margin can actually help you set a price for your products if you are just starting out. You always want to sell higher than your cost. It also helps you differentiate between which manufacturer you want to use, which style of swimsuit you might end up selling, or even which fabric you want to go for 

All these variables have costs, and to make money you want to pick the one that will yield you a higher contribution margin

So, you can compare the price point to different types of costs and see which option will be cheaper and get you the most profit

This is also great if you have already begun selling and you want to put your items up for sale. Without knowing your contribution margin you might sell your product at a low price and lose money

But, if you figured out your contribution margin, you would be able to know what the lowest price you could sell your product while still making money!

You are now a business owner, and as a business owner, it is up to you to know the ins and outs of your own company, starting with the costs associated with your products.

It’s not about being cheap and cutting corners to increase profits, it’s about bringing your clients high-quality products while being efficient and smart in your own business!

Filters and you in Tableau

Gathering enough data to make strategic business decisions is only step 1 of the process, once you have gathered the data, it is important to know what to do and how to decode it and be useful to you or your managers.

Data can be broken down into multiple files, you could use excel, flat files, or even Tableau to record your info and create graphs and charts to making the processes easier to read for everyone involved.

In Tableau there are filters that you can use to basically “filter” out your data and see specific information. You might be a retail store and have a lot of data regarding size, styles, colors, gender, etc. in this case you might have all the data together in one sheet, but, you can use the filter option to essentially view only certain part of the data like only the shirts in a size small for women. This allows things to run more smoothly and lets your see only what you want to see to answer specific questions like “How many red women t-shirts are available in a size small”.

Having these filters makes your job easier and essentially provide you with answers to make important business decisions that much quicker.

If you missed my last blog, check it out here

Brand Responsibility

As a brand, you are oftentimes seen as an authority figure in your industry, especially as a top tier brand in that current market. Depending on your brand equity, consumers look to you as a viable source of trust, reputation, and experience in that particular industry. When this happens, many brands can use their brand equity to bring awareness to other causes or partner up with other brands in the same or different industry for a great cause.

A great cause could be being a powerhouse for a charity, a current social cause, or even to spread awareness on civil rights, social justice, etc. Brands can dedicate a certain portion of profits to an organization of choice, or they could donate a pair of shoes for every pair they sell like the brand’s Toms.

It’s a great strategic move to help your community and bring awareness to real ongoing issues, but just as it benefits your company’s reach, don’t forget it’s for a great cause much bigger than the brand as well.

If you missed my last blog, check it out here

Data you are collecting

Using Tableau is a great way to organize data you have and create an impactful presentation for your business and your team members. You can introduce different sources of data and join them together to create charts that visually represent patterns and relationships between one set of data and another.

You can also make specific calculations that can help you showcase important information like quantity of products, BDI/CDI, revenue, and sales within different regions, states, cities, or stores, depending on the data collected. This is a great tool for business owners or marketing experts to make important decisions on the future of the company or the campaign of a marketing strategy.

Without strategy a plan could fail, so make sure the data you are collecting is helping you make impactful decisions that will help your business succeed.

If you missed my last blog post, check it out here

Extending your brand

You may be thinking of entering new markets or maybe even starting a new business. While those are some great ideas, it is also smart to think about extending your brand if you already have one established. Many brands do this as a way of tapping into new markets that are similar to their best-selling product. Brands like Ralph Lauren started in one specific segment and branched out into many other ones for a broader reach. They started in fashion and now have products for the home like beading, sheets, towels and more.

Because of their strong brand equity and the similar category, they decided to go in with the home décor, their audiences would be more than happy to test out their new products. This would be a big plus to Ralph Lauren and a higher reach and growth in their market.

Finding new ways to keep your target audience engaged and tap into new markets could be very beneficial to your brand, and something you should consider for scaling a company.

If you missed my last post, check it out here

How organized is your data?

No matter the business you have it is always important to keep track of all your orders, customers, shipments, revenue, etc. Having a place to store important information like those listed above can be the difference in a business that becomes successful and business that closes within the first few months.

Depending on how big your company is or how much data you need to store, you can use data systems like ERP or data warehouses to store and categorize your data for easy retrieval. If you are a smaller business, you might find that basic excel sheets can do the trick, and creating flat files can be your answers!

Whichever you choose just to make sure you are gathering the most important information for your specific business, that is very important.

Get organizing!

If you missed my last posts, you can check it out here

Making the switch to E-commerce

As our world advances, we find newer and smarter ways to connect with our audience to get our brand’s message across. Back in the day brick and mortar stores were the only way of selling a product and introducing it to your target audience.

Fast forward to the 21st century and that is just simply not the case anymore. Obviously, there are industry or certain circumstances where e-commerce would not work for your company, but for most business owners who have a product to sell, e-commerce is the perfect solution.

Not only is it a quick and simple way to get your product in the eyes of your customers but it can save you a lot of money on fixed costs. A physical store can accrue many expenses like electricity, rent, etc., but not e-commerce!

All you have to do is either create your own website or use a platform like Shopify or Wix to set you’re your online store and you are ready to sell!

We are living in an age where everyone wants everything as quick as a click on a mouse, and e-commerce allows customers to view your entire inventory from the comfort of their home.

If you have a product that can be easily accessible to customers over the internet you might just benefit from opening up an online store!

Make sure to check it out!

Are you breaking even?

Making money and sales in your newly started business can sound like you made it… but did you? It’s not all about how much money you are seeing coming into the business, but how much is coming in that is allowing you to cover your fixed costs.

In business you want to at least break even, you may not be making a profit when you break even, but at least you are not losing money, which means success!

If you don’t know what breaking even means, it is essentially the point where you are neither at a loss or a profit, but you are making enough to cover your business cost.

For example, let’s say you are a bikini brand and you want to find out how many bikinis you need to sell in order cover all your costs or at least recover your investment, what you would essentially need to do is divide your fixed costs or your investment by the selling price of your bikini. This will give you the unit of bikinis you need to sell to break even, anything above that would be considered a profit!

So, make sure you are covering all your costs first and once you do, everything after that will be a true profit!

If you missed my last blog post, check it out here

Your brand is important

Should you focus on sales or branding? That’s the biggest question you’ll come across when starting your new business. I can confidently say it’s both! BUT I do believe branding is HUGE importance, and something I choose to put a lot of effort and emphasis on no matter the industry.

May times businesses are so eager to make sales they forget about one very important part, and that’s branding. Have you ever seen a product that was not all that great but received a lot of hype from its customers and sold out almost instantly? A lot of factors go into the success of that product, but a big portion comes from branding and marketing. Your product could be really great and useful to many but if no one can find your product via marketing or resonate with it aesthetically, it won’t do well in your market.

It’s not all about looks, your product has to be able to help customers and solve their problems but at the same time, customers want to fit into a specific social category when they choose to make a purchase, this is a key driving influence.

When it comes to branding you want to relate with your target audience as much as possible, your branding when it comes to images, communication, tone of voice, designs, etc., should all be consistent. Consistency is key in branding; this is because you need to be able to create a brand your audience can pick out in a room without knowing it is yours. When your increase brand awareness your brand equity also increases, and your sales will follow along as well.

To read last week’s blog, click here

Where to sell your product

When it comes to starting a new business, good marketing is something you want to invest in, but aside from that, if you choose to sell your products in multiple retail stores it is crucial to find out which are the best stores to do business with and which you should stop doing business with based on numeric distribution, PCV and ACV.

You are probably wondering what the heck numeric distribution is, or what PCV and ACV is…

Well essentially, they are measures that help you (the owner) or managers understand sales and help them make decisions or expand their growth strategies based on those answers.

ACV

This is the total sales of a store carrying your brand divided by the total sales of all stores carrying your brand. This could be very valuable information to you when choosing a store that gets high volume traffic BUT, just because they make a lot in revenue does not mean most of those sales come from selling a product in the category of your product. This is why looking at PCV is your best choice, if you have access to it!

PCV 

I say this is the best choice because PCV allows you to get an accurate picture of how much a store is selling a product similar to yours and if that category of product is in high or low demand. PCV is the category sales of the store that carries your brand divided by the total category of sales for all the brands selling your product.

Both provide you with helpful insight but PCV is what you want to look for in terms of accuracy! You want to do business with a store that has good traffic but that also has good traffic for your product!

If you missed my last blog check it out here

What’s your brand?

Have you envisioned what your brand looks like, sounds like, or even feels like? If you haven’t, then you have a lot of work to do! But, no worries! I am here to help you!

When it comes to branding you want to make sure you have a vision you want to portray and an image you want your audience to associate you with. Here is where brand identity and brand image play a huge role in the success of your business in the eyes of your target market and your potential customers.

Rule #1 don’t get the two of them mixed up! Brand image and brand identity are not the same, but they have to work together in harmony for your brand awareness to grow and your brand equity to become strong

Brand Image 

This is what YOU as a company sees yourself become, it is more inspirational, it is your vision! You need to know what you want to look like and sound like before you launch yourself into the market, if not, consumers will make their mind about you, and that could be positive or negative.

Brand Identity 

This is how your AUDIENCE sees you as a company. The real and the raw way your consumers sees and acknowledges your brand in their minds.

Both are different but both need to overlap to maintain consistency and help your brand become stronger and more successful.

Make sure to work on your brand image, and the more authentic and real you are with the audience the more your brand image will reflect your hard work and personality as a brand.

If you missed last week’s blog, check it out here