Monday, August 1, 2011

To retail or not to retail

Well, just when I think things are winding down after the summer festival rush, we start gearing up for fall craft shows, Halloween, and the winter holiday parties. No complaints here though. I’ve always said you shouldn’t have all of your eggs in one basket, particularly with a business like ours that can fluctuate seasonally.

One trend that I’m seeing with our customers is that many of you have started selling products yourself. Honestly, I can’t see why anyone would not want to sell merchandise in addition to their service business. Even if you earn $2 per minute while working at festivals and parties, there are just so many minutes in an hour and so many hours in an event. You know going into the event the maximum amount of money that you can possibly make, which to me, is very limiting and even depressing when you come home with less than you had hoped.

Product sales can easily double your income…or more. I’ve done henna at one of our local monthly events where we typically made less than $200 doing henna and over $400 selling henna kits and other merchandise. Amerikan Body Art has a very flexible wholesale site that can provide products for many different scenarios. The minimum opening order requirement is $200, and only $150 for re-orders. There are no minimums as far as product quantities go. You can order 1 or 100 of an item at the same low price. You can buy in bulk along with empty packaging to make your own kits, or you can buy pre-packaged items to take advantage of the Amerikan Body Art brand recognition.
www.AmerikanBodyArt.com/wholesale

If you’re teaching classes, 99% of the time, your students are going to want to take supplies home immediately so they can play. They’re not going to want to wait a week to have something shipped. Any products that you demonstrate in your class will sell particularly well. If you are on a tight budget and are concerned about ordering more supplies than your students will buy, you can assemble a small class kit that includes samples of each product and include the cost of the sample kit in the workshop fee.

When I started my supply business, I simply started ordering more of the products that I was already using. That way, there was no financial risk since I would eventually use the supplies myself if I didn’t manage to sell them. Plus, by purchasing in larger quantities, I was able to obtain lower pricing, which increased my profit.

Here’s an example of an easy money-maker. An empty sKweEZie applicator bottle with metal tip costs $1.49 at wholesale. An 8-ounce carrot bag of henna paste is $14.99 and will fill approximately 14 applicator bottles. Your total cost would be about $2.56 (plus shipping) for each bottle of henna paste and you can them for $6-$10 depending on your venue. At festivals where we were charging upwards of $10 for a single henna tattoo, we would easily sell a dozen or more of those little bottles, along with other henna kits, henna balm, and glitter tattoo kits.

If you want to make glitter tattoo kits, you can buy handful of different stencil designs, 5 or 6 glitter colors in ½ lb or 1lb bags, empty poof bottles, a pack of sweeper brushes, empty body glue applicator vials, and 19oz bottle of body glue. The 19oz bottle of glue will probably fill around 50+ glue vials. A pound of glitter should fill about 36 poof bottles. We have a glitter tattoo instruction sheet (with step-by-step photos) that is in a Word document which you can edit to have your contact information on there instead of ours. Just email me and I’d be happy to send you the file. We buy our labels from Online Labels, but you can also find them at Wal-Mart or any office supply store.

As far as pricing your products, the basic math equation is to double the cost of goods (including packaging). But you may also want to take into consideration your shipping costs and the time that it takes you to assemble any products. Let’s say that your cost for product (glitter, glue, & stencils) is $5 per kit. Your packaging materials, including labels and printer ink, comes to $2. And you determine that it takes you 10 minutes to assemble each kit. If you feel that $10 per hour is typical for your area for non-skilled labor, then your labor cost is $1.67 per kit. You might feel that your labor cost is $0 since so many of us start our businesses working for free, but keep in mind that eventually you will be too busy to do this yourself and will need to pay someone else to do it. So at this point your total cost is $8.67 per kit. You might even want to add in a small percentage to cover overhead costs and shipping costs, so let’s say your final real cost is $10 per kit. You’re probably looking at needing to price it at $20. Most of us are pretty frugal and crafty, especially as entrepreneurs, and we have a hard time imagining someone paying $20 for a small kit. But when you think about the fact that these same potential customers are willing to pay $10 or more for a single tattoo, a $20 kit that allows them to do a dozen tattoos is a real bargain.

Even though our pre-packaged kits are quite reasonably priced, you may prefer to make your own kits to fit the budget of your customer demographic. You may even find that our kits are too inexpensive for your area. There’s no need for expensive fancy packaging to sell merchandise, as long as it’s tidy and preferably uniform. My first henna kits were packaged in a paper bag with a label that I printed at home. Then I would buy lots of 12 or 24 cosmetic bags on eBay. Through my homeschool support group, I even found a local organization called the “Reusable Resource Center” where they received leftover office and craft supplies from local businesses. For $10 per year, I could take as much as I wanted and often found little boxes, bottles, and labeling materials that could be used for kit packaging. You most likely have a similar organization in your area. Eventually as your business grows, these sources won’t be consistent enough for your needs, but it’s a great way to get started inexpensively.

Even if you only work at private parties where you are paid hourly and not at festivals or workshops, you can still offer to create small kits as party favors. As a mother of three, I know that I’ve happily paid $3-$5 each for goodie bags and party favors. As busy as I am, I really value the convenience of being able to get all of my party needs taken care of with a single phone call. Post pictures on your website and create a postcard to send out to your current clients.

We are always more than happy to offer suggestions for your particular event or business scenario so feel free to send us an email if you’re unsure of what you should order. And although my husband jokingly tells me that my life philosophy is, “go big or go home,” and we love our customers who shop with abandon, I am also a firm believer in starting within your means and allowing your profits to snowball into a bigger business. This was our philosophy when starting our wholesale business because we wanted a retail business to be completely accessible and attainable for our customers. If you need something that we currently don’t have on the website, don’t hesitate to ask. We’ll do our best to either get it or find it for you.

Have a wonderful month!
~Erika

Business Rescue

My new favorite TV show is Bar Rescue, on Spike TV. I think it’s a little funny that I like the show so much when I don’t even drink or frequent bars, but it’s the concept of the show that I really appreciate. Each episode features a different bar business that is on the verge of failure, usually due to poor management, that has opened their books and opened themselves up to scrutiny in order to get to the source of their problems. Enter Jon Taffer, hospitality consultant and public speaker. Jon typically has a friend or relative visit the establishment covertly to get an impression of what customers are experiencing. Once he’s finished with his undercover recon, he goes in to meet the owners and staff and to start the rehabilitation process. I know that there are other shows out there with a similar theme, but this one just seems to have a little less drama and a little more practical advice than some of those other shows.

Although I’ve never officially claimed the title or had it printed on a business card, I like to consider myself a business consultant. I teach seminars on how to start a face and body art business, I advise many of my friends and family in their businesses, and I spend hours each day, emailing business owners who have asked for help. When I took the family to vacation in a log cabin just outside of Chattanooga last month, I couldn’t help but prepare a mental list of changes that I felt the cabin owners should make to their vacation rental property. It was all I could do to not write down the list and leave it for the owners. I find that people don’t always appreciate unsolicited business advice. I can’t count how many times someone has given me advice that I ignored, and later wished I had taken more seriously.

I know that many of you are wondering what you can do to make your business more successful, and that there are probably just as many of you who haven’t even considered the need to improve your business because, “if it ain’t broken….why fix it?” A lot of us (and I am absolutely guilty of this) get comfortable with how things are going, and then are surprised when something happens, like a new competitor shows up on the scene, one of your artists has to move, one of your suppliers goes out of business, or the economy takes a nosedive and your regular customers can’t afford to hire you. During the time that it takes you to recover from one of these scenarios, you may have permanently lost several customers. I used to purchase some of our manufacturing supplies from one supplier for many years, and then their website was down for several days in a row, which forced me to look for a new supplier. Imagine my surprise when I found some of these items at almost 30% cheaper from a different supplier. Had my regular supplier’s website not been down, I would not have looked for another supplier, and now they’ve lost a customer. We experienced a similar problem a couple years ago when we spent a whole year with a dodgy website that only worked half the time. To this day, I still wonder how much traction we lost in our business during that year.

Have you looked at your business and assessed your vulnerabilities lately? Have you looked for areas where you can improve, and actually taken steps to make those improvements? Better yet, have you ever asked your customers or a friend to tell you what they really think about your business and what you could do to improve it? Just as we get comfortable with how things are running, many of our customers stay with us out of loyalty, but secretly wish that we would change some things.

Of course you can’t make everyone happy and there are some things, like lowering your rates, that just aren’t feasible…but there are small things that could make a significant difference in your customers’ experience. When I was in our vacation cabin, there were four minor changes that would have made my stay perfect. I felt that there should have been shampoo and conditioner in the bathrooms. You can buy full size shampoo at the dollar store, so even if every guest stole the shampoo out of the bathroom (which is highly unlikely) it still would have only cost a dollar or two…which is pretty insignificant when you’re charging $250 per night. The cabin was pretty dusty…which could easily have been fixed for free by the cabin owners. There was no toaster…which you could probably get for $10 or less these days. And I felt like the beds were less than “resort-like.” A simple change to white linens would have made the place feel much more upscale. Perhaps the owners have reasons for not doing these things, but maybe they have no problem booking the cabin so they haven’t considered the need to make improvements. But those minor things are enough to make me consider looking at other properties the next time we stay in that area.

So instead of Re-acting to business emergencies, how about spending a day being Pro-active and taking a good hard look at your business? Do you have a plan B if your regular supplier is on vacation and you don’t have the supplies that you need for a gig? Or is your plan B to give the job to another company and hope that the customer isn’t lost forever? Are you the only person on your team who can do certain gigs, or is everyone cross-trained to be able to do what is needed? Have you checked out what your competitors are doing and if there are small changes that you could make to your business for greater impact, or are you relying on your winning personality keep you in business? Are you continuing to operate the same way you have always operated and hoping that the economy picks up soon, or are you looking at a new approach to doing business?

I’ve mentioned some business improvement ideas in my earlier newsletters, which you can read by clicking the “Past Newsletter Articles” links at the bottom of this newsletter. Consider sending out a survey to your current customers to see what they suggest. Promise your friends that you won’t get upset if they give you an honest opinion about your business. And hang up that old excuse, “I don’t have time,” and find the time to rescue your business BEFORE it needs to be rescued.

I just wanted to add one more note about this economy thing. I was recently watching a DIY show about a company who specializes in re-facing kitchen cabinets instead of replacing them. People still want to upgrade and renovate their kitchens, even if they can’t afford new cabinets. So instead of waiting for the economy to improve and for people to be able to afford new cabinets, this cabinet company converted their business from building new cabinets to refurbishing old cabinets. I thought the idea was genius, and exactly what I’ve been trying to get across to my friends who feel that they’ve been suffering the effects of a poor economy. Every year, Amerikan Body Art shows increased sales of about 20%, which is somewhat surprising in light of the age of the company and the state of the economy. But when you think about it, our company provides goods and services to people who are looking for additional income….and there’s a lot of that going around these days. What does your business do to add value to someone’s life, other than offering them a rolling good time? The federal government is going to make huge budget cuts this year, which means greatly reduced funding for charitable organizations. Think about ways that your company can help these organizations with their fund raising efforts. You might end up with more business than you can handle with this new group of clients.

Have a wonderfully prosperous month!

Sunday, May 1, 2011

Face Painting Convention Tips

Plan ahead of time which classes you will attend. If you are unsure of whether or not a class is for you, sit in the back of the class so you can leave and go to another class without being disruptive.

Bring a small kit and practice head if you have one.

Bring a dark towel and washcloth for cleaning up.

Bring address labels and business cards. You can use the address labels instead of writing out your address when making purchases with vendors.

Vendors often offer an opening night special that will not be available for the remainder of the show, so be sure to see what everyone has to offer and take advantage of the best deals.

If you are driving to the show, bring a cooler with snacks and sandwich supplies to keep your food costs down.

Don't be afraid to approach vendors or instructors with questions. They are there to teach and are more than happy to spend time with you.

Some of the best tips and ideas come from other attendees. Be sure to go to the evening jams and see how everyone else works.

Tuesday, March 1, 2011

At the end of the day...What really matters

Well, we’re back from Vegas and trying to get our business and personal lives back on track. It can be tough to be out of town for over a week, but fortunately we have supportive families and great staff that can hold down the fort while we’re gone.

Coming back from this trip has been a bit tougher than others. I got sick during the trip, along with Carlos, who worked the Dayspa Expo with me. And we’re still dealing with a lingering cough and fatigue…but it could be worse. Our friend and colleague, Gary Cole (head of Snazaroo US Division) was in a terrible moped accident right after the FPBAA Convention ended. He’ll likely have 6 months of recovery and rehabilitation before he’ll be ready to return to work at full force. Not to mention…he’ll spend tens of thousands of dollars in medical bills. It sure puts things in perspective for me. I think I can just suck it up and get over my little cough.

Health issues weren’t the only thing we came back to when we returned home. Unfortunately, we only earned about half of what we had hoped to earn at these two conventions. We ended up a couple thousand dollars short of break-even, but that’s the way business goes sometimes. Conventions are meant to be advertising opportunities, not money-making ventures. Some shows don’t even allow you to sell product at the show, just to distribute information and possibly take orders. So, when we have a show where we break even on our expenses or make a profit, we count ourselves lucky. At shows like this, where we lost money, we have to come home and figure out how we’re going to pay booth fees for the next shows and how we’re going to be able to afford to restock the warehouse. Just like artists who have a slow season and still have to support their families during that slow season, our business has a slow season and still has to support the operations required to stay in business. But every year, we finesse our budget and get better at preparing for slow times.

Along with the financial issues, it seems that a million other things have not gone according to plan these past couple of weeks. We’ve had an unusual amount of orders go missing, get damaged, or get delayed in transit and several of our most important stock items have been backordered or discontinued from the manufacturer. Just to highlight….Our silver glue vials are unavailable until May, so we’ve had to substitute for gold. I suppose it’s not a big deal, but I feel like silver is one of our company colors, so it does bother me a bit. Several of our suppliers have increased their order processing time to anywhere from 1 week to 1 month, causing us to be out of stock of several items. Seven of our most popular Mica Shimmer Powder colors have been discontinued from the manufacturer, including Grape Soda, Superhero Blue, Spring Break, Aqua Lagoon, Sunny Daze, Tangerine Dream, and Cherry Pop. We should be able to find similar colors, but they won’t be identical, and it will require some time to find replacements. If you really love these colors, I strongly suggest that you stock up while we still have some left.

I truly feel like I’m putting out fires every day as some new problem arises…juggling finances, resolving customer problems, finding alternative product sources and replacements, and somewhere in there…trying to have a life with my family. At some point, I really have to decide what is important, what needs to be focused on, and what I need to accept as being beyond my control. I was talking to my husband, Mitch, last night. Mostly I was detailing the list of things that had gone wrong this week while he patiently listed and promised that it would get better soon. Amongst my closest friends, I’m referred to as the President of the Kick-in-the-Ass Club. You don’t get away with whining about being a victim of life when you’re around me. I firmly believe that we create our own circumstances in life and that we are the only ones who can make them better. So I resolved to not spend too much time whining and tried to focus on the positives. My family is healthy and happy. We have a sturdy home, filled with love and laughter. We have friends who would give us food and shelter if some disaster ever took ours away from us. And even after 12 years of marriage, I’m more in love with my husband than I ever thought possible. At the end of the day….I have everything that really matters. Everything else is just temporary.

Have a wonderful month, and hug your loved ones today!
~Erika

Tuesday, February 1, 2011

A little more...or a little less. To discount or not to discount

Every now and then, I have the rare opportunity to spend some time browsing the posts on the face painting forums, such as the Snazaroo forum or Cindy Trusty's Body Painting Forum. I saw a post this week that seemed relevant to a problem that many of us suffer from.

It happens all the time...You get someone on the phone who wants to hire you, but they want you to give them a discount. Sometimes it's a cultural thing, sometimes it's a bonafide budget issue, but sometimes it's just the nature of the person calling....they have to get a deal on everything. I don't know why these same people feel that it's okay to bargain with people in the face and body art industry, but they would never (I think) go into a hair salon and ask for a deal. Maybe salons suffer from the same problem too though. So you have to decide whether or not you want to give them a discount. Maybe you are desperate for work and need to do what's necessary to get the gig...but be sure to think of the repercussions of discounting your services.

#1 You are cheapening the value of what you do. You are a trained professional, you many put hours into your business besides just the hours at the actual gig, and not everyone can do what you do. You paid good money for the best and safest supplies and equipment available. You pay for marketing materials, advertising, and office supplies.

#2 The only "exposure" you get from these discounted gigs is when the organizer tells all their buddies that you're willing to discount your rates. And they expect you to give them a discounted rate the next time they call.

#3 You may end up having to turn down a client who would have paid you full price because you booked yourself to do the discounted event.

So what are you to do when someone asks you for a discount and you feel like they are simply not willing to pay the posted price for the services requested? It's been my experience that customers place more value on receiving something extra than they do on receiving a discount. Depending on the gig that you're proposing to do, perhaps you can explain to the client, "I'm sorry, but we can't discount our rates because it's unfair to our regular clients who pay full price, but I'll tell you what I can do for you..." Decide what you can afford to offer the client...and personalize it to their needs.

For example:

A mom organizing a birthday party with 8 kids may not need extra time from you, but maybe they would appreciate a CD with photos that you've taken of each child that you painted.

A mom calling for a batmitzvah may not be interested in any sort of party favors or photos, since they have already purchased party favors and hired a photographer, but maybe they would appreciate an extra half-hour of your time for free.

A non-profit event organizer would probably appreciate an offer to bring along a teenager who can quickly do little tattoos while you do the more elaborate face art.

A corporate event organizer would probably appreciate you offering to create a stencil of their logo and tattooing their staff 15-30 minutes before the event starts.

The key is that you want to be appreciated for what you're offering. You don't want the clients to think that you're anything less than professional and worth every dollar that you charge. You have to keep in mind, that while some industries suffer in this economy, luxury items and services usually do not suffer. And what we offer is a luxury service