Friday, June 1, 2012

Confessions of an under-earner

I happened to be on the Dave Ramsey website, watching a webcast for his “EntreLeadership” series and Dave mentioned that he always asks potential employees and consulting clients what they’re reading. If you’re a business owner, and you’re not reading material meant to teach and inspire you to do better in life and business, you don’t have your eye on the ball. I usually have at least 2 or 3 books sitting on my coffee table….and none of them are fiction. I’m not opposed to reading fiction, but if you’re not where you feel that you need to be, businesswise, and you’re not doing something about it….reading Girl with a …whatever, is not going to get you there.

I am a book junkie, and I prefer an actual book over an ebook, but for those of you on a budget, between free internet podcasts, internet business articles, libraries, thrift stores, and borrowing from friends….there really is no excuse to not be constantly absorbing new information about personal growth, business growth, marketing, finances, and new techniques. You could watch a new YouTube video on face painting every single day and never get through all of the videos that are available.

So, you might be wondering what I’m currently reading…. I have The Courage to Be Rich, by Suze Orman, on my coffee table, The 21 Irrefutable Laws of Leadership, by John Maxwell, on my iPad, and I just finished Secrets of Six Figure Women, by Barbara Stanny. And in my spare time (lol) I’m listening to Dave Ramsey Entreleadership podcasts. I highly recommend his website if you have any personal finance issues or business finance issues. Using Dave’s methods and advice, our family eliminated all of our credit card debt and we’re well on our way to paying off our student loans and home way ahead of schedule.

So, the book that I just finished, Secrets of Six Figure Women, really had me a bit steamed when I read the first few chapters. I currently earn more than anyone in my family has every earned, and I’m even outpacing my husband who works for a major defense contractor and has been with the company for 20+ years. I would never in a million years consider myself an “under-earner.” But according to Barbara Stanny, I am indeed an under-earner. I have to concede that it’s not like I’m a complete slacker, since according to her definition; probably 99% of people are under-earners. An under-earner is simply someone who has settled for the status quo for the sake of comfort or due to other, often self-imposed, limitations. There are definitely areas that I need to work on.

One limitation that I’ve imposed on myself is the earning potential for my company. Comparing myself and what I do to the serious nature of my husband’s occupation, I have a hard time wrapping my head around a glitter peddler earning more than a defense contractor. Don’t get me wrong….Glitter rocks! But let’s face it; glitter is not exactly a priority in most people’s lives. I often find myself on the losing end of the profit equation because I give my staff raises, and offer new customer perks, but hesitate to raise prices even when I know that it’s needed.

How many of you are afraid to raise your prices because you feel that you would not be able to afford your prices if you were a customer? You have to realize that you don’t place as much value on something that you can easily do as someone who can’t or won’t do it themselves. I use coupons for grocery shopping, even though it takes me an hour or two each week to organize my trips, but then I’m willing to pay someone to clean my house, to mow my lawn, to clean my pool, and to tutor my kids. Sure I can do all of these things myself….but I am willing to pay whatever it takes to have someone else take care of a job that I would rather not do so that I can spend my time doing things that I would rather do. We only have so many hours available to us and we have to choose where our efforts will have the most impact. No matter how tough the economy looks, there will always be people who are willing to pay for your services. You just have to reach those people.

When I first entered the henna industry, henna artists were charging $25 - $35 per hour, while face painters were charging two to three times as much. Fortunately, henna artists have caught on and are not undercharging as much as they used to. For every henna artist in an area, you can bet there are at least a dozen face painters. So why would a henna artist charge less than a face painter? It’s very inexpensive to get started with henna, and most artists are self-taught. Henna tends to be a hobby that evolves into a business, and those who start out as hobbyists are very likely coming from an industry where they were being paid $10 an hour or less. So, it just seems unrealistic for us to go from earning $10 an hour to earning $100 an hour. We neglect to consider the hundreds of “unpaid” hours that we’ve spent learning the art and building our business. We forget that while we enjoy what we do and have obtained a certain degree of skill, it’s not something that just anyone can or wants to do. We perceive what we do as simply giving someone a temporary tattoo. The person who gave me my first henna tattoo opened a whole new world for me that was worth way more than the $3 she charged me. Sure you’re not going to change every customer’s life, but there’s more to it than you think. You’re providing entertainment, a souvenir of a special day, and the opportunity for someone to be the center of attention.

A huge issue currently facing me is that I don’t have the hours or skills available to me in order to take my business to the next level. I want to focus on getting more sales outlets selling my products. This involves developing packaging, signage, and marketing materials that are more boutique-friendly. And once I have that all in place, I have to find sales people who are able to get our products into these boutiques. So what’s holding me back? Just me. Sure there’s a financial risk, but the bigger obstacle is that I have to step waaaay out of my comfort zone to give up control in certain areas of my business. I’m working on learning website software now, and my husband told me how much he admires me for persevering on something that he knows I absolutely hate. It made me think that I need to put this perseverance to work on other areas of my business….like hiring the right people and putting those new business plans into action. It feels so much more comfortable to just keep doing what I’ve been doing and to keep earning a decent paycheck, but that’s what’s keeping me at under-earner status. If I want to earn an amazing paycheck and to see my husband retire early, I need to keep pushing the limits of my comfort zone.

So what are your self-imposed limits? Are you charging what you need to be charging for your services or are you limited by how much you feel you’re worth? Have you put off calling potential corporate clients because you feel like you’re not “big enough” to get a gig like that? Do you need to polish your website and put up new photos of your work? Do you need to learn fresh new designs instead of falling back on the same old ones that you can do with your eyes closed?

Take out a piece of paper and write down where you want your business to be in one year, in five years, and in ten years. Then write down the things that you think are preventing you from reaching those goals and tackle them one at a time. Start with the easy stuff, and work on the harder stuff as you build momentum. Chat with other artists to see how they have conquered similar problems. And read everything you can about business & marketing. It’s the quickest way to get that spark of inspiration back when you start feeling stagnant.

We’d love for you to stop by the Amerikan Body Art facebook page to let us know how you’re doing and to share some pictures.

~Erika

Sunday, April 1, 2012

What's missing from your business?

This weekend, my youngest son was invited to a skating party, and rather than suffer through ear-splitting pop music and a seizure-inducing light show, my husband and I decided to look for something else to do to kill time. You know you’re an old married couple when strolling around Home Depot qualifies as a date night. Luckily, we also found ourselves in proximity to a Panera Bread restaurant and my favorite black bean soup was being served that night.

When we walked into the restaurant, it was well after the dinner time rush and there were few patrons in the restaurant. I only briefly glanced at the bakery goodies, figuring someone would be at the counter to serve us in a jiffy. But this was not to be the case. There were at least a dozen workers going back and forth from the front of the store to the back of the store. Every now and then, someone would pause from their task to ask if someone had helped us yet. We would say, “no,” they would mumble something and scurry off, leaving us to wonder if we’re supposed to wait or just dish out our own soup.

Now, I am not denying that every person in that place was working their tushies off. Everyone was doing some very important job that was required to keep the business running. However, there was obviously a very important cog that was missing from their business machine. You can cook all the food and do all the dishes and stock all the bakery cases as much as you want….but without someone to serve the customer, everything else is pointless.

Whenever I come across either a really great or a really poor customer experience, I try to relate it to my own business and ask myself if there is something I can learn from the experience to make my own business better. Even though we’re a relatively mature business, we still find ourselves rapidly evolving to keep up with market trends and new product developments. This evolution allows us to still see a 20% or greater increase in sales each year, when other companies of a similar age might have leveled out with a very small annual sales increase. On the other hand, these changes also mean that certain parts of our business can become neglected.

For example, we have a tendency to want to focus our efforts on tradeshows where we make a profit, while other companies are willing to accept that a tradeshow is a place to meet new customers and introduce new products. There are plenty of companies that exhibit at tradeshows and don’t sell a single item at the show. When we avoid smaller shows and more expensive shows in an effort to minimize expenses, we fail to expose ourselves to new potential customers. In the past, we’ve exhibited at shows where one new customer was a big enough account to have made the entire expense of the show worthwhile. We’ve already started tackling this problem by signing up for some new shows for the upcoming year in areas of the country where we feel our customers have not had the opportunity to meet us face to face. And we are planning to offer workshops in our new building so people can learn in a smaller setting, without the expense of a convention.

Another area of our business that has been neglected is our website. While our current website is adequate, and way better than our previous website, there are still some functionality issues that have not been addressed and are potentially frustrating our customers. I know that I’ve left a website for no other reason than there was annoying music or a long-loading flash presentation. I can imagine that plenty of people have left our website without making a purchase because the shopping cart didn’t work well on their Mac computer or because we don’t have a search function. Not only is that a loss of an immediate sale, but that could very well be a permanent loss of a customer. They are going to look around for another company who meets their needs. And once a customer finds someone who meets their needs, they are very unlikely to switch back to your company. I have been researching new shopping cart software and hope to get some of those problems resolved within the next few months.

When was the last time you really analyzed your business shortcomings and did something about it? Is there a part of your business that you hate doing so it doesn’t get done? Have you considered hiring someone to do that job in your business? Do you find yourself in a rut and accepting the status quo rather than stepping out of your comfort zone to grow your business? Start looking at what your colleagues are offering their customers and ask yourself if you’re being competitive. Why would someone choose your company over another company? (And you should know that price is not always the determining factor when customers choose a company.) How much effort are you putting into advertising? Have you looked for every free and inexpensive place to advertise your company? Have you included an advertising budget in your business plan? Do you update your current customers when you have new products and services to offer? How does your website look? Is it easy to navigate? Does it show up in search engines? Sure having a great product to sell or being a fabulous artist is important to your business. But without all of these other areas of your business taken care of, your business cannot function effectively.

Just like in life, we let our diets slip when we get busy, and our household chores get neglected, leaving our house falling apart in places….our business can start looking just as shabby without us realizing it. It’s a gradual process and it happens to all of us. You have to step back and look at your business through the eyes of both a new customer and an old customer. Your product shouldn’t be just as good as it’s always been, it should be better than it’s ever been. Don’t be afraid to ask your current customers how they feel and if they would like you to address some part of your offerings. They’ll appreciate that you care and the changes that you make can attract new business.

I hope you are all as excited as I am about the weather warming up and the upcoming busy season.
Have a wonderfully prosperous month!

~Erika

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