I wanted to write something that shows some honest humanity behind the journey of being a relatively new entrepreneur.
I wanted to write and show that not every person who starts a business goes from idea to $20k MRR in 6 days.
This isn't a how-to or an advice post. Nor is it comprehensive.
// About Me
- I'm a natural introvert who has spent most of my working life (15 years) figuring out who I am and what I like doing. I started university at 23, took 5.5 years to get a music degree I haven't ever used, worked in various forms of construction then ran a homeless shelter for almost 4 years.
- I am nervous and fearful. Pretty much about everything, all the time. A few years ago I found some tools to overcome depression and I'm still working on it.
- Left home at 16, had a kid at 18, married my high school girlfriend at 20 and we're still married.
- I'm a functionally creative person. I grew up being taught to stay within the lines so I learned to take my creativity and make it useful. Art for art's sake wasn't encouraged.
- I'm not competitive but I like personal growth. I do things because I learn and grow. If I'm not doing either, I get bored and complacent.
- I've started a couple businesses before this that never got off the ground. A music blog and artist accelerator that didn't go anywhere and a songwriting business that sputtered (and that might even be a generous description).
// My business now
- A social enterprise food company. We work directly with rural farmers in Colombia to develop and export products. We sell the products and put money back into the farmers' communities through educational initiatives in rural schools and by teaching farmers about sustainable agriculture (not my expertise, but that's why I have partners).
- Our first (and only right now) offering is 2 series' of coffee, next will be either quinoa or cocoa.
- I have 4 business partners (3 in Colombia, 1 here with me in Canada).
- Registered in 2016, started selling hard only 2 months ago (more on this coming up).
// Sales
April's revenue from all sources was $1,300. May's revenue is $2,400.
- I sell direct to customer and to retailers.
- Less than 10% of revenue is through e-commerce.
- Most B2C sales right now are done via text, whatsapp or facebook messenger with friends, family, friends of family, family of friends, etc.
- I focus on sales 3 days a week right now, and the other days I deliver or do other businessy stuff.
Sales is my biggest area of personal growth. I'm not a natural salesman and I see that as an advantage. I used to hate inconveniencing people, putting them out, or making them feel uncomfortable. I've learned to approach sales through relationship, through a lens of caring for someone.
For example, I care that you enjoy your coffee in the morning before your brood of offspring get up because it starts your day off right and you hate yourself less because you yell at them less. I care that you have heartburn from your shitty tin-can coffee so I want you to drink mine because that won't happen.
It's not revolutionary, it's just one of the ways that I've approached the "solve a problem for your customers" sales strategy.
Cold-calling is out of my comfort zone at this point, but I will occasionally drop into a store/cafe/restaurant if I'm feeling outgoing. I lean heavily on warm referrals and cold emails. My open rate on cold emails is 80% and response rate in the first niche I'm attempting to tackle is 60%. It's a little too early to calculate the conversion rate as my sales cycle can be somewhat long for places like cafes or offices, but as a guesstimate its around 10-12%.
I need to set some new sales targets for June and July. I hit May's target in the first half of the month. Things are growing better than my conservative estimates (30% for first 4 months, 20% for next 3, then 7% for the rest of 2019).
// Work IN your business
At first, I got caught up in what I thought was sage advice. You see it everywhere. Work on your business not in your business. My problem with that advice is that you won't have good accurate knowledge of your business unless you spend significant time working IN your business.
For example: My books were decent to the untrained eye but I didn't really understand what I was recording and why I was recording it. I didn't understand what I needed my financial statements to tell me because I didn't know what was important (beyond the bottom line) to my business.
Work on everything for a solid length of time until you can say you are more-than-competent at it... then you can consider handing it off to someone.
Customer service calls/complaints? That's my chance to build loyal customers. You also get to deeply understand customers' frustrations and disappointments or the things about your product that excites them and makes them happy. Since I'm the one who does the main customer service AND the sales, this info will helps me craft my pitch and increase my confidence in it.
Don't outsource too early at the expense of intimately knowing your business.
// Bootstrap until it doesn't make sense anymore
... for some it will never make sense.
I have little authority here, but here's what I've noticed: Bootstrapping forces you to make different decisions than you would if you had a full bank account. Yeah that's not rocket surgery, I know. But we often overlook this important fact because we think of how sexy it will be to raise gargantuan series As and Bs. But the sex-appeal aside, I think you'll typically make more creative and more well-researched decisions early on which could be crucial to future success if you don't.
It also forces you to spend more time creatively lowering your COGS. I started with a 20% gross profit margin 2 months ago. It's is now 41% and will be 52% by the end of the summer. These still aren't all that healthy for a food manufacturing business, but I'm busting my hump to make sure I get there. Testing my assumptions (such as the type of bag or label consumers prefer) has been the main driver.
Recently I've been approached by investors and, for me, I believe the timing is right to start the conversation. In order to increase my margins I need to purchase in larger quantities. I need capital to do that and LOCs, loans or investors could get me there. To me that's just a better reason to seek investment than chasing the YCombinator dream from the starting blocks.
// Passion
In a day where we have near infinite access to near infinite data I see people starting businesses that they care little about just because they know they can make money at it. Affiliate marketing, t-shirt drop-shipping, etc. That doesn't work for me.
I'm an introvert. Passion is important.
For me everything I do is driven by the fact that I've seen firsthand the farming conditions, I've seen the corruption in the supply chain and I love and respect the Colombian people.
I can do stuff that scares me when I have more passion than I have fear.
// Learn
I see it all as a process of learning rather than 'accomplishing.' I've posted some pretty dumb questions in r/entrepreneur or r/smallbusiness as evidence.
- learning to be a better salesman
- learning accounting
- learning about my blind spots or gaps in knowledge
- learning what scares me and how to manage or overcome it
- learning what motivates me and how slow-burn that fuel
Instead of...
- selling more
- dominating the market
- building an empire
- etc.
I still get a little bit down on my self for not knowing things. I tell myself stupid stuff like "a good entrepreneur would know this stuff" or "you'll never do as well as [person x] because of [the reason]" or even "I bet [so and so] never struggled with [this problem]."
As cliche as it sounds (and it is) we all have different starting points and finishing points. My journey is not yours.
I'd say if you're like me and tend to be hard on yourself or say things like "yeah that was good, but I wish it was like this..." just take it easy and know that you're learning and that's ultimately what it's all about.
Musk can launch a rocket to colonize another planet. I can help a couple hundred farmers in South America. Both are pretty sweet.
// The next 6 months...
- reduce COGS (noted above)
- learn how to sell better to restaurants/cafes
- increase social media presence and email list (both are very lackluster, atm)
- set and hit new - more aggressive - revenue targets
- get in with a national grocery chain
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