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1 In Business Insight/ News

Tying Up Ends: Setting Goals

tying up ends

Before I dive in, an introduction! This will be a reoccurring series that gives you a glimpse behind the scenes of how my business works [as opposed to the Behind The Scenes series, which shows y’all my business week from my eyes, usually with photos] as well as offering tips that I’ve gleaned from my personal experience as a small fiber business owner. My qualifications? Well, I’ve been dabbling in running various adventures since 1990, from small self-published books and ‘zines to hand made incense/herbal products/bath and beauty to running and promoting club nights and craft shows [alone and in committee] to starting my own fiber business that grew from a couple of handspun yarns to a real retail space and working studio. I have a strong entrepreneurial spirit but also an innate sense of fairness and community that makes me want to bring everyone along with me up the ladder of success. I hope that ladder is a wide one!

I’m pretty well known for sharing my true feelings and both successes and failures here on my blog, which amazes some people – I think because we’re taught to hide any failures away, to not show vulnerability lest someone take advantage. But a secret about choosing to be vulnerable: it gives you power. It can make you the one controlling how your failure is received and viewed. And how you handle that failure is very important.

I have been talking recently about this with friends – so many people overerestimate what they can handle in their business, get in over their head, and then “deal” with it by not dealing at all – covering it up, ignoring that it happened, and often getting even deeper in a hole. That can apply to overextending oneself in regards to how much work one can handle, or how much debt is realistic, for just two examples. And unfortunately the push is to DO more, HAVE more: to bring in more money [in theory] by promising work instead of selling work already done; to have a better selection of tools and supplies by spending what we don’t have in hand, but instead using credit or a promise to pay.

DON’T DO THIS. Not in the beginning, anyway. Not until you are 100% sure of what you can handle – and honestly, I don’t recommend it even then. One illness, one accident, one unexpected event can throw off all the momentum and balances you’ve set up, and once that happens it is really hard to recover!

A really good example of overextending one’s output is the Dreaded Club. What do I mean by “dreaded club?” Well, a lot of fiber artists and yarnies – myself included – set up club subscriptions for our customers to buy, with the intention to receive x months of product in a certain theme or with certain perks for a [usually] discounted price. It’s a nice way for the seller to get a chunk of money upfront for supplies, etc, and the customer expects something fun in his or her mailbox every month without having to think about it, which is a nice treat.

However, the DC often goes awry. It’s not usually* the intention of the seller for this to happen! Either the seller overestimates his or her ability to keep up, or there’s a crisis that means money needs to come in to cover the emergency [there’s a whole blog post for the future, right there], or some unexpected calamity happens that throws off the seller’s game. At this point, it would be best for the seller to STOP and be truthful with the customers. The seller should tell them that things went off the rails and how, apologize, and OFFER SOME SOLUTIONS. Examples: refunds, adding more months to the subscription [be careful!], asking for patience if it realistically feels like the situation could be resolved quickly. It’s better to over-update than under-update, really and truly. Tone is important here, too – genuine apologies, humbleness, and gratefulness are all key. Tell customers what’s wrong but stress that what you care about is making it right with them. And once you fix the issue, it is SUPER important to put in place systems that will keep it from happening ever again. That may be a firm cut-off number for special orders, holding on to all monies brought in from clubs until they are fulfilled, or banning yourself from running more clubs if need be.

If this does happen to you, don’t beat yourself up over it – just move as quickly as possible to fix the problem. Be honest, clear, and armed with a plan, and you’ll dig yourself back out. Everyone overextends, it’s how you handle it and what you do to make sure it never happens again that is key.

awesomeness

The debt thing… oh man.

This one is a hole that is SO EASY to fall into. There’s a certain mindset that says that you have to spend money to make money – and while obviously that’s right in a product-driven business, you have to be careful not to spend over what you can realistically pay back and still make money on your products, too.

I know people who are funding their entire businesses off of credit cards, and buying all the fancy tools with them, too. There’s a couple of problems with this… one, if you’re pretty new, you have NO idea what your regular income is going to be. It’s all guesswork for at least the first year, because you’re finding your own footing and right customers. You can’t bank on selling any of your product right away, and if you’ve bought all the supplies with credit, that means that you’re sitting on a debt that is accruing interest, while your products wait to find the right buyer. You’re actively losing money at this point! What I see happen the most is that people get excited, over-buy supplies and get the fanciest tools for running the business before the biz is a proven money-maker, and then end up with a huge bill. Now if you have the extra money just lying around, I guess that’s okay. But if you’re like me, you don’t know what “extra money” is. [seriously, is there such a thing?]

What I did – and of course this is not the only way to start a business – was to buy enough supplies to test the water. I already had the basic tools that I needed – a spindle, then hand cards, and some fiber – and when I found that my yarn had demand, I invested in a small amount of extra fiber to extend my creating and selling ability. I sold to a local yarn shop and on Etsy, and as I sold yarn, I re-invested that money into supplies, advertising, and tools. I built up my stock slowly, gauging interest in what I was doing, so I never overextended my resources.

I did that from a spindle and fiber into what I have today – an actual retail space and fiber studio. I never used credit. I never put myself into debt. I did do some trading with people for things that I needed, including some small crowdsourcing with really good benefits for the investors – but I never spent money that I didn’t have. And this way, I owe no one business money other than my consignors at any given time, and what I bring in via the business goes to immediate concerns, not interest-accruing loans.

Obviously, as I said before, this isn’t the path for everyone. But there’s a lot to be said for starting slowly, keeping pace with what you know you can handle, and not overextending yourself or your resources. It has kept me afloat and in business. And I wanted to mention this little tidbit:

Back in 2011, I attended the Summit of Awesome here in Baltimore. It was hugely inspirational for me, as I’d recently moved back To B’more and was struggling to find a new focus, and I knew I wanted to keep building my business as my sole income. One of the best parts of the weekend was listening to Tara Gentile and Megan Auman. And they had us all write down a monetary goal, one that we thought we might have to struggle hard to achieve. When I shared mine, they said it was too low. [it was.] I upped it, and they said that it STILL was too low, but it was headed in the right direction [aka UP]. I couldn’t imagine ever making the revised number in the situation that I was in – but now, with the studio, I did indeed hit that number and have plans to take my income well beyond that for this year. IT CAN BE DONE. It CAN. You need a good plan, and sense, but most of all you need imagination and the ability to believe in yourself. I never thought about adding Rob to the business until the day I asked him to make me a big pair of wooden knitting needles. That started something HUGE [pun? sure.] that has really gotten Threeravens growing – and that’s all because of our imaginations. We thought of it, people saw our enthusiasm, and now we can’t stop making stuff. 😀

Is there a business question you think I could help you with? I can only draw from my own experiences, and I am not a lawyer or anything other than a fiber artist, but I am happy to share whatever insight I have. If I don’t have the answer, I probably know someone who does! Send me an email or Facebook message with any questions or topics!

*Google “yarn dyer dead for 10 minutes” for an example of what’s not usual or honest in the world of people losing their shit over being over their head with their clubs. Ahem.
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1 Comment

  • Reply
    Jo
    April 28, 2014 at 3:59 am

    Thank you so much for this post, it has come at just the right time for me. I am just starting up and really feel the temptation to upgrade my equipment in order to make more awesome stuff. It is really hard to find the right balance between enthusiasm for a new project and realism.

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