The power of a 'reframe'... even doing your annual accounts can be enjoyable!
From dreading doing my accounts, to planning 2019, to launching an online course on how to launch a product based business! My tax return turned out to be a lot more pleasurable than I’d imaged!
I have just finished doing my accounts for the year for Snuggle Truffle, my online homeware business.
I do not like doing accounts.
It takes the fun out of having your own business. It feels a bit sensible. It feels a bit like ‘homework’ you cant avoid.
I was dreading doing the accounts. I kept putting it off, opening the laptop, closing the laptop. I had a look at using Xero, which is the new accounting system that I use, I kept opening it, closing it. Sorting out my invoices, opening the file, closing the file.
I got very good at finding other things to do instead.
Things I prioritised instead of doing my accounts: sorting out my daughter’s clothes including matching odd socks and throwing away single ones, rearranging the book shelf – using height, not topic (we have just moved into a new house so I could kind of justify this?), changing light bulbs to more eco friendly ones, meeting a friend for lunch, shopping at Sainsbury’s (hate food shopping).
Procrastinating at its best.
It went on and eventually I knew I had to find a way to enjoy it. Actually, I like numbers, targets, planning… I just don’t like spreadsheets, invoices, VAT. They are very processy, they are very horizontal.
I needed to make them interesting, vertical, perhaps make it into some kind of ‘mindful accounting’ experience.
Time for a ‘reframe’: Not wasted time, precious time used to reevaluate
Penny dropped, doing the accounts is a not just a process. It can be a time to reflect. To look at the story of the business for the last 12 months.
It felt a bit indulgent, especially at this time of year, last December was the strongest performing month. But the tax man wants his forms filled in so time must be created.
I spent a few hours going through the P&L, going through stock, looking at who had bought products online. Of course I did this with the help of my trusty ‘post-it’ friend, and a good old mind map. As I filled in the spreadsheets I made notes on the post-its. It was easy to group into stick, twist, bust – things Id do again, things I need to change, things I need to stop. Soon a beautiful wall of neon pink and yellow emerged and with it a bit of direction for 2019.
Now. I did mention before that I’m a top procrastinator… or at least diversion creator. And I did find myself starting to create my 2019 strategy plan, so discipline, focus, back to task in hand – set myself 60 more minutes to get it all done and over to my accountants. Phew. Back to Christmas gift sales.
What was the story I found in my accounts?
It has been a mixed first year, there's been days when I've made good sales and absolutely smashed it, and it's no coincidence that those days, I put a huge amount of effort in. When you really focus and you get your posts out on social media, you talk to people who were interested, you send an email out with the offers that you've researched, you get something back, that's what happens. It’s not straight forward and there are many setbacks where your energy and resilience are tested.
Here are a few of my notes taken from my Post-It notes…
Your first year in business will not be as you expected
The cost of setting up will be at least 3 times you put into your plan
For every 15 activities you plan you will get 1 success… (14 no’s, 14 sighs, 14 ‘can I do this?’)
Take the example of Christmas Fairs
Doing markets this year has been a huge learning. I planned it, I did a lot of research. I spent time visiting markets and fairs watching what was happening, watching what people were buying, watching how people were interacting, how the traders sold and I took lots and lots of notes on it.
So, I felt prepared. I didn’t overwhelm the schedule. I was very selective. I set a budget. I ordered stock in that matched what customers were buying and set market prices and deals tailored to each event.
We just about broken even.
You could say that’s not bad for year 1. But I’ll be honest and say it was disappointing.
However… lessons, lessons everywhere!
One of the events I did quite a bit of Facebook Live posts, and shared online offers (QVC style) and promoted specific products as well as the event. In one of those days I made more online than I did at the event. It’s all sales and I attributed those online sales to the event as part of the review. They would not have happened without the event.
It’s not always obvious where a sale comes from. It can come from unexpected places. And no matter how much you have articulated your ideal customer, created a persona and target audience – there will always be a left field purchase. The trick is to decide is it a one-off or is this something worth exploring further. Is this a distraction or is it a game changer.
Sometimes it's easy just to give up and say ‘ Well we broke even, that'll do, we tried’. But it's a long-term game, it's not a short-term gain, when you set up a product or a new brand. You have to keep plugging away and plugging away and you're going to have setbacks. You have to invest time to think about what happened with setbacks and get yourself back up again and use it as an opportunity to have a refresh and keep going.
For a sense of perspective, it took Amazon more than 14 years—58 quarters after its May 1997 initial public offering—to make, cumulatively, as much profit as it produces in one quarter these days.
It first reported a quarterly profit in the fourth quarter of 2001. “Investing in future growth is more important than hitting quarterly earnings targets” Jeff Bezos, Amazon CEO
If you are going to launch a business, any business, you have to be in it for the long haul to get maximum rewards.
Sharing my lessons
I've gone from feeling a bit cranky about having to do my accounts, right in the middle of peak selling time, to feeling excited about 2019. It’s taking a lot of effort to hold me back on detailed planning but come January that’s where I’ll be focusing.
Here are six things, from my post-it notes, to pass on to you if you are thinking about setting up an online product business
You do not need to be ‘complete’ to launch
You don't have to get all of the detail in place before you launch. You don't have to have a brand either. Get a few samples, get a few prototypes, order a few wholesale items that are close to your idea.
2. Start to talk to people about your concept and listen to what they say
Be brave, go and talk to people and say, "This is my idea, what do you think, do you want to buy, how would you use it?" Write down everything that comes up in conversations. There will so many clues. Don’t forget to ask the key question ‘would you buy this’? I see a lot of people asking for feedback and at the end of someone giving them lots of opinions they say ‘ but I wouldn’t buy it, I’m not your audience. That’s fine, but make notes of who said what.
3. Think about your first stage distribution channel – you don’t have to set up a website (yet)
When you get into deeper planning about distribution, challenge your thinking. You don’t have to have your own website. There are many options where you start to build your business without creating a lot of running costs. Online you could use a shopping platform such as etsy or nuMonday which lets you create your own store within their store, you could look into Amazon marketplace, you could use Facebook business page. Offline you could have a market stall. Match you’re the way you will sell to people to who they are and where they are. If you are selling Christmas decorations focus on Christmas Fairs. The fabulous brand Coco & Ned solely sell in Christmas markets from September until December. They have no website. They know where their customers are and they go to them.
4. Don’t buy in super bulk stock at first, even if it’s a great price.
No matter how good the deal, don’t become a Delboy. You’ll have a house or garage full of stock that you are then trying to find a market for. Instead, follow the prelaunch testing plan and once you have interest then look into to how you will distribute. Your supplier might do dropshipping, you could run a pre-order campaign. There are options without having to a mega stock pile upfront.
5. Don’t worry about branding for too long
Have a basic idea, keep everything simple at first and branding will flow as you develop your product and business. If you spend too much time (and money) on branding in the beginning you will be stuck with a concept that might not work with where you are when you launch. You could use your branding development as part of your launch to attract people to get involved, and therefore have awareness of who you are.
6. Play to your strengths, be prepared to invest where you have gaps
There are people out there ready to help you make this a success. If you know what you are good at, or more importantly you know what you aren’t so good at - be prepared to invest in help. Example, if you aren’t hot on social media, and social media is an important factor in your plan, find a social media manager to help you. If you aren’t great at selling face to face and your plan is based completely on face to face, find someone who can doing the selling for you. You cant do it all. You can try, but it will take longer to launch, if you launch at all!
I said 6 things but I’ve added one more…
7. Try to enjoy it. This should be an exciting, enjoyable experience.
There will be set backs, there will be moment you wonder what you are doing, but the majority of the time you should be proud and get energy from telling people about your business.
The more time that you spend chatting to customers, getting pre-orders, getting research as you're growing your business, the more it will reduce the feeling that all this is a huge risk. Certainly, when I look at my accounts, in some areas, I could have done things so much differently.
If you're sitting there and thinking January might be your moment, 2019 is the right time to do this then my advice is – plan it, do it, replan, redo, repeat.
Good Luck!
If you want more help and advice you can find me on www.anotherdoor.co.uk/the-community