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Dec 31 2017

What I Learned After Losing $20K In A Day

This article originally appeared on our Forbes blog

When you’re learning as you go, as many first-time entrepreneurs are, each lesson comes with a price tag. Whether it’s a lost client, a quality problem, or an unforeseen delay, it almost always involves a cost you didn’t intend to pay. While in the short-term this can be painful, the key is to mine these losses so that future experiences aren’t quite so “expensive”!

In 2010 my company–a two-year old reusable bag brand–was starting to gain traction, producing orders for some of the world’s top retailers. We had just partnered with a large non-profit to create bags for a new fundraising campaign, and because of the tight deadline, brought on a new factory to produce the goods.

Everything was moving along as planned until the client reviewed a sample created by the new factory. Though happy with the bag’s quality, they requested a color change to one of the printed graphics because it didn’t match their existing swag and collateral. Naturally, we communicated the adjustment to our production manager, assuming the simple switch would be made without a hitch! However, our request was met with the following reply: “Sorry, that isn’t possible. The full order has already been made and is ready to ship. Please advise.”

From there, things quickly went south. Even though the color change was minor, the client was unwilling to accept the product as is. And because we couldn’t produce a new batch of bags before their deadline, the only option was to cancel the order completely. To make matters worse, the factory wouldn’t accept any responsibility for the snafu, claiming that they had started production in order to meet our ship date, and that the sample sent was strictly “for reference,” and not a form of approval. While their practices were questionable–since approval by way of a pre-production sample is standard–we had other time-sensitive orders in-process that would have been jeopardized by a refusal to pay, and had to go along with their demands. So, in addition to refunding the client and losing a significant sale, we still had to foot the entire bill.

Here’s what I learned from losing a big chunk of money in a short amount of time.

Have A Process For Everything

A fiasco like this could easily have been avoided. How? By creating and following a simple process to officially greenlight production. I advise all brands I work with to communicate to their supplier–in writing and prior to submitting a purchase order–that all samples will have to be approved using a specific form, and that manufacturing will not begin until the form has been received by the factory. We then identify the key personnel involved in the review process and ensure that everyone understands their role.

A system like this is not difficult or expensive to implement, yet it’s normal for new entrepreneurs to feel that formality is an overkill if an organization is still small. In fact, the opposite is true for small, budding businesses. Such systems are not only helpful for staying organized in the present, but also function as the building blocks of what your entity can become. Establishing clear guidelines and procedures is a must-have if you want to scale and experience healthy growth.

Just like the human body ingests and digests nutrients in precise ways in order to grow, a business must have consistent systems in order to retain and leverage its resources (i.e. customers and money). On the other hand, disorder and disorganization cause resources to leak out, as I so painfully learned.

Know When To Say No

His loss could also have been avoided had we simply declined/refused the order. Tight timelines are never ideal, but for new entrepreneurs they can be especially detrimental. That’s because the learning curve is steeper, and inexperience makes it harder to anticipate exactly what could go wrong. Throw in a wild card like a new supply partner or a product you’re producing for the first time and it’s definitely risky business!

Further, if you try to beat the clock and end up failing (i.e missing a deadline or delivering a poor quality product), it’s likely you’ll lose the customer involved for good. But if you politely decline and continue to nurture the relationship, you still have the opportunity to secure repeat business down the road.

It’s always painful to turn down work, but discernment and patience are key to long-term success. Trust that there will be other opportunities!

Always Build In A Buffer

When you do say yes, be realistic. Building in a buffer might mean not “wowing” the client with a super-fast turnaround, but it performs the dual role of managing customer expectations and giving you a window of opportunity to correct course if things go awry.

In this particular scenario, a built-in buffer would have allowed us to re-make the bags and deliver the order as planned. Discarding a batch of inventory is still a waste of time, money, and resources; however, the result is certainly less painful, as the customer’s total payment is likely to cover the cost of a second run. In our case we would have broken even, a much preferred outcome!

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Written by admin · Categorized: Manufacturing, Quality Control · Tagged: Entreprenuership, Mistakes, Organization

Nov 30 2017

Why I’m Grateful For The Hard Parts Of Entrepreneurship

This article originally appeared on our Forbes blog

Entrepreneurship has a bad rap for being risky, stressful, and isolating. And rightly so! I work intimately with founders and small businesspeople, and I’m constantly reminded that behind every creative and innovative venture are humans grappling with frustration, fear of failure, unrealistic expectations, and self-criticism. While bypassing these difficult feelings is unlikely, it is possible to draw wisdom and strength from the challenges of entrepreneurship. After all, from great struggle comes even greater growth.

Here are three reasons I’m grateful for the hard parts of being an entrepreneur.

If It Was Easy, Everyone Would Do It

This is a reminder I find helpful when going through a tough time, or when I need the motivation to push through a labor-intensive project. Why? Because creating and delivering a product or service is challenging enough on its own; if it were easy there would be more competitors vying for your potential customers!

I recently had to create 100 pages of written content for a visual guidebook about manufacturing. (It was as fun as it sounds.) Every time the “finished” product was ready for review, our team would find an important addition or revision, usually requiring the entire design layout be adjusted. This went on for months! But the process made me acutely aware of the creative and financial investment required to develop a truly useful resource, and thus clearer on our competitive advantage and value proposition.

If what you offer takes little risk or effort to imitate, you’ll quickly be surrounded by other players in your space. It requires significant effort and stamina to build something brick by brick, but the upside is that there’s less of a crowd!

Losing Money Is A Great Teacher

You can ace b-school, read lots of business books, and hire the best consultants, but as with most things, there’s no better teacher than real life. Until money is on the line, everything you’ve learned remains theoretical. The sting of actual, tangible loss is what produces your most profound lessons, and if you’re willing to examine these failures, you can gain lasting wisdom.

During my early years as an entrepreneur, I developed a habit of keeping a “money mistakes” journal. Every time our company made an expensive misstep–such as a production run filled with defects, or a marketing investment with no ROI–I recorded three things: a description of the event, how much money we lost, and what, in hindsight, could have been done to prevent it.

Evaluating each mistake helped me uncover unhealthy patterns (such as dismissing my gut instinct about a person or project) and ultimately make wiser, more savvy investments as time went along. While tallying up losses doesn’t exactly feel amazing, the lessons learned are here to stay.

Being Discouraged Can Build You Up

In my bleakest, most vulnerable moments, I’ve had to confront how I choose to view myself when I’m not measuring up to outside metrics of success. Making the decision to believe in your own worth after a failure or disappointment is challenging; however, the result is true, unshakeable confidence that remains with you through all of life’s challenges.

You might lose money or customers or a sense of status during your adventures, but the sense of self you develop is yours to keep. This is the real entrepreneurial gold! And for me it’s what makes the journey worth taking, even when things are hard.

Written by admin · Categorized: Lifestyle · Tagged: Entreprenuership, Mistakes, Work/Life Balance

Nov 28 2017

Four Tips For Checking Supplier References

This article originally appeared on our Forbes blog

Checking references is an important (and free!) part of the supplier vetting process. I’m surprised by how many makers either don’t request them or don’t follow through once they secure names. Further, it’s not enough to ask easy questions such as, “Do you recommend Company X?” as the goal of each conversation is to go beyond surface level information. When done properly, speaking with references should paint a fuller picture of what it would actually be like to work with a given supplier.

Here are four tips to optimize your reference checks and make more informed decisions as you source new partners.

1) Ask For More Than One Reference

Reputable suppliers should have multiple happy customers willing to endorse them. When requesting references, be clear that you’d like a few options, and let the supplier know that both past and present clients are okay. This may give them more range, as some clients in their roster will be off limits due to privacy clauses.

If a supplier refuses to provide references or will only send a single point of contact, this is usually a sign to proceed with caution.

2) Stick To Your Product Category

Speaking with references who have made products similar to yours is key. For example, if you on the hunt for a factory that specializes in structured outerwear, but the references you receive can only vouch for the supplier’s ability to produce casual knits, the intel is only so helpful. Seek confirmation that a partner is good at what you are making.

3) Create A Vetting Checklist

It always pays to be organized and methodical when vetting, especially when you’re in contact with multiple potential partners and need to collect and evaluate lots of data. Before setting up discussions with references, make a list of the questions you want each one to answer. You’ll also need somewhere to compile all of the information you receive, such as in a spreadsheet dedicated to your vetting efforts.

Here are some suggested points of inquiry:

  • Is the supplier responsive? How long do they typically take to reply to messages?
  • How long has the reference worked with the supplier?
  • Has pricing increased over time? If so, why?
  • Are deadlines usually met? If not, why?
  • If there has even been a quality issue with the factory, how was it remedied?
  • You’ll receive an extra layer of feedback if you ask questions by questions by phone since it’s possible to pick up on more nuanced forms of communication such as tone, hesitation, sarcasm, etc.

    4) Remember That No Supplier Is Perfect

    A factory doesn’t need to score 100% on price, quality, speed, responsiveness and everything else you’re looking for in order to be a worthy choice. As with any relationship, partnering with supplier requires compromises. The important thing is that you are clear-eyed about the potential trade-offs of working with one vendor over another.

    For example, if you hear repeatedly that a factory has great quality but needs to be nudged a bit to finish orders on time, you can enter the partnership knowing you’ll need to build in delivery buffers. Preparation can help eliminate unwanted surprises and offset a vendor’s weak spots. This is not to say you should ignore negative feedback, but rather a reminder that no business is perfect.

    References are likely to say positive things about a supplier, or else they wouldn’t have been chosen in the first place. By starting each conversation with the reminder that you aren’t seeking perfection but rather a solid, reliable partner, you’re more likely to receive authentic feedback.

Written by admin · Categorized: Manufacturing, Quality Control, Sourcing · Tagged: Made In The USA, Mistakes, Overseas Suppliers, Vetting

Aug 24 2017

Why You Need To Get Out Of Your “Idea Bubble” Before Launching A Product

This article originally appeared on our Forbes blog

Most people who come up with a product idea or invention are incredibly passionate. They’ve seen a need in the marketplace – most often inspired by their own day-to-day frustrations with existing products (or a lack-thereof) – and are excited to fill the gap.

This period of excitement is what I call the “idea bubble”. During which, entrepreneurs are enthusiastically planning out their product design guided by their own unique preferences, life experiences, and gut instincts. They may share their concept with friends and family to get “objective” feedback, but loved ones are likely to be encouraging rather than brutally honest. As a result, ideas in this stage exist primarily in a bubble of subjectivity.

Bubbles are only a problem if you never leave them. As difficult as it can be to hear someone say they wouldn’t buy your product, or that your price is way too high, or the design not attractive enough, this is exactly the kind of feedback makers need to collect at the beginning stage of their business. People who get too far into product development and manufacturing without thoroughly testing their concept run the risk of investing time and money into an item that few people actually want. It might sound like common sense, but after working with hundreds of start-up brands and designers I see the idea bubble trip people up again and again!

On the flip side, sometimes feedback is irrelevant and needs to be tossed aside. A few negative reactions are not enough to shift the course of a business! So how do entrepreneurs know what’s what? The answer is volume. Makers need to poll a lot of people about their product concept in order to separate one-off opinions from the general consensus of their target market.

An NYC-based business accelerator I once interviewed requires all incoming start-ups to talk to 100 prospective customers about their business concept before receiving any further support. After carrying out this work, nearly everyone makes modifications to their original business model. Whether the change is small, like adjusting the price of a product or service, or large, like deciding to target an entirely new demographic, the effect is the same: feedback forces a positive change.

Independent makers and inventors can benefit from the same approach. Set a goal to seek out between 50 and 100 ideal customers and ask them for direct feedback about a product’s design, price, branding, etc. Connecting with this many people requires getting creative! For example, a recent client making a medical garment for chronically-ill kids posted questions in various online parent support groups, spoke to her child’s doctors and nurses, and attended a conference so she could talk directly with families and care providers familiar with her customer’s needs. The response rate was fantastic.

Methods of collecting feedback vary, and can include one-on-one phone calls or in-person discussions, online surveys and polls and focus groups. Hiring a market research company can be a pricey investment for most bootstrappers, but it’s definitely an option. Remember: the goal is to leave the bubble and listen to customers, not conduct an airtight scientific research study. Questions about a product’s overall appeal, the necessity of certain features and benefits, and the target price are important, but so is allowing for open-ended conversation. In fact, off-hand comments can yield powerful insights that may fundamentally alter the design of a product, as well as inspire ideas for new products.

In order to be useful, feedback has to be measured. Inquiries like “What would you pay for this product?” or “Do you feel there is a significant need for this product in the marketplace?” are easy to track, but evaluating more nuanced intel, like the tone of a conversation or the overall level of enthusiasm from the feedback group, requires something different. In order to harvest this type of non-data, entrepreneurs must consciously avoid the trap of “hearing what they want to hear.” Giving yourself a little mental reminder to be open and clear-eyed can be helpful before each conversation!

Collecting an adequate amount of feedback will certainly require elbow grease, and in some cases, a bit of cash too. A virtual assistant to manage the project might be helpful for people juggling a day job or a family, while participation incentives such as a $50 gift card to one lucky survey winner work well too. Whatever the investment, it’s wise to spend a little money up front, before a product design has been made in bulk. The process of developing, testing, manufacturing, packaging and shipping a physical item isn’t cheap, and once it’s done, it’s done!

A maker may wholeheartedly believe there is a need for their product exactly as they’ve designed it and hopefully, that’s the case. But exposing ideas to the outside world before too many startup investments have been made can prevent wasted time and energy. Stepping out of the idea bubble as early as possible is the best way to launch a physical product.

Written by admin · Categorized: Lifestyle, Product Design · Tagged: Entreprenuership, Mistakes

Aug 10 2017

Maker’s Beware: 3 Product Entrepreneurs Share Their Biggest Rookie Mistakes

This article originally appeared on our Forbes blog

Launching a business with physical products comes with its own set of unique challenges. Here we chat with three product-entrepreneurs who share their most memorable rookie mistakes, along with how they corrected course and consequently, implemented permanent improvements in their businesses. Their anecdotes represent some of the most common missteps made by new makers. After working with designers and inventors for nearly a decade, I can confirm that nearly every newcomer who loses time, money, or momentum has done so because of one of these preventable errors!

Mistake #1: Assuming Everyone Understands What You Want

Learn to Make a Product | Maker's Beware: 3 Product Entrepreneurs Share Their Biggest Rookie Mistakes
Briana Borten
Briana Borten, Founder, The Dragontree

When Briana Borten was launching her holistic body care line, she, like most people bringing a product to life, was hyper-focused on the details. In her case, packaging was a central focus; she had beautiful labels designed for each product, and tweaked and retweaked the colors and copywriting and layout until they were just perfect. The first production run went off without a hitch, and she was was thrilled with the results.

Product sold quickly, and when it came time to re-up on inventory, she handed off the specs to a production manager who would oversee reordering. This is where the “a-word” reared its ugly head. Borten assumed that because she was providing a finished design to her team as well as her supply partners–one that she had outlined clearly and painstakingly–there would be zero confusion about her expectations for the finished product. She didn’t see the need to establish a system of checks and balances to ensure the specifications were met, because it just seemed obvious that they would be.

Production mistakes happen for a variety of reasons. Changes in personnel, calibration issues with machines, accidentally using the design files. Human error is present, if not prevalent, in manufacturing. All these variables make “assuming” a risky business.

In Borten’s case, her manager failed to request a new set of samples prior to production. Also a victim of assumption, she assumed the supplier would deliver exactly what had been sent on previous orders. She didn’t want to delay delivery by double-checking. As a result, a very large order arrived at her warehouse with incorrect labels.

The experience led Borten to implement systems to preserve quality instead of relying on the judgment of any one individual. She outlined a sampling procedure in writing that required two people to sign off on proofs, as well as a quality check that would catch any incorrect orders on site at their production facility.

Mistake #2: Having Design Tunnel Vision

Learn to Make a Product | Maker's Beware: 3 Product Entrepreneurs Share Their Biggest Rookie Mistakes
Ryann Scrafford, Founder, Charlie Rowan Designs

Ryann Scrafford did what many designers do when searching for manufacturing solutions: she looked for someone who could recreate her baby blanket designs exactly as she envisioned them, with no deviation from her original design. While it sounds logical to look for supply partners who can reproduce or make your product just the way you want it, the search for perfection can be a momentum-killer.

This is mainly because it can be hard to replicate precise specifications from supplier to supplier, particularly when it comes to materials such as fabric. Not only is there natural variation between “the same” material produced by different vendors, but there are also countless types of fabric out there, with varying weights, finishes, printing techniques and so forth. The sheer volume of choices makes searching for an exact match akin to finding the needle in the haystack. This phenomenon is true for many material components.

New design entrepreneurs are better served by looking for the best materials they can find, rather than embarking on an endless search for a perfect match. This is even more true for people producing at small quantities; since they don’t have the budget to customize orders like big brands do, they are limited to “stock options” (materials that are regularly stocked by suppliers). For example, a multinational sportswear brand may produce thousands of yards of custom performance fabric at a time, made exactly to their specifications; however, a small maker looking for this same material will not be able to find it because it’s not something that textile suppliers stock.

In order to speed up the sourcing process, be open to feedback from suppliers about what material option might work best for a design rather than making narrow requests. When Scrafford’s search for a specific fabric stalled out after a year of futile sourcing, she realized she needed to be open to new solutions. The result was a revised product line that was a bit different than her initial offering, but just as high-quality!

Mistake #3: Launching Without A Clear Pricing Strategy

Learn to Make a Product | Maker's Beware: 3 Product Entrepreneurs Share Their Biggest Rookie Mistakes
Markisha Velazquez, Founder of Junior Baby Hatter

Pricing a product correctly is central to a brand’s viability. Price too low and a venture becomes unable to sustain itself; price too high and customers won’t buy. Both options, sadly, can lead to business failure.

Markisha Velazquez launched a line of children’s hats with the best of intentions. She wanted to give parents stylish headwear options for their kids at an affordable price. She set her initial price point at $20; however, her manufacturing costs were nearly just as high. Without earning a profit, she was left with very little to market the brand, let alone keep the lights on.

She then tried applying a standard retail markup in which the cost of making a good is multiplied by 2.2 to set the wholesale price (the price that stores and other resellers pay), and then multiplied by 2.2 again to set the retail price (the price the end consumer pays). These hikes resulted in a massive slowdown of sales because they didn’t account for the most important aspect of pricing: what the market will bear.

After receiving guidance from a business coach,Velazquez dug deeper into her customers’ buying habits and examined what they were paying for other high-quality children’s accessories. First she identified brands with a similar target customer and “Made in the USA” focus, and tracked their pricing across a variety of channels, including boutiques, pop ups, and ecommerce stores.

Then she signed up for in-person craft markets, which, compared to trade shows and pop ups, provided her with an inexpensive way to get face time with actual customers. This proved to be the best source of intel, as she could see people’s reactions to pricing firsthand, as well as what styles were most likely to bring in traffic. As a bonus, she also received feedback on the fit of the hats, which helped her improve her design.

Armed with this data, she set a market-based price and then resourced the labor and materials required to make the hats to fit within the desired profit margin. Ultimately, she had to find a different fabric vendor and remove some non-essential components like design trims, but the end result was a product line that did not compromise on style or quality.Velazquez’s new pricing strategy now yields enough cash flow to run the business and to invest and grow.

Written by admin · Categorized: Manufacturing, Product Design, Quality Control · Tagged: Entreprenuership, Mistakes, Organization, Testing, Vetting

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