It’s Not the Economy’s Fault

When people are getting laid off left and right, sales slow down, customers stop coming, stores start closing, people blame the economy.  We’re in a recession, depression, the sky is falling.

We always get asked by vendors and customers if this so-called recession has affected our business.   I’d say it’s yes and no.  As far as sales are concerned and demand for our products, no, it has not gone down.  It has actually increased.  If the recent trade show we exhibited at is any indication of demand for our products, it has grown by at least 50% from last year, which was twice as big as the year prior.  But as far as operations, it has affected us big time.  It’s harder to do business because creditors are getting tighter and suppliers aren’t willing to offer the same terms.  We had to learn really quickly to operate on cash instead of credit.   Employees are getting laid off at factories that make materials for our products and in turn affect the quality and timeliness that we get our materials and products.  We’ve seen a few wholesale customers close for business, but we’re still constantly adding more retailers.  We’re still “business as usual” around here.  I’m still developing new products, trying to improve our current line, trying to find better ways to help make our operations more efficient.  We’ve not cut back on advertising–we’ve not really done much advertising to begin with anyway.   But we’ve got A LOT of things in the pipeline that we’re working on.

It’s such a joy to come across vendors, suppliers and customers who don’t believe in what the media has been bombarding us with since last year.  These are companies that are also still operating business as usual.  They’re still around for a reason.

I think the most volatile businesses are those that just thrive on when the going is easy and customers are aplenty.  They’re the ones that don’t offer anything really extraordinary that you can easily do without them in a pinch.  These are the stores that survive on selling green circle widgets because it’s the IN thing to do.  When people start looking for blue square widgets and they have a stock room full of green circle ones, they either fold up or learn to deal with the situation by either stocking up on the blue square widgets, making the old green circle widgets look “retro”, or finding the red triangle widgets before everybody else does.  Now if you are a widget manufacturer, and there are a hundred others like you that make the same thing, unless you can make widgets better, faster, or are easier to deal with, chances are that your business has slowed down as well.  If you’re an employee, unless you’re really contributing something to the company that nobody else can do, your job is just as volatile.  Gone are the days when all you have to do is show up and do as you’re told.  Now you have to show up early, not only do as you’re told, but either ask or volunteer to do more –without asking for a raise.

Now isn’t the time to be just doing what everyone else is doing.  Now’s the time to be more innovative than ever.  Now’s the time to prove what you’re really worth.  If you, your job or business gets run over or kicked off over to the side, it’s not the economy’s fault.  It’s because you haven’t done anything to stop traffic.

Another Reason Why Made in the U.S. Kicks Ass–Insights from China

We get a lot of wholesale inquiries every week from retailers all over the world wanting to carry our products in their online or brick and mortar stores.  For the longest time, the only inquiries we always ignored were the ones that were from China.  Why on earth would someone from China want to buy our products at 6, 8 or even 10 times the cost of what they could spend to make it in their own country?   By the time our diapers reach them, after all the fees and shipping costs are in, they might have to sell our diapers for $30 a piece.  Who can afford that in China when most people only get paid a couple dollars per day (from what I’ve heard)?  We did wonder if they were just trying to get samples to knock off.  But that’s already happening anyway, so that couldn’t be the reason why.  A couple of retailers were really persistent and kept following up on their application even after my husband (who screens all wholesale inquiries) has already politely declined their applications.  Curiosity finally got the best of him, so he decided to ask them lots of questions to get to the root of why they really want to buy our products.  Their answers were far from what we expected at all.

Apparently in China, because of their one-child policy, most babies are really treasured and pampered.  An average middle-class household brings home about $1,200 per month, and approximately 50% of that is spent on the child.  $600 per month to spend on babies is a lot of money even here in the U.S.!  In most cases, there is no rent or mortgage to pay because the family usually lives with the grandparents, who also take care of the child while the parents work.  When asked why they would want to spend 10x the amount buying our products versus buying a similar product that was made in China, they said that most of the educated and wealthy people in China perceived products that were made in the U.S. as being the safest for babies.  None of that lead and melamine-tainted crap that’s been all over the news.  And since they were only having one child anyway, they don’t mind paying top dollar knowing that the product they are using on their child is of the best quality.  With our products being mostly made here in the U.S., it is a very attractive feature for those from China, and a lot of other Asian countries for that matter.

I thought that was really interesting.  I know a lot of moms here in the U.S. are tripping all over the bargain $3-6-made-in-China diapers, that are nothing more than just knock-offs of U.S. brands, that they get to score on Ebay and other places online, when a lot of people in China themselves won’t even touch that stuff to use on their own children.

To a Child, Love is Spelled T-I-M-E

I have been busy the last couple of weeks, and will be busy the next few more weeks, trying to prepare for a big trade show in September.  I’ve got new products lined up, prototypes and samples to create, marketing materials to design, and taking care of all the logistical details of exhibiting in a trade show.  In addition, I’m adding a new brand/product line, coordinating production and materials for 3, possibly 4 manufacturing facilities, and trying to get our websites a total makeover.  Most of my days are now spent either in front of the computer or in my sewing room.  I’m always trying to get the baby to sleep, and stay asleep, just so I can finish the list of things I have to do.

This weekend, my husband took our boys fishing for the first time.  They were so excited about the whole thing.  They went and bought their own little fishing rods and tackle boxes.  In between the actual fishing, they dug up worms, stepped on cow shit, got bit by bugs, and picked beans, cucumbers, cabbage and corn from the garden of my husband’s grandfather’s farm.  Despite coming home all dirty, sweaty and missing their naps, which usually makes them highly irritable, they were in good spirits the kept playing with their new fishing rods and tackle boxes, long after they’ve gotten back to civilization.  I didn’t go with them, and stayed in our bug-free, animal-poop-free, air-conditioned world I call our home.

My husband and I try to work hard to provide our family with the best life possible.  But in the midst of everything I’m doing for the business, I always have to remind myself of what really matters for my family and the kids, and the need to slow down once in a while.  This short movie really says it all.

9 Things You Need to Know About Starting a Business

A lot of people dream of having their own businesses, and with good reason.  Having your own business can be very rewarding.  However, along with the rewards come responsibilities associated with it.   It’s not all glamor, excitement and counting gold nuggets.   I’ve had my own ups and downs with all the businesses I’ve been involved in and have learned a great deal from them.   And because most of our friends are business owners as well, we get to learn from their experiences.  If you’re dead set on starting your own business…and I mean a REAL business–not some wishy-washy idea that comes & goes, here’s a few things you need to know:

1. Don’t start too small. A lot of people start businesses thinking they’ll only spend so much, and if things go well, they’ll reinvest the money to grow the business.  But if things don’t do too well, at least they’re not out too much money.  This tactic may have worked a few decades ago when there wasn’t much competition anywhere, but if you’re going to build a business to compete in today’s marketplace that’s bombarding the average consumer with tens of thousands of ads at a time, you need to stand out from the rest.  Where do you want your business to ultimately be?  Do you want a $10 million/yr business or a $500/yr business?  Your image has to reflect that.  Invest in a good storefront, real estate, professional logos & websites.  Invest wisely in the things that will create the best first impression to your customer, because you never get a second chance to create a first impression.  When your website, storefront, or even your business card looks un-professionally made, it gives customers the impression that you do not have enough confidence in the ability of your business to make money that you’re already skimping on some of the necessities.

Think of it this way, do you ever go on a date looking like you just got out of bed thinking if it doesn’t work out, then at least you didn’t waste too much time trying to look good and buying nice outfits?  Even if you’ve got the most amazing personality, your date will most likely not be too happy to see you (or smell you) and might spend the entire time looking at other people. If you’re starting a business with the mentality of holding back for fear that it MIGHT not work, you’re already setting yourself up for failure.  You will have better chances of success with a mindset that has no other choice than to make it work like your life depended on it.

2. Know who your customers are. This is something you really need to spend some time on and what most people ignore.  You really need to know who you will want to cater to, because this will determine the type of marketing/advertising campaigns you will want to implement.   Don’t make the mistake of trying to make any living human being your customer.   If you have a restaurant, you don’t just target anyone that eats.   If you sell baseball caps, you can’t just market to anyone with a head.   Wal-Mart sells jeans for $15, and 7 for all Mankind sells $150 jeans.   That alone tells you what type of customers each brand is targeting.   If you make organic bird food for parakeets, your target market is not anyone that has a pet bird.   I don’t think a 5 yr old could care less if the bird food he has is organic or not…much less if it’s for the right bird.   You need to pick what type of customers you will want to deal with.    What traits do they have?   Where do they hang out?   What will motivate them to buy your product?   What are their buying habits?   These will help you know how to ultimately reach your ideal customer.  Trust me, you do not want to have just any type of customer.

3.  Narrow down exactly what you’re bringing to the table. Figure out what unique value you can offer to your customers that will differentiate you from everybody else in the same field.   What do you stand for?   What will your company stand for?   You can either position yourself as the cheapest place to buy widgets, the one with the most widget variety, or the one with the most expensive widgets that gets delivered to your door and professionally installed.  Just decide whatever will work for you.   If you think you want to be known for having the cheapest widget in the market, there’s nothing wrong with that as long as you can sustain the business this way.  Just don’t try to be everything to everybody because you end up being a nobody.

4.  Be always prepared for chaos. I don’t care if you have an MBA from the most expensive school and have a 400-page detailed business plan.  Things won’t always turn out as planned and having a business is not always a bed of roses.   But it’s usually during the most challenging times when you learn the most.  Until you really figure out what you’re doing, start up businesses can feel like 24 hr/day jobs.  Even the best laid out business plans don’t always work.  And your ability to weather through the chaos will determine how far you’ll go.

5.  Whatever you think your start up costs will be, add at least 50% more on top of that. There are a lot of expenses that get overlooked when launching a business.  And however long you think something will take, double the estimated time frame.  If your suppliers are quoting you 2 weeks, prepare for 4 weeks instead.

6.  You need to know how to interact with people. Many entrepreneurs are introverts.  A lot of them think they can just hide behind their products and count their beans while they wait for customers to hopefully buy their products/services.  Unfortunately it doesn’t work that way.  Even if you have a web-based business, you still have to interact with live humans.  You still have to market yourself.  Most successful businesses are built on relationships.  Because almost all businesses, no matter what field it’s in, really boils down to it being a people business.  If you’re in real estate, you’re in the people business selling homes or investments.  If you’re a pharmaceutical sales rep, you’re in the people business selling drugs (legal ones, hopefully).  If you’re an artist, you’re in the people business selling art.  Any type of business will revolve around people and their wants and needs, and you have to know what makes your customers tick.  Because I do know for a fact that if you’re selling dog biscuits, your customer’s dog isn’t the one who will whip out the credit card.

7.  You will need to develop a thick skin….a really thick skin.  When you deal with the public, you open yourself up for a lot of scrutiny and criticism.  The bigger the business you want to build, the more customers you will have to deal with.  There are all sorts of people out there, and they have their own opinions on what they’re entitled to.   If you target your customers properly, you shouldn’t have too many of the “challenging” customers.  One bad customer can sometimes put a damper on a really good day.  Be prepared to be able to handle comments like: “$@#$%^&****#&;$!!!!  #$%^*#@#@/>!!!!!!!!!!!!”  You need to be able to let these things roll off your back because at the end of the day, it’s all just business.  Nothing personal.

8. Have a clear vision of what you really want or a clear goal of what you want to accomplish. You can forget the first 7 things I just mentioned, but you need to remember this one. Many entrepreneurs start out not really knowing what they want.  They say they want to have their own business selling this or that and hopefully end up being rich from doing so or at least making ends meet.  That’s not a good enough goal unless you just want to be mediocre at best.  You need to have a goal that’s bigger than what you can comfortably accomplish.  Set higher standards for yourself.  Set it high enough to scare you, but not too high that it paralyzes you.  It is very important to know what you want and why you want it. The most successful people are those who started with a clear vision of what they wanted to accomplish and persisted long enough to carry it through. Don’t worry about how you’re going to accomplish that goal…just have a goal and a strong enough reason for wanting to achieve it.  If your WHY is big enough, the HOW will take care of itself.  As long as your motivation is big enough, the solutions will present itself to get you through the tough times.

9.  You need to have fun. You need to pick your business based on what you like to do.  Because if you approach your business like you’re smelling armpits for a living, your customers will know that and won’t hang around too long, if at all.

So you see, there’s a lot of thought that needs to be put in starting a business.  It’s not just a matter of buying and selling stuff.  Lots of money can be lost by not really having the right focus.   Starting a business, sustaining it and growing it is really simple…but it’s not easy.

Don’t be the Cheapest

In a market that’s saturated with competition, with everything else being equal, the one that offers the lowest price is usually either the newbie or the laziest…or both.  I say this is usually the case because on rare occasions, they can also be the smartest if there’s more to them than just being the cheapest.

Why do many businesses try to offer the lowest this, the lowest that, free this, free that?  Because it’s by far the easiest way to compete.  Price may be one factor that affects a customer’s decision to buy, but it’s not the only thing.  For a lot of businesses, it’s too much work to try to figure out everything else that affects a customer’s purchasing decision, so they just try to compete on price.

I’ve learned never to engage in price wars.  There will always be somebody that will sell things cheaper.  Somebody can always find ways to make the same products we make cheaper.  There is always someone who values their time less, has less overhead, and is willing to give up more for less money.

If your only advantage over the competition is that you cost less, then there’s really not much that sets you apart.  You run the risk of having the most volatile client base–the price shoppers.  If the only reason your customers are shopping with you is because you cost less, they will drop you without batting an eyelash when someone else comes in cheaper.

Focus on offering true value, not just a better deal.  Build something spectacular, something worth talking about, something people need and want, something only YOU can create, something only YOU can provide.  When you’ve captured a market with something that’s uniquely yours, the world will be your oyster.

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