Here's the thing: Winter is coming

Print by ToffeeCoffeeCake on Etsy
by ToffeeCoffeeCake on Etsy

Every Friday I post a “here’s the thing” blog. “Here’s the thing” is something my mum (and many other wise people) like to say when they’re about to make a good point. Hopefully these posts are also good points.

Do you watch Game of Thrones? Or have you read the books?

I have a love-hate relationship with the TV show. Except it’s more like a mildly-enjoy-it-when-something-less-terrible-happens-HATE relationship. I mostly sit there hiding from the TV.

I mean, it’s violent, desolate and has horrific treatment of women. And everyone else. But it did have Sean Bean being all nice and northern for a bit. And today is Yorkshire Day (woohoo!) so a good time to celebrate my fellow northerners.

 

ANYWAY, I digress.

Game of Thrones has given us something that feels apt – a foreboding and doom-filled adage they’ve coined so well: Winter is coming.

Because when you sell online, winter is always coming. Christmas always looms. And the first of August only really means one thing – you’ve got about a month to get it together.

And I mean that in the nicest, kindest way. Christmas is a huge opportunity for small creative businesses to make the bulk of their annual trade, to get their name out there, and to grow. It’s a time when we all get warm and fuzzy about our family and friends, we want to do something a bit special, and – more and more – we want to find lovely, personal, unique gifts to give.

You have that. You can provide. You can get people through the winter!

But are you prepared? While Christmas can bump your business up a couple of levels, it can also overwhelm and take it out of you. I’ve heard it from loads of small business owners over the years: they don’t want to do another Christmas like that. They really struggled to keep it together. They’re still recovering.

Now is the time to get your survival plan together. You need to fortify your own Wall to keep the white walkers out. (Okay, Game of Thrones analogies end here.)

So here’s the thing:

Start your own Christmas survival handbook. Get a notebook or start an Evernote list or whatever works for you, and start writing down your processes and contingency plans.

Here are a few ideas:

  • Write down how you make, package and post every item, with all the variables. This will help you to clarify your process for yourself, but will also help you train someone else if you need to.
  • Calmly, maybe with tea and cake, list out your worst case scenarios. What will you do? What’s your equivalent of an emergency evacuation plan in case of fire? Step 1: don’t panic. Step 2: update customers, and so on.
  • Research and list some alternative suppliers. When you rely on other people, you never know what might happen. Even if no one makes exactly what you need, you might find yourself offering something slightly different if necessary.

I know I’ll be writing way more about Christmas planning and preparation. And I’m going to run a supportive e-course in the Christmas months – more about that soon.

But right now, today, while we’re in the middle of a glorious summer, it feels like the right time to just nudge towards having a survival plan for Christmas…

Profit: how much is enough?

You know you’re making enough to pay the bills because, well, you’re paying the bills. But do you know whether you’re making a profit on each order? And how much is a good profit margin for a small creative business, anyway?

In this brave new world of online selling, especially for designer makers and small creative businesses, there isn’t much out there about what makes a good profit margin. It’s a bit like the salary question – not many people talk about it.

And just like when talking about salary, a “good” profit margin means different things to different people. Big enormous retailers, for example, look for 40% profit, if not 60-80%. There’s the widely known fact that popcorn is one of the most profitable products ever, with about 97% profit margin – the cost of corn and the heat to pop it being so small.

Anyway, for small creative businesses, I’m going to come out and say it: if you’re not making at least a 25% profit margin on each product, you need to increase your price or decrease your costs. Let me repeat that:

25% is a great minimum profit margin. Aim for that.

So how do you calculate profit?

In simple terms, profit is the total price the customer pays, minus all your raw materials, packaging, postage costs, commission charges, and – where applicable – VAT. I recommend doing this for every single product, so that you’re confident that you’re making a profit on each order.

For a more detailed spreadsheet and approach to calculating your pricing, register for Pricing for Profit (and Sanity!) here.

Other considerations

One of the things I feel really strongly about is adding in the cost of your time to your profit calculations. Even if you’re not paying yourself, and simply take profit as your payment, it’s really important to know whether your products themselves are profitable, with your time factored into the price. Checking this will ensure your profit is true profit, and it’ll help you to decide whether to employ someone – you’ll know how much their time should cost, and whether it’s worth it.

And there are other costs you’ll need to factor in beyond your per product costs, such as rent and bills. I prefer to do this after you’ve calculated the per product profitability – keeps it simple. So make sure you look at how many items you’ve sold this year, how many you’re likely to sell, and times that by your per product profit. Then take off your annual bills, rent and other costs, and see your final profit for the year.

Need more help?

Pricing and profitability are absolutely key to your business success. Check out Pricing For Profit to build skills for life.

Here's the thing: creature comforts

Little things: my favourite coaster, and favourite mug
Little things: my favourite coaster, and favourite mug

Every Friday I post a “here’s the thing” blog. “Here’s the thing” is something my mum (and many other wise people) like to say when they’re about to make a good point. Hopefully these posts are also good points.

There have been lots of big shifts in my life recently: how I work day-to-day, how I get paid, how I manage my time and – not insignificant – where I work.

Working for a big company, even one as lovely as notonthehighstreet.com, is a very different environment to working from home, on your own, every day. There are things I really love about it, like being able to listen to my own music, and having the windows open as much as I like.

There are other things that have been an unexpected challenge. And it’s not just about my desk and chair and temperature.

I’ve discovered that, for most of my adult life, I’ve ignored some of the basic needs of my body while I’ve been working. And I know I’m not alone in this.

It sounds (very, very) silly, but when you’re working in fast-paced environment, sometimes it’s easy to “forget” to go to the loo, because you’re about to head into another meeting or you’re in the middle of a conversation with someone important who never replies to your emails, so you just have to talk to them now.

And you eat the cake and chocolate because it’s there. And you forget to go outside because you need to do five more minutes of work. (Okay, I’m still guilty of that one.)

Now that I’m out of the office environment, and broadly in charge of my own time, I’ve been trying to notice what my body needs, and when it needs it. Like eating when I’m hungry, resting when I’m tired, drinking when I’m thirsty – not exactly complex stuff, but it can be so hard!

One of the things I achieved last week was buying a pair of shoes that actually fit. I’m really not a shoe person – I never wear heals, and I’m pretty fussy about what I like – but it wasn’t until the weather got a bit warmer and I couldn’t bear to wear my worn-out heavy trainers for my daily walk. Last Friday, a new pair of Birkenstocks arrived, and finally – finally – I have something I can wear that doesn’t rub my toes or squeak or leak.

And doesn’t that seem silly? But I know, I just know, that I’m not alone in dismissing the need for new shoes, or a tidy workspace, or a loo trip, or a glass of water, or (god forbid) a lunch break. We can all get caught up in being busy or thinking that we matter less than keeping other people happy.

But that’s just not true.

So here’s the thing:

We’re not robots. We need food, air, light, comfortable clothes and surroundings, and regular loo trips.

Your customers, clients, suppliers, colleagues, staff, friends, and family need you to be looking after yourself. If you’re not giving yourself even your most basic needs, how can you give them the creativity, quality, responsiveness, love that they deserve – that you want to give?

Today, this weekend, next week, listen to what you really need. Refuse to allow yourself to get too thirsty or too hungry. You might need to plan in some time to take proper care for yourself, maybe even setting an alarm on your phone as a reminder. Or you might simply need to do one thing right now.

It doesn’t have to be huge. Take two minutes to listen to what you need. Then go and get it.

I’d love to hear what your creature comforts are, whether they’re things you do every day, or something you just discovered right now – let me know in the comments!

Take care x

PS I found time this week to set up a testimonials page! If you’re interested in what it’s like to work with me, have a read.

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