Small Business Blog

Main

Small Business Failure – Plan Ahead Archives

October 30, 2006

From Prints to Posts: The Birth of a Design Blog

When I used to think about small business owners I certainly didn't think of someone like myself. I spent most of my college years listening to bad jam bands and working in a printmaking studio trying to figure out how I'd make a living off of the semi-awful artwork I was producing. Three years later I found myself in Brooklyn running a website that somehow sprouted an e-commerce shop this year. I hardly made a business plan and certainly didn't think about how I should brand my company, but here I am, running a small (but successful) business from my apartment in Park Slope.

Working next to my cats on the couch one day I caught myself thinking of how I could expand my website (where I write about product and interior design) and it hit me- I was one of those people. Those people who ran their own companies, considered their business' future and thought about how best to please the consumer (in my case, my readers) and myself. As much as that thought used to send chills down my spine, it suddenly made sense. I was 24 and doing something I actually liked every day and finding a way to make a living at it. I figured maybe this whole small business thing wasn't actually such a bad idea.

Since I've learned to embrace the site (and myself in a sense) I've become more confident with my writing, the site's content and style and the way in which I run my small business. Design*Sponge may have started as a way to give my boyfriend a break from incessant design commentary, but it's become something that I am thoroughly proud of and thrilled to run every day.

Over the course of my posts here I'll be talking about what it's been like to be a young woman running a web-based business. Stay tuned for tales of scandal, intrigue, blogger back-stabbing and some of the most archaic ad sales managers in the history of the internet. Along the way I hope to help those starting a small business avoid some of the perils and pitfalls of going it on your own.

Southwest Windpower – Our story

I just completed meetings with two Arizona state congressmen to discuss federal legislation that would encourage the use of residential wind energy systems in homes across the US. I’m now on my way to St. Louis where I’ll meet US Energy Secretary Bodman, several undersecretaries and perhaps, though briefly, President Bush. My goal is to build support for small-scale wind energy legislation.

My goodness. We’ve come a long way from our beginning in late 1986. My business partner, David Calley, and I started Southwest Windpower in a garage some 40 miles outside of Flagstaff, Arizona (seems like many good ideas start this way). This place was so remote. It had no electricity, no phone. We made our first wind generators to charge batteries, to run our equipment, so we cold build more wind generators.

Today, Southwest Windpower is the world’s leading producer of small (400-3000 watt) wind generators. During our 20 years in business, we have produced over 100,000 small-scale wind machines, today found in over 120 countries. Our wind generators are primarily used in remote (off the power grid) areas of the world to make electricity for water pumping, homes, telecommunication transmitters, off-shore plat forms or even sailboats. Our dream began with a simple idea, “change the world through the use of low-cost small wind systems.” After realizing the world is really quite big, we’re still out to change it, just one step at a time. When we started, David and I had no money to speak of. We didn’t even have higher-level education. Success came through none other than hard work. We also endured low pay for the first 10 years of our company’s existence.

Fast forward to today. This month we will introduce our newest product, called Skystream. This is the world’s first fully-integrated small wind generator designed for the grid-connected home (www.skystreamenergy.com). This product embodies our dream, “to change the world,” that started 20 years ago.

If I used this blog to share every experience I’ve had since founding Southwest Windpower, it would easily become a novel. Looking back over the company’s history, I see some key things that have been critical to success:

o Eternal Optimism – No matter how difficult have become, we’ve always looked ahead and believed in success.
o Lasting Hunger – Some say “penny wise, pound foolish.” In reality, every investment, from a desk to a computer, must be considered carefully. We’ve been known to visit buy desks at auctions for $10!
o Global Aspirations – Our first sale ever was in Michigan, our second sale ever was in England. We have distributors in 88 countries and half our business is in exports. We’ve never been afraid to think globally.
o Strong Financials – This might cost a bit more in the beginning, but when you need that loan or are ready to talk to venture capitalists, you want your papers in order. Take the time to do so from the beginning, no matter how painful. Stay organized.

Today we have 85 employees, a sales office in Australia and a new warehouse in Germany. Although twenty years has taught me a lot about making small business work, I still can’t say “I’ve seen it all.” Each day brings new challenges.

My next blog will likely be about money. Money is the grease that makes everything happen.

Thanks for your time. I welcome comments from you, the reader.

November 6, 2006

Being a Girl in Business

One of the few issues I didn't anticipate when I started my website was having to deal with people who didn't trust me because I was a young woman. I could understand the young bit (It’s completely fair to ask about someone’s level of experience), but the woman part? Didn’t see that one coming. I don't intend to launch into a speech about men vs. women, but in the early stages of building my website I encountered a type of gender-based ignorance that I honestly thought went out of style years ago. After talking to other young women who own businesses I found that this was an issue for many of us so I thought it would be good to share some of my insight (however limited) into how best to deal with the situation. (For those of you who don’t own a business and aren’t a woman, you might still get a kick out of some of the stories)

Part One:

After my site was mentioned in a major newspaper I started hearing from larger companies looking to advertise on the site. I had previously only dealt with smaller companies so adjusting to a new way of business was a bit of a change for me. Along with ad requests came public relations agencies and agents looking to chat with me about possible projects. The excitement of it all was dampened by the fact that people seemed appalled that they were actually speaking with me directly. Despite the fact that press clips made it clear I was running the site, people seemed shocked that they couldn’t go past me and talk to an ad sales manager, a rep or an agent. Here’s a sampling of some of the fun things I’ve heard over the past two years:

“You’ve got to be kidding if you want me to believe that a 23 year old girl runs this site.”

“Are you sure you know how to run the finance end of this? Don’t you have an ad guy I could talk to? It’s ok if you don’t know numbers, you could just stick to design…I can suggest a great guy to help you with the hard part.”

“Come on, who really runs the site? It’s fun to have a cute girl on the cover but I’m sure you’ve got some ad guys I can talk to, right?”

“It can be really tough to represent yourself, you know. Trying to represent yourself as a young girl..I mean woman…I mean, people might not take you too seriously.”

I heard most of these comments (and many more) over the phone and what struck me was the way that they seemed to really think it was funny that I thought I could run things on my own. But instead of focusing on the muck I thought I’d try to share how I’ve dealt with these situations. Thankfully as the site as come into its own people seem to take me a bit more seriously but here are some tips I’ve gleaned from my own experience and others running their own businesses:

1. Never play into the negativity: it’s a no-brainer but if you don’t take the bait you can’t get reeled into an argument. Try to ignore comments like the ones above and stay on course. You can always vent to your friends later.

2. Be ready with the facts (and stick to them): Numbers speak for themselves so whether you’re dealing with advertising, product sales or agents have your business’ stats on hand. I’ve found the best way to deal with a pushy or rude client or business person is to direct them to your stats page (or a well-made one sheet) for more information.

3. Have a support group: the numbers of young women running their own businesses continues to grow and with the advent of the internet, blogs and online forums for business owners it’s easier than ever to find someone to talk to. I attend a bi-monthly business women’s meeting where I can check in with other young women running design-based businesses. Find someone who does what you do and you’ll always have someone to bounce ideas off of and check in with when something goes wrong.

4. Don’t be afraid to stay small: I know people who’ve created fake ad sales managers and fake press agents to look more impressive to clients. In the end they always get caught so don’t be afraid to admit that you’re running a small (or even one-person) business. The proof is in the pudding and if you’re successful people will come around.

November 8, 2006

It’s all about the Money: Financing Your Dreams

We closed on our “Series B” financing in April of this year. Thinking back, I can’t believe how fast and smooth it all went. It was exciting to see groups actually competing for the chance to invest in our company. We had sure come a long way from the days of going “door to door,” looking for investors with the slightest interest in our dream.

For any small and growing business, cash, grease, bucks (any of the 40+ other words Wikipedia has for money) is KING! Good cash flow and cash management are extremely important to business of any size.

Southwest Windpower is 20 years old. The growth of our company has been no different than many others before it, and many others to come. We grew the business as much as we could, up until the point when growing any larger meant bringing in outside money. In the early days, we turned to our friends and families to help us along. That initial small investment brought us more sales and good bank relations. We grew fast during the ‘90s and even bought our largest competitor. Everything changed with the economic downturn in 2001. The old saying that “banks only want to lend you money when you don’t need it” is absolutely true! The moment we went into the negative, our bank sent the “boys” to see us. We made good on our debts, but that bank still owes me my hair.

When our company embarked on a new small wind technology – the Skystream -- that required millions in investment, we assessed our options. We could either grow the business internally with available cash and good bank relations or we could invite investors to come take a chance on us. Although, for some, the VC world can be both friend and foe, we were fortunate to end up with absolutely terrific people. The first round was not easy -- “series A” took two years and countless interviews. The second round went much faster, series B took three months and we were almost fighting interested VCs off!

A word about VCs, they generally invest in what they know the best. Some focus their resources on specific regions of the country. First and foremost, VCs assess a company’s management. Only then do they look at the product and the market potential. Also, VCs see as many as 50 business plans a day. To capture a VC’s attention, It is important to keep your plan short (25-30 pages max) and easy to read (comb binders and tabs). Make it professional! The hardest part is getting out of the stack and into the “keep” pile.

Today, with the world so connected, investors can be found everywhere. A good friend of mine works for a solar company in New Jersey that is backed by an investor in Hong Kong.

Raising money is no easy task. It is both challenging and time-consuming. But when funding is accomplished and put to good use, nothing is more rewarding that watching your dreams take flight!

November 9, 2006

Day in the Life of a Blogger

Every small business owner has their own schedule and way of doing things so I thought it might be fun to document what it’s like to be a small business owner and blogger on a day-to-day basis. It’s not all pajamas and tv time….

7:00 AM: Wake up and feed hungry cats stepping on head
7:10 AM: Drag the laptop into bed and start to go through last night’s emails (usually around 100 overnight emails, which will be divided into immediate response, comments to review and publish, requests for design help and submissions)
7:45 AM: While still going through emails say hello to waking boyfriend
8:00 AM: Prepare photos for first post of the day (while still answering email requests and sorting through submissions)
8:30 AM: Load first post and take a quick break to get dressed and run out for coffee. Say goodbye to said boyfriend on his way to work.
9:00 AM: First post of the day is published
9:05 AM: Research and prepare products for my weekly column in the Philadelphia Inquirer
10:00 AM: Deal with fresh emails that start to come in around 10 AM (I’ll receive around 300 each day)
10:00 AM: Publish 2nd post of the day
10:10 AM: Receive response from my Philly editor so I can begin calling around to gather high res images and write text for Friday’s column
11:10 AM: Publish 3rd post of the day
11:15 AM: Prepare and publish my daily post for House and Garden.com
12:00 PM: Publish 4th post of the day and chat with H&G editors about development of the new website
12:15 PM: Work on wireframing and content for H&G website
12:45 PM: Check in with D*S Shop- verify orders, contact customers, update quantities and forward order information to shop artists.
1:00 PM: Publish 5th post of the day
1:30 PM: Lunch and research break (scrounge up afternoon sustenance while searching for new products and designers to feature)
2:30 PM: Publish last post of the day while watching Tivo’ed episode of Everybody Hates Chris or Ugly Betty.
2:45 PM: Compile results for Letterpress Guide. This involves going through hundreds of saved emails and narrowing results. After which I email the selected companies to get detailed information on their services and prices.
3:30 PM: Work on guest blog: check in with current guest blogger, prepare for the following blogger (discuss theme, features and goals) and touch base with upcoming writers to plan the site’s schedule for the next two months.
3:45 PM: Research break (touch base with shop owners and PR contacts to get leads on new or soon to be released products)
4:00 PM: Compile text and photographs to be mailed to Philly Inquirer- finalize column for next week and brainstorm ideas for coming weeks.
4:15 PM: Sort through and organize photographs and text for the D*S Int'l Design Project (anywhere from 1-2 hours)
4:30 PM: Work on additional freelance assignments
5:00 PM: Drag myself to gym and get some fresh air
6:15 PM: Check in on D*S Shop (tally, contact designers, etc).
6:30 PM: Answer all request emails (people looking for products, help with interior design, etc.) Takes anywhere from 1-2 hours.
7:00 PM: Laptop takes a break and I play with the cats and say hello to boyfriend who's back from work.
7:30 PM: Start to gather ideas for Holiday Gift guide (research, text, etc.)
8:00 PM: Answer personal emails and then eat dinner.
9:30 PM: While boyfriend watches football prepare posts for tomorrow (write text and get pictures), prepare weekly newsletter, prep new posts for Slate.com and work on billing and invoicing for advertising program.
10:00 PM: Pass out on couch watching Veronica Mars with boyfriend and cats.


November 13, 2006

Making It Happen: How Does One Live Off of a Blog?

The question I get asked most is how on earth I live off of a blog. The answer is: I don't. Well, not entirely. There are few design bloggers I know who live entirely off of their blogs. Most people have the support of a significant other's income, freelance revenue or a side job that helps pay the bills. And I'm certainly no different. When it comes to paying my rent and putting food on the table I combine my site's ad revenue with income from freelance jobs. There are certainly exceptions to the rule, but for the most part we all work outside of our blogs in some capacity to make ends meet. Because well, someone has to make sure my cats are fed and spoiled.

Regardless of how many times I explain that I don't live exclusively off of my blog people want to know how to make it work. So I figured I'd share any knowledge I have about eeking a living off a design blog (this may well apply to non-design blogs, too). Let me say first that I do NOT suggest quitting your day job to pursue life as a design blogger (or any type of blogger). When I started I was contacted by an over-eager blogger who quit her job and told me she had decided to do this full-time because she'd seen others doing it. Let me save you some time and money: don't do it. Unless you want to devote half of your waking hours to tracking down major advertisers, it's darn near impossible to live your normal lifestyle on a design blog budget alone (unless you have a very wealthy someone buying your groceries). I'm not saying it can't be done, but most people who don't come from a marketing or advertising background will have a hard time maintaining their current lifestyle on ad revenue alone. Believe me, after taxes the numbers aren't quite as promising.

That said, it's completely feasible to make a generous side income from blogging. If you've created a website with a few thousand readers a day and put the time into creating a fair ad program you can easily pay your groceries or subsidize a few nice trips with your earnings. And if you're really dedicated to advertising you can probably make it so your blog is your main day job and your outside work (done on a regular basis) fills the gap between the poverty line and a comfortable living. Here's how to do it:

1. Establish your blog or website's basic stats: You won't be able to pull in any real ad money (or advertisers) without numbers. Sign yourself up for a free stat counter (I use statcounter.com) and install the code into your template. In a snap you'll have detailed information on your unique viewers, page loads and visitor lengths. Once you have these numbers you can get an idea of how many people are viewing your site on any given day.

2. Create a reader survey: Survey Monkey (www.surveymonkey.com) is a great thing. You can set up an account and create your own custom survey to get to know your audience. Who are they? Where do they live? How often do they buy things from your site or click on ads there? Once you've created a list of questions, ask your readers to participate. If you can swing a gift for one lucky reader you can usually entice a few extra people to fill one out. Be merciful and try to keep them to a few pages in length (and only once or twice a year).

3. Create an advertising one-sheet: Compile your viewer stats over the course of a month so you can provide your advertisers with a one sheet describing your daily unique visitors (repeats are nice but they don't represent your true daily audience), where they come from (stat counters can usually give you a breakdown by city, state and country) and how long they stay on your site (also provided by the standard stat counter). Once you have this you can include a basic description of your site and any press attention it's received. I'd advise staying away from reader testimonials (my advertisers have explained that anyone can find a gushy reader or two) and long-winded descriptions of yourself unless you have some relevant work experience. Combine this with the results of your reader survey and you'll have a pretty good one-sheet, my friend.

4. Set your Prices: Here's the bad news- most of the major design blogs out there aren't charging as much for ads as you think. The biggun's can charge a few thousand a month for one or two key spots but remember, you're going to have to pay taxes on this and these guys are looking at numbers over 20k a day. It's best to be realistic about your traffic and set prices accordingly. Email other similar bloggers to see if they're willing to share their rates. Start with a fair price and you can always increase as demand or traffic grow.

5. Reach out to Potential Advertisers: Here's the hard part. I can't claim any expertise on this section because I've never actually sought out advertisers. But I'd imagine the best way to go about this is to analyze your reader survey and see what people are looking for. Are people looking for affordable clothing? jewelry? tableware? garden tools? Figure out your target advertiser and tell them that you have their audience ready and waiting on your site. But remember, don't be too pushy. Not everyone is hip to web advertising quite yet- introduce yourself, attach your one-sheet and if they're interested, they'll contact you. If you have a site that can sustain advertising in the first place you'll probably hear from a few companies by the time you're ready to go anyway.

6. Maintain your boundaries and keep your advertisers happy: Everyone has different goals for their site's advertising program. Figure out yours and stick to them. It's easy to be enticed into extra posts, shout outs or free mentions by advertisers with big money. If you're cool with this, go for it. I'm personally not into having posts devoted solely to announcing new advertisers, but if your readers don't mind and you're ok with it, make that your plan and let your advertisers know. If advertisers ask for additional stats or features discuss this with them and try to find a happy medium. Chances are, what makes one advertiser happy will make them all happy. It never hurts to give your advertisers more information about your site and its demographic. And don't forget- figure out a plan for compensating unhappy advertisers. If you start late or they're unhappy do you reimburse? Decide what works for you and make it very clear to your advertisers- it will pay off in the end if you have an unhappy person claiming you owe them money or extra time.

My final thought on this subject is a tricky one: whether or not to run your own ad campaign or use a service like Adwords. I personally find it has been worth it to maintain my own program. I certainly don't always enjoy dealing with advertisers who think they have control over my site because they advertise with me, but I think it's been beneficial to both parties to interact on a regular basis and figure out what works for them. I'm able to get to know an advertiser, their products and their way of doing business first- never a bad thing. I'm also able to help advertisers create an ad that works best for my site- talking to these people has been an educational experience for both parties.

This was probably the longest post I've ever written, but I hope this was able to help some of you who are trying to launch an ad program on your site. Best of luck with all of your blossoming blog businesses

November 16, 2006

How to Get Your Work Online: The Do's and Don'ts

I've wanted to write this post on D*S a number of times but it's never felt quite right posting something a little rant-y. But since this site has allowed me to take a different approach with things I thought it might be fitting to address this issue here. I promise that if you run a company or a PR firm these notes will be beneficial.

I get around 200 submission emails a day. Sometimes closer to 300 depending on the season. After a few years of this (as I'm sure other bloggers can understand) I've become something of an expert in the art of spotting good and bad press emails. What makes this even funnier is that I use to do design PR. In my old office being pushy was a bad thing- but apparently some people (even seasoned professionals) didn't get the memo.

Here are some ways not to get your work on a blog:

1. Send us products that have nothing to do with our sites. Please, if you read nothing else from this post, remember that most sites have a focus. You wouldn't send news on motorcycles to Martha Stewart so please keep in mind the focus of the publication you're emailing. (Despite the fact that I've never once mentioned diaper genies I have one PR woman who emails me once a week about her "fabulous designer diaper genies". I don't write about diaper genies, Jan! Please stop writing me!)

2. Send us faux-friendly emails and pretend to be our best-friend. My old boss would have smacked me upside the head if I called someone a knick-name without knowing them. Please don't call me Gracie if you don't know me. Not even my parents call me that. I don't think Susans want to be called Suzies either...unless of course you know them well.

3. Treat us like free listing services. Please don’t tell me that you "want" or "need" to see your work on my blog and then ask for the specific date and time when it will be posted without even getting a response first. This is probably my least favorite type of email to get and I read through at least 50-60 of them a day. Sometimes feel like I’m going to slam my head against the wall if I have to read another email demanding that I “post this on [my] site this week before Friday at 5.”

4. Tell me what I should write. I once got an email from someone with a list of topics saying “You’re going to thank me when you read this email because I’ve gone ahead and done your work for you, you lucky girl.” Somehow the words “thank you” weren’t the first that came to mind.

5. Clog my inbox with huge, unsolicited emails. Please don't jam anyone's inbox with 15 emails full of unsolicited product shots taking up over 25 MG of space. I’m lookin at you, Rodger. Just ask before you send photos, it will save you time as well.

Ok, enough ranting. So, what can someone do to get their work on a website?

1. Send us a polite email with work that applies to our website. I can’t emphasize this point enough. There’s no need for long drawn out emails full of stories and tales of your client’s genius. I nice short email with a product that relates to our site is always the best way to go.

2. Include quality product photography. I can’t stress enough how much good product photography makes a difference. If you take the time to invest in great photos you will more than likely see great results. It’s an easy choice when deciding between dark, fuzzy product shots and a clean bright picture of something.

3. Provide relevant links or e-commerce retailers. When it comes to working with blogs it almost always helps to have a website we can reference. A lot of stores get upset with me for insisting on an e-commerce site but it benefits more readers if your goods are available online for everyone to buy. Half of my audience is outside of NYC so the last thing I want to do is list something that’s only available in Manhattan.

3. Feel free to follow up. A short email to check in and see if we’re using your submission is always welcome. But please don't give us a lecture on how we're "missing out" or "making a big mistake" or are "just plain dumb" for not writing about you. No one likes to be called dumb, I promise. And at the very least it won't make us want to write about you in the future.

4. Stay in touch. Some of my best relationships with people in the industry come as the result of regular “touch base” emails. If I know I can rely on someone to send products and designers that will be of interest I’ll be more likely to check in with them when I need something.

Hopefully these tips can be of use to those on either side of a press/blog relationship.

November 21, 2006

Going Global

No too long ago, I came across the statistic that less than 10% of Americans have passports. Later that week, while eating dinner at a restaurant with “map-of-the-world” vinyl placemats, I asked my dinner partner (who will remain nameless) to find the UK on the map. She pointed to northeastern Canada!

Although international business may be intimidating at first, I’ve learned the global market is not the planet Mars and requires no special spacecraft to access. According to the US Dept. of Commerce, more than half of American businesses export their products.

Just like any new skill, learning to export takes a bit of time and persistence. Once you’ve started, however, it’s actually quite simple. Although Southwest Windpower is a small company, we have distributors in 88 countries and products in over 125. We learned early on that the world is indeed “flat,” as Tom Friedman puts forth in his recent book. We came to realize countries like Germany, Brazil and Sri Lanka are certainly not on other planets. We came to see how selling to the Netherlands can be as easy as selling to Nebraska.

So how should you, the small business owner, get started? First off, make sure you have a market for your product. A good way to test the market is to place an ad in a few international publications that pertain to your industry. One great starting point is Commercial News USA, the official US Dept. of Commerce magazine for American-made products and services. The US government does a great job helping domestic businesses expand. The government has some great people willing to help however they can. Some services are free and some cost a small amount. Either way, they are a quite helpful.

Here are a few more tips for getting started…

Finding distributors:

Advertising, tradeshows, word-of-mouth and your website are great ways to find distributors. Another great way is the US Dept. of Commerce. You’ll want to find the Dept. of Commerce office in your state. These offices have contacts around the world and can introduce you to the right distributors.

Placing orders:

Your customers will place orders the same way domestics order are placed. The only difference is that you will be required to produce some additional documentation. Generally, your customers will ask for quotes that include shipping. UPS, Fed-Ex or any freight consolidator can help with these details. UPS and Fed-Ex have a lot of support materials to help you with all your export papers.

Collecting payment:

Unfortunately, most of your legal rights to collect on debt stop at the US border. As a small business, the safest way to do business is pre-paid. Of course, your customer has to trust you with his/her money and trust that you will ship the product. Letters of credit are a good way to use a third party (a bank) to ensure both parties are honest. However, letters of credit cost money. They are generally not worth the extra cost if your order is under $10,000. Another way is… yes, the government. Namely, the Export-Import Bank of the United States (Ex-Im Bank). The Ex-Im Bank will actually insure your receivables. In other words, if you export a product on an open account but don’t get paid, the Ex-Im Bank will pay you. There is a fair amount of paperwork to do to get started. But once this is done, the process is very easy.

Shipping:

You can rely on the freight companies in the beginning. UPS and Fed-EX have spent heavily on programs to help make it easy to ship overseas. If you have not shipped internationally before, you might consider starting with the EU and expanding from there. Just call or go online and download all the details.


Tom Friedman’s The World is Flat describes the extent to which our world is connected. There is no question this is true. Take the time, do the research and dive in. You will expand your business in ways you never new possible and at the same time learn about the world!

November 28, 2006

Getting Your Work Out There

I recently asked my readers what they would like to see addressed on this blog and the overwhelming response was "How do we get our work in shops?" One of the hardest things about getting a fledgling design business out there is trying to make your goods available to the public in some capacity. So this post will be devoted to small business owners who are trying to get their products out of their homes and onto store shelves. (My next post will be about starting your own shop along with some tips and things to avoid that I learned when I started mine).

I emailed several small business owners running online and brick and mortar shops and asked them what was the best way that people could get their goods into their (or any) shop. The responses were extremely helpful and I thought it might be nice to post the results in full. In addition there is a wonderful two part article right here and here on getting your handmade goods into small shops. (It was originally posted on Erin's Sodafine blog in October).

The overwhelming theme of the responses was: make sure your goods are targeted to the retailer you're contacting. People didn't seem to like this idea when I suggested it last week (for shame, D*S!) but shop owners overwhelmingly asked that artists please make sure their designs are a good fit for the shop they're contacting. It saves everyone time and when you're running a small business saving time and materials is a good thing.

[From Rena Tom, owner of Rare Device]:

"Number one for me: have a website with images. This is a must have. Show the product in a basic full-size shot, a closeup and maybe near or on the body, for scale, if applicable. If you have a catalog instead make sure it is a good looking and nicely packaged. It will really help. Basically these days, emailed images/websites are as good as physical kits in the mail (at least for me) I get so many of these things that I know immediately if I'm going to pursue it or not, so follow up is not as important.

Number two: Timing - if something is for a holiday or season, send it as early as possible.

Number three: Prices - send prices! Indicate if you'll do wholesale or consignment.
Terms, minimums, delivery dates. The more info the better.

Number four: Don't just drop by the shop! If you are scouting that is one thing but
hauling a giant suitcase of product in the store, on a weekend, unannounced, is quite another. If you are in the shop, leave a postcard and say hi but don't insist they look at any samples.

Number five: Indicate any selling points succinctly when talking about your product.

Number six: Show a coherent line of only your best stuff. This one is pretty
important. Show original product and make sure it is a rock-solid product.

Number seven: Do your research! Make sure your product will fit in. But, make sure it's not too similar to something already in the store.

[From Mark Eidsness, Owner of Sparkability]

"Finding Retailers: If/when you have the budget it is much easier to find retailers. Exhibiting at trade shows, advertising in trade publications and purchasing mailing lists are the obvious ways. You can accomplish all the same things on the cheap however, and the independent retailers are doing exactly the same thing to try and find new vendors.

1. Google - Search for anything and everything you can think of that might pull up a retailer interested in your widget. You can also create Google Alerts http://www.google.com/alerts to do some of the heavy lifting for you.

2. Trade Show Web Sites - Some shows, not all, publish info on attendees after their show closes. This is a great way to get company names as well as the right contacts for purchasing (if you're really lucky). Almost all shows will give you list of exhibitors (your competition) however, and you can go to their web sites to find retailers (see #4)

3. BLOGs - Find the BLOGs covering your world, and read them several times a day, every day. The retailers you want are reading these BLOGs too. BLOGs disseminate information WAY more quickly than any other media (try instantly) and keeping on top of the big players in your world will really help you stay in the know.

4. Manufacturer/Distributor/Product Rep. Web Sites. Follow those links...most of these sites will list their retailers.

5. Industry Publications & Their Web Sites. Same as above; follow those links!

6. Software Web Sites - There are only so many companies out there making software for retailers/catalogers/etailers (Dydacomp, Ecometry, etc.). Find their web sites and start following links...your get to their clients.

Contacting Retailers: Make sure you are using your limited resources wisely by carefully screening potential retailers before contacting them. Poorly matched retailers aren't going to want to hear from you. Good retailer matches may not buy, but they will probably at least file your information for the future and they may also point you in the direction of other/better matches for you.

1. Targeted Contacts - Do not contact somebody unless you are sure they may want your product. I get so many unsolicited emails from people who clearly haven't bothered to look through my site as their product is totally wrong for us. So I delete their emails and they waste time trying to contact me again and again. If you are contacting people when you should know better, it is SPAM, and they will hate you.

2. Targeted Contacts. Really.

3. Targeted Contacts. Really-really.

4. Email, don't call.

6. Keep a contact database. Who you contacted, when you contacted them, what happened, etc.

7. Drop-Shipping. Many manufacturers do a huge portion of their business through drop-shipping. The internet is really responsible for this, but what products make sense for drop-shipping? Some smaller retailers will want you to drop-ship everything, but most will only want you drop-ship heavy/bulky items that are expensive to ship. If shipping your product twice (from you to the retailer and then from the retailer to the customer) is expensive enough to impact pricing then you know you should be offering drop-shipping. If you offer customization of any kind you should also drop-ship. If your products are really expensive and/or have lots of color/style choices you may also want to offer drop-shipping as retailers may not be able to afford to bring your entire line in. If you are going to drop-ship, find a good fulfillment company to handle your warehousing and shipping. Most of the costs are transactional (per-order), and you will be able to focus on doing what you started your business to do. Multichannel Merchant ( http://multichannelmerchant.com/) is one good resource for finding a fulfillment company. Asking your shipping reps. (USPS, UPS, FedEx, etc.) is another; they'll know of any good operations in your area.

[From Susan Schwake-Larochelle, Owner of Artstream Studios]

"How to get your work into our (or any) gallery? First take a look at what we have in our gallery either in person or online. We have a shop and archives of our past exhibitions at our web site. Take some time looking through to get a sense of our themes of exhibition. Is your work a good fit with other work we have shown? Quality images are key, organized presentation is important, showing us current available work is a must. High resolutions via email bog everyone down, so snail mail us a CD if you have huge images. We work hard for the artists we represent, so we expect fairness in return. Keep your pricing the same everywhere and don't work against yourself."

[From Ryan Deussing, owner of Elsewares.com]

"In the early days, I found designers by asking girls on the train who made their necklace, by scouring the internet for all things weird and affordable, and even by paying attention to the (usually hokey) newspaper clippings my parents send me from South Carolina. All of this remains true today. A big difference between then and now, though, is designer submissions. We get contacted by a lot of designers these days, and a lot of good ones. But just like answering the phone and running a business are not the same thing, watching the inbox fill up with submissions doesn't keep elsewares.com stocked with fresh design-y goodness. Things just don't work that way. We love it when designers contact us and we encourage it. But, surprisingly, most new designers and products still find their way into our collection only after they somehow cross our radar and we track them down. How does something get on our radar? Sometimes it's a trade show, sometimes it's dinner party conversation, sometimes it's someone my mom meets at a farmers market (true story), and sometimes it's a friend-of-a-friend-who-makes-t-shirts-and-has-a-blog. Really, it comes down to people doing what comes naturally: talking to each other about what they like. And the best advice I can give any designer trying to build a business is to make sure your work is seen by as many people as possible. Interesting people with interesting friends are going to talk to each other - it's your job to make sure you and your work makes it into the conversation. So don't be reticent, don't play it cool, don't fear someone stealing your idea, and don't wait until everything you're currently working on is complete. Have a web site, even if it's just a few photos, and keep it up to date. Blog and/or be on myspace, flickr, and de.licio.us. Leave comments on the blogs you read, and link to yourself. Go out and meet a lot of people, and make sure everyone you meet knows something about what you do. Have a business card with your url on it and make a habit of giving it to people you come into contact with (and not just the people you think you want to hear from). If you live in an apartment building, tape it to your mailbox. Really. And use an email signature that links to your site, so every person you email has a tiny chance to check out your kick-ass design work - including the people you talk to on craigslist about furniture, tickets, apartments or whatever. Of course all this comes after following your passion and designing things you feel good about. But if a designer follows some of this advice, their chances of crossing our radar - and by extension that of Design*Sponge, Daily Candy, TIME magazine, and Oprah - go way, way up"

December 5, 2006

Shop Girl

headerblue2

One of the fun things about working online is the ease with which you can add and subtract content. At the drop of a hat I can cut a feature that isn't working ("d*s snaps") and add one that does ("mini-trends"). The internet's ability to change quickly also works to the advantage of someone as antsy as myself. I tend to get bored with websites (especially my own) faster than I'd like so I appreciate being able to get a new venture up and running relatively quickly. One of those ventures was the D*S Shop. Running the shop has been one of the most challenging things I've done yet, but thankfully I've found some great online resources (and people) to help me get my footing along the way. Since so many readers are running small businesses and considering starting their own shops I thought it might be helpful to share some tips and talk about the day-to-day reality of running an online shop.

[One quick note before we get started: the D*S shop is a non-profit shop in the sense that I've opted not to take any of the proceeds from the shop's sales. I chose to give the designers 100% of their proceeds and sell advertising on the shop to cover the cost of taxes and fees. That said, I still deal with all the day-to-day details like orders, credit cards, inventory, shipping, customer service and finances like any other shop.]

My shop was inspired by stores like Tiny Showcase, Etsy, Sodafine, Rare Device and Relish. Seeing relatively young people (especially young women) running their own shops and managing to stay above water was something that kept me going when I decided to take the leap. Tiny Showcase was the main influence behind the format of the shop: independent designers, affordable prices, limited editions and giving back. I knew it would be important to me to give back in some way (which is why I donate a percentage of the shop's ad revenue to a different charity every month) and let the designers keep as much of their money as possible. So I sat down and asked myself the following questions:

1. Why am I doing this and will this serve some purpose for my readers and the community at large?
2. How will I cover the costs without taking money from the designers?
3. How much time will this take and how will I manage responsibilities on my own?

I didn't know the answers right away so the first thing I did was talk to people around me. I called up friends and readers who ran shops and asked them what they wish someone had told them before they started a shop. The answers I heard most were:

1. Make sure you have enough money to cover starting costs. It's expensive to invest in the initial design, photography, materials, shipping, etc.
2. Make sure you speak with a financial advisor about taxes and regulations. California and NY especially.
3. When in doubt, have customers sign or agree to a policy that protects you from unfair lawsuits or charges.
4. Know when to ask for help.

I took all of this into account and in the meantime emailed designers I'd met through my site to see if they'd like to be a part of the shop. Once I had about 40 designers lined up (with 6 designers showing a month), I knew it was time to get the ball rolling. It was at this point that I remembered number four above: know when to ask for help.

Up until now I'd done most everything concerning my site entirely on my own. No interns. No employees. A control freak by nature, the idea of giving someone access to my passwords, content, etc. was terrifying. But part of running something bigger than I'd done before was recognizing I couldn't do it on my own. So I turned to a graphic designer named Kate Klapfish.

I'd worked with Kate before to help with some coding issues so I knew she would be great to work with. Thankfully she understood the plight of the small business owner (being one herself) and agreed to help me out for a percentage of the ad revenue from the shop. So, after a bit of reformulating I created a budget that allowed me to dip into my main site's ad revenue to cover the costs of taxes, fees and Kate's retainer. She worked with me to design the look of the site and incorporate a logo I'd hired artist Alice Stevenson to create. Once the look was finished and the product information loaded, Kate helped me deal with the financial issues by setting up a shopping cart via PayPal (which let me choose to accept PayPal accounts and Credit cards- for a fee, of course) and set up an account with Mal's e-commerce. And then suddenly tip number one came into effect: start up costs.

Once we started the PayPal account and Mal's account the fees just kept coming. 3% here, 5.5% there. It just didn't end (and it still doesn't). Luckily I had my ad revenue from the main site to cover these fees but I highly suggest finding out all the hidden fees including with services like PayPal, Yahoo, Mal's and other shopping cart vendors to make sure you've covered everything before you get started. They add up quickly.

With the shop designed and the cart ready to go I talked to the designers about shipping. My concern was getting products to customers all around the world quickly and for the lowest price possible. Since a number of my designers were in Europe I decided to have them send their entire inventory to me to ship from my apt in Brooklyn. While this ended up saving people up to $17 on intl shipping fees it ended up being one of the most time consuming decisions I'd made. Exhibit A:

290157960_712f40425c

Here is one of the shop's wonderful designers, Matt of Sesame Letterpress mailing coasters from his living room. This is the real life of independent designers and small business owners. Mailing, shipping, label making- it's all done at home and it's most often a mess. I take in at least a few products a month to mail from my home and I'm inevitably covered in labels and mailers for weeks until we're sold out. Here are some tips about mailing:

1. Track everything. It make cost a little bit extra but when someone tries to stiff you for $250 in goods it's helpful to have a receipt saying they received it.

2. Invest in a PayPal account that lets you print labels via the USPS. I can do everything from my computer at home and skip a trip to the post office. I didn't do this the first month and after hand-writing 150 labels and waiting in line for over 2 hours I decided it was worth the investment.

3. If you're mailing prints or photographs it's worth investing in those pricey waterproof mailers from Staples. I used thick (and I mean thick) cardboard mailers to mail Camilla Engman's prints and they managed to still bend (even with "do not bend" stamps) and result in needing to replace customer's prints.

4. Stay in contact with your customers. If you need to mail something late just let them know. If you're running a small business most people will understand if you're running a tad late or if there's been an error. I had some products get stuck at customs and my customers were very understanding about the slight delay once I emailed them individually.

So every month after Kate has kindly built the pages for each customer and updated our cart I track each individual order, direct it to the right designer and make sure orders are being shipped on time. If it's for an intl designer I mail things myself using my PayPal account and mailers I buy at Staples. However, if you're mailing more regularly it probably makes sense to start an account with U-line. Their prices are better and you get discounts for buying in bulk.

If you've got products and shipping down now you're left with inventory and customer service. I track the inventory of every product (we don't have a service that does that automatically) and make sure we're not selling product we don't have. After that I'm the go-to for all comments, complaints or questions with the site. If you can afford to hire someone to deal with this aspect (or wrangle a spouse into it) I highly suggest it. After reading dozens and dozens of emails asking for layaway on a $13 coaster set or if they can get something for free because they read your site you run the danger of losing your polite tone. I find it's best to wait a bit before I respond to emails like this. The last thing you want to do is be rude to a potential customer. But keep in mind that some people will try to get things as cheaply as possible. So if you don't offer layaway on a $13 item (one customer wanted $13 spread out over 3 months) be prepared deal with a customer that may still be upset and rant about it being unfair. It's just part of running a shop.

After you've got things going there are some great online resources that have been invaluable to me. First and foremost is THE SWITCHBOARDS- a site with a forum and helpful articles on running a small, indie business (with an emphasis on women). Every issue I've ever had has been addressed on here and their advice is wonderful. This site has also been extremely helpful with details regarding legal issues and finance. And last but not least- connect with local business owners in your area. Even if you run an online shop it helps to have people near you that you can talk to about issues, concerns or just connect with to test out ideas. I've started a local Business Women night in the NYC area but I suggest checking out Meet Up.com to start your own or see if there's already a small business owner meet up in your area.

I hope some of this has been helpful for those of you running (or thinking about running) your own shop. As always, I'm happy to answer any questions I can via email so please feel free to email with questions or concerns about getting your shop up and running. If I can help I'll do my best to connect you with someone in your area who can.

ABS – Always Be Selling

You might have heard of the ABC’s of sales, “Always Be Closing.” However, it’s not always just about closing the deal, it is also getting your message, your product, your idea, out in the public eye. To win, you must differentiate your product or idea from all the others and create a niche market that makes you truly unique in the public mind.

I sell wind generators. These are not the giant machines that stand 300 feet in the air producing electricity for thousands of homes. My machines are very small by comparison and provide enough energy to power one home – reducing or eliminating your monthly electric bill. Sound exciting? It is. The challenge, however, is creating what we call the “Residential Power Appliance Market.” Currently, this market is almost non-existent. Most people don’t know it’s possible to use solar or small wind systems to power their home. Our second challenge is that we are a small company (less than 100 employees). Our sales and marketing budget is about the size of the office coffee budget for a major corporation. However, you’ll find us in just about every major publication over the last six months and Skystream orders are piling up. How did we do it?

“Always Be Selling” is finding a way to get your name in the public eye through every possible channel. Last week I was in Washington D.C. attending a conference on renewable energy. Tom Friedman, author of The World is Flat, was a presenter. After his speech I was the first in line to speak with him. I gave him a Skystream brochure and suggested how he might mention us in future talks. Later that day I met with a reporter from USA Today, as set up by our public relations firm Porter Novelli. I spent an hour talking about the benefits of small wind as a way to fight ever-increasing utility costs. That evening I met Amory Lovins of the Rocky Mountain Institute, a leading energy think tank. The week went on and on in much the same way. This is how most my weeks play out. I also spent a great deal of time looking for the right people to promote a new tax incentive for renewable energy in 2007.

“Always Be Selling” could easily be a 400-page book. Here I’ll consolidate ABS down to a few points.

1) Know your competition and find a way to differentiate your business. A favorite story of mine is Procter & Gamble’s (P&G) marketing of Cheer laundry detergent back in the 50’s. The marketers for Cheer were looking for a way to differentiate Cheer from the highly successful Tide. They added blue sprinkles to the formula and marketed Cheer’s “Blue-Magic Whitener.” Sales shot through the roof. Cheer succeeded in creating a special niche in the not-all-that-exciting laundry soap industry. A great book about marketing is The 22 Immutable Laws of Marketing by Al Riece and Jack Trout. It’s a must read.

2) Once you’ve defined your message and what makes you unique, get the message out. A good public relations firm is always helpful. But even if you can’t afford one, get out there and do it yourself. Don’t be bashful, get your product in front of all the leaders in your market. Get them to talk about it. Advertising works but news stories offer far more credibility. Draft press releases and send them to everyone you think might be interested. Keep the story fresh and make it newsworthy. Don’t stop at magazines and newspapers. Write to authors and speakers and send them images suggesting your concept could be used in their speeches. They like to keep things fresh too. So if they like what you have, they’ll likely use it.

3) Also, put your product to work. Invest a little in placing your products around the country or planet to demonstrate how they work. And be sure to let the press know you’re coming.

“Always Be Selling” means thinking of the big picture and getting the product out in the world and into the minds of the consumers. We are all bombarded with advertising and have largely become immune to the ads that plaster bathroom stalls or airline seat tables. Your product will be lost if you don’t find a way to make it different and exciting. Remember, have a brochure with you at all times and always be ready to deliver your message. Speak passionately about your product so the person you’re speaking to feels the excitement of the story. If P&G can make Cheer successful with blue sprinkles, you too can differentiate your product!

January 3, 2007

Happy New Year

Happy New Year everyone. The D*S half of the BizBox will come out of holiday hibernation next Monday while I prepare the next pieces and finish some work on the D*S shop and blog. I'll be back next Monday with three new posts and new resources for small business owners.