Skincare – startup

[MarkCP]

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Hi Everyone, my wife and I started a skincare company 5 years ago after many years of making home made products. I’m probably approaching this the wrong way, we kind of just started and now 6 years later I’m searching for information on what we should have done better.
I somehow got myself on a DFAT trade mission back in 2016 and when I got back home we decided to give it a crack. I built manufacturing facilities in our shed on 20 acres and worked out mass production, designs, formulations and hey presto off we went.
We are now stocked in over 1,000 outlets in Australia and export to several other countries. It’s by far the hardest thing I have ever done for such slim returns and high risk.
I have wasted hundreds of thousands on bad marketing, wrong packaging, bad debts and sovereign risk. But we are still here and sales growing year on year.
Best thing this business has given us is the freedom of creating our own products and the worst is the constant restrictions of cashflow. Sometime I think I’m in logistics instead of skincare.
My family all work in the business and one day I hope to build this into a family empire.
Looking forward to hearing all about other peoples challenges as well.
Mark

[Paul – FS Concierge]

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Hi And Welcome to Flying Solo Mark. It is great to have you!

Thank you for joining our community and posting.

What a great story. It’s so hard to do it all yourself and relying on experts that don’t deliver must be heart-breaking.

Have you got it basically all dialled in now or are you still experiencing huge gaps between your vision and your reality?

Cheers
~Paul

[MarkCP]

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“Have you got it basically all dialled in now or are you still experiencing huge gaps between your vision and your reality?”

The great philosopher Mario Andrade once said “If everything appears to be under control, then you’re not going fast enough.”

So far I’m never happy with what we achieve. If we have a modicum of success, perhaps some spare cash or some great sales. Then I quickly find a way to put us back under pressure.

[Justin]

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Great story @markcp.

Sometime I think I’m in logistics instead of skincare

I used to sell fitness equipment and this is exactly how I felt.

The whole business revolved around ordering, warehousing, and freight

Keen to hear more about the

bad marketing

We just launched Thriday! Thriday saves small businesses a huge amount of time and money by automating financial admin. It's like having a bookkeeper, accountant and transaction account all in one.

[Paul – FS Concierge]

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MarkCP wrote:

So far I’m never happy with what we achieve. If we have a modicum of success, perhaps some spare cash or some great sales. Then I quickly find a way to put us back under pressure.

You are out of control. Somebody needs to reign you in haha!

Seriously though, you sound more like a founder, and less of a CEO – you get stuff done frantically. But you get stuff done nonetheless.

It does sound like you can do with using a framework to move forward – at some point, you will probably need to.

Sorry for the pontificating but if anything I’ve said sparks interest let me know and I will go on.

If not, please accept my apologies and move onward and upward!

Cheers
~Paul

[MarkCP]

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Hi Paul,

It’s a balance between accepting criticism and being bone headed. I’m the type that will insist on an audit to improve as opposed to those who refuse audits.

My burning issue right now is how to recoup bad debts from oversea’s companies. We have/had a distributor in the US, the relationship has since gone adrift. They have ~$70K in unpaid invoices.

I don’t have experience in what the best process for chasing bad debts are:

1) Debt collector will charge ~15% of funds collected but how effective they are I’m not sure.
2) Getting lawyers involved may be better but the upfront costs my be too expensive and long.

Anyone have experience chasing money internationally?

Hi Justin,
“Bad marketing” someone once said “50% of your marketing is wasted, but which 50%?” In my case I’d say 80% and I know what part.

We spent ~$180K on online marketing over the last 15 months, the returns started around 1:0.8, got up to 1:3.5 and I finally pulled the plug at 1:0.4 .

Everyone one pointing fingers at each other, the fact is we never had the right messaging in our creative. I left it up to the experts to make decisions thinking they had experience on the subject but in the end I was wrong to do so.

With no marketing at all online we are still making close to the same monthly values by simply emailing out to our customers with news letters and promo’s.

Mark

[Paul – FS Concierge]

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MarkCP wrote:

Anyone have experience chasing money internationally?

I don’t but I have an internet friend who is a lawyer I can ask.

I will come back to you in less than a week if that is not too long.

Cheers
~Paul

[Paul – FS Concierge]

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Justin wrote:

We speak to as many customers or target customers as possible to understand the problems they’re trying to solve.

Thanks for your insight @justin- think I am going to check out your material as it sounds like very solid advice.

Cheers
Paul

[Justin]

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the fact is we never had the right messaging in our creative

This is the absolute key.

We speak to as many customers or target customers as possible to understand the problems they’re trying to solve.

There’s a great book by Ryan Levesque called ‘Ask’ he has a process for coming to understand the biggest challenges your best customers are trying to overcome. Out of this deep dive process, you get all kinds of feedback, verbatim responses and marketing material you can use.

Another great resource I reference often is this post: https://review.firstround.com/finding-language-market-fit-how-to-make-customers-feel-like-youve-read-their-minds

Can’t help with the bad debt though, sorry

We just launched Thriday! Thriday saves small businesses a huge amount of time and money by automating financial admin. It's like having a bookkeeper, accountant and transaction account all in one.

[Paul – FS Concierge]

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@markcp

I have asked my US Lawyer online friend and here is his reply:

“Unfortunately, there is not a “quick and easy” answer.

Where is the distributor located? Collection laws vary slightly from state-to-state, so you have to be careful.

Another factor is the form of entity of the distributor. If they are an LLC (limited liability company), it makes collection efforts much harder.

I don’t know about the % debt collectors take, but my guess would be that it is higher than 15%.

Collection attorneys that work on a contingency (i.e., they only get a % of recovery) generally want 40% or more.

Attorneys who work on an hourly basis usually want a decent amount upfront for a retainer.

All of that said, it could be the type of thing where a letter from an attorney threatening litigation opens up the payment log jam.

If you can get the name of the company and where they are located, I will run a quick search to see if they are still in business. A quick search of the secretary of state records where they are based may show that they haven’t paid taxes, etc., and are out of business.”

Cheers
~Paul

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