I believe that one of the biggest myths about starting a business—particularly a product-based one—is that you need a lot of capital to get going. While that may be true for certain industries or those who want to open with a full store of inventory, it is often possible to launch with very little.
At least, that’s how it worked out for me. When I started building Witch’s Way Craft, I had a vision for the shop it is today, with a vast inventory of candles, crystals, and all manner of magickal goods. But, with only about $500 of savings that I could afford to spend, there’s no way I could stock all of that from the get go.
Instead, I started small, letting the shop grow as my budget allowed—which happened faster than I could have ever dreamed of. A year or so after listing my first ten candles on Etsy, I was making about $1,000 a week in revenue, so I felt ready to quit my job to see what would happen if I gave it my all. Less than a year after that, I was making enough to hire my husband full-time. Less than two years later, with both of us working diligently on the business, we hit $1 million in total revenue and have continued growing ever since.
For anyone else who has big business-owning dreams on a small budget, I’m here to share some of the strategies that helped me make it happen.
I Reinvested Most of Our Profit Straight Back Into the Business
I spent 100 percent of that initial $500 on supplies to make my first candles. Once I made and sold them, I made back that initial investment, plus $500 in profit. Then I had $1,000 to invest in new inventory and business growth. As I sold more and my revenue increased, I started buying cooler vintage glass candle vessels and shopping at trade shows to add crystals to my inventory, giving customers a reason to come back and buy something new. Over time, by reinvesting the money made from sales, the store has grown from ten items to over 1,000 in stock, and we now have thousands of dollars to reinvest in building out our first brick-and-mortar store.
As a business without a lot of initial capital, I had to get used to these waves of growing, waiting for that growth to pay off, and then having the money to grow some more. It was frustrating at times to not be able to do everything I envisioned from the start, but I’m glad I didn’t let that stop me from slowly building toward it.
What about paying myself along the way? I’ve never officially given myself a salary (since the business is a sole-proprietorship, technically all of the money passes through to my personal finances), and instead my husband and I pull money out as we need it for bills and such. It’s not the most glamorous lifestyle, but it does allow us to put as much into growing the business as possible. And it’s not like we’re living in squalor: For instance, last year we were able to buy our first house. We saw it as both a personal investment and a business investment that would allow us to store more inventory without needing to rent warehouse space.
I Used Relationships to Grow My Customer Base
Throughout this growth, I’ve spent very little money on marketing, instead relying on word of mouth and relationship-building to grow our customer base.
The one big exception to this, and something that really jump-started our following, was paying for table space at local maker’s markets, craft fairs, and flea markets. The first time, I spent $40 to share a table with another vendor and made something like $300, which felt huge at the time. As I started doing more markets, I’d make $500-600 on a bad day and over $1000 on a good one.
The sales were great, but even better was to see the effect that direct customer connection could have on my business growth. People really responded to hearing me talk about my candles, the care that went into choosing the materials and making them, and what each one means to me or how it can be used. Even if they didn’t buy right away, I’d notice more local web orders come in during the days following fairs or a jump in followers on our Instagram.
I also developed relationships with other small business owners at the markets, many of whom were willing to help each other succeed. We started doing “shop shares,” where we would all share products from another person’s business in our Instagram stories or on the feed. These weren’t giveaways and we didn’t charge each other for them—they were simply in-kind sharing, and we tried to make them feel really organic instead of promotional. It always led to a nice bump in followers and reminded me of the power of seeing other businesses as community instead of competition.
I Got Creative With How I Connected With Customers
Our next big jump in growth came when I started doing live sales on Instagram. (If you’re not familiar, it’s basically like watching QVC on your phone.) I had noticed some other makers doing these, and it seemed like a craft fair but without the cost and need to transport products, and with a larger reach. At that point I had about 10-15K followers, and made $2,500 in three hours in our first sale. I was blown away, and I had fun doing it. It was just me blabbing for a few hours: Showing off the products we had for sale, talking about how I might use them in rituals, answering questions, and just showing off my personality.
I started doing these once every week or two, and they became a staple of our customers’ schedules. People would come and just have a good time, invite their friends to join and hear my antics. During the pandemic it became a sort of social hour for everyone that allowed people to not only connect with the product, but for us all to connect with each other. Later, when I would see orders come in, I would recognize the name and be able to follow up about something personal they mentioned during the live.
Common business advice often says not to let your business be personal, but it was by getting personal through these live sales that I was able to grow our business to new heights. We still do live sales regularly and, with over 75K followers today, they are a meaningful part of our sales and marketing strategy. (All with no cost to us except our time and making sure we have plenty of product in stock.)
To be clear, we are not millionaires. We are still growing, and much of the money we make is still going straight back into the business, meaning we have to be scrappy to this day. We’ve bribed friends with wine and Netflix to come over and help us pack boxes or asked grocery stores for their old promotional flyers to use for packaging. It was clear to me early on that nobody was going to do the hard work for me unless I could afford to pay them, so I had to do it myself to build my business on a budget.
And, as impressive as this success story may seem, I do think we could have grown faster. I was afraid of pricing things as high as I could have (as high as my competitors were), because I didn’t want to seem greedy, but ultimately that hurt our margins and held us back.
But it was never just about money for me. I went in wanting to make enough to support myself and my husband, and to do it without hating my job. Now, I get to make and sell products I love, surrounded by customers I love, and with the person I love. And that’s something I can’t wait to keep building.
By: Lily Amberg
Title: How I Turned a $500 Investment Into a $1 Million Online Shop in 18 Months
Sourced From: buffer.com/resources/i-turned-a-500-investment-into-a-1-million-online-shop/
Published Date: Mon, 12 Sep 2022 11:00:05 GMT
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