By: India Laughlin
Megan and Matt Vick began their organic and vegan cosmetic company as a simple hobby. This hobby was jump started from their need to find products that worked for their sensitive skin. After extensive research and rave reviews from their friends and family, this power couple went from giving their products as wedding favors to their guests, to packaging their products and selling them across the nation.
Megan the daughter of a dancer and Matt the son of a serial entrepreneur, combined their individual talents and produced a successful and debt-free company known today as Shorganics . They have a few key processes and procedures that they follow to ensure the continued success of Shorganics and they were more than happy to spread the knowledge to up and coming entrepreneurs.
Know your numbers! Matt emphasizes the extreme importance of knowing all of the financial details of your business. He attributes the impressive debt-free status of their company to keeping a watchful eye on their numbers and keeping their eye on the prize. Matt recommends enlisting the expertise of an accountant to assist with the overseeing of the financials of your business. According to Matt, hiring an accountant is a great way to protect yourself and minimize you debt risks which should one of the top priorities for any business. However, Matt cautions entrepreneurs to understand what processes their accountant follows by self-education and simply asking your accountant the right questions.
They also advise startups to utilize free programs, such as Google spreadsheets which allows you track all of your changes as well as access your information from anywhere through either your home computer, tablet, iPad, or smartphone. Matt and Megan also use these free spreadsheets to generate their production schedules instead of buying an expensive production program.
Contract Manufacturing or Self-Manufacturing? What option is best for one business is not necessarily best for another so it’s very important to complete your due diligence before getting starting. If you plan to use a contract manufacturer be sure to understand their entire process from beginning to end and understand the terms of your contract before signing on the dotted line. Megan and Matt researched many contract manufacturers and after making numerous inquiries and speaking with several manufactures they concluded that they could make the products themselves and hold on to a value that is very important to them, which is retaining control of not only the range of products they can offer but also every single ingredient.
Matt and Megan discovered that through using a contract manufacturer they would take on a bigger risk regarding the authenticity of their product. To alleviate this risk they decided to make each and every single product themselves. This is where knowing your customer really comes into play, Megan emphasizes. There are customers who are more concerned about what the product will do for them versus what actually goes into making the product. Our customers are truly in tune to what goes into the products that they use, so it’s vital to our business that every ingredient is true to form and that we disclose every single ingredient on the packaging to meet not only the needs of our customers but also to abide by all FDA regulations.
Have Realistic Expectations! Matt states that you can’t go from hobby to profitable professional overnight. These things just don’t happen but you can grow a sustainable business that meets the needs of your customers and that makes both you and your accountant very happy. This can be accomplished by working smarter not harder. Matt further explains this notion by speaking extensively about understanding your company’s economies of scale.
Having a clear understanding of how much you can and need to produce will have a direct effect on your economies of scale. Be sure to account for your storage space and product growth curves when calculating your economies of scale. Even if it’s more cost efficient for you to produce a large quantity of a product ask yourself if you have the proper storage space and if so, will this product move in a timely manner? If not, you risk taking up storage space that should be used for items that will sell more quickly. Also, if your product has an expiration date you run the risk of your product going to waste before it is able to be sold resulting in a significant profit loss.
Don’t Fall In Love! Megan cautions entrepreneurs against the dangers of falling in love with your products. This is not to say that you are not supposed to love the products that you sell but it is a warning against letting your love for a product or products blind you from making smart and informed decisions about your business. She expounds on this lesson by telling stories about industry trends that many entrepreneurs fall prey to.
An example, is when a packaging wholesaler runs a great special on the hottest and newest packaging. While the packaging my look out of this world and you know that your customer will fall in love just like you did and the price is right, doesn’t mean you should jump on it. Why you ask? What happens when they discontinue this new product because this new great packaging didn’t sell as well as they thought that it should? Now you have promoted the packaging, had your customers fall in love and now you are unable to reorder.
Megan’s advice is to use this lesson with all products and supplies for your business. Choose items that have a strong resell history to avoid wasting money but most importantly to avoid disappointing your customers and possibly losing them. She also adds, if you just have to have that new product list it as a limited-time only and make the necessary adjustments in your financials. If you are able to continually reorder this product than great! However, if the company discontinues the product you are prepared financially and your customers are prepared mentally.
With the wealth of knowledge that this husband and wife duo have, it’s no wonder Shorganics is the successful company that it is today. They have built a sustainable business through continual education of both themselves as well the continual education of their customer base. Proving that you can turn a simple hobby meant for two into a successful and sustainable business meant for the masses.
