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Cutting costs to create working capital


pamperme
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..hey all I need some help in thinking..I need to re-do my biz plan opening inventory so I can create more working capital and still have a stocked store/lotion bar..so I need some help in deciding what I should cut..hubby is no help..he just says 'this is your deal' or 'I don't know'..

I have quite a list of products and I want to have a full store but making less types of products..in your opinion what should I cut out?..store owners you know how hard it is to keep cash flow so I could really use this..I think I am trying to do more than I need to..to actually open the doors.

SBA Guy is talking to a bank president tomorrow..ugh!..nervous wreck right now.:whistle:

I have in stock about 45 scents..20-25 are b&b safe..so for the lotion bar I want to use all of them....BUT for ready made stock I am thinking of using only about 10-15 in these items

Scented Glitter Gelee

Body Butter(not on lotion bar)

Goats milk lotion

Satin & Silk Lotion

Sguar Scrub(not on lotion bar)

Body Glaze(thinking of removing this one)

salt Glow

body wash

body mist

bath & body oil

massage oil (in 3 scents..not on lotion bar)

shampoo

conditioner

salts (self serve in big bowls)

milk bath(not on lotion bar)

Goats milk soap

Shea butter soap

Java scrub(chocolate, vanilla, capp hazelnut..not on LB)

Brown sugar face scrub(no scent..not on LB)

Foot line is not on bar..only in one scent (scrub, soap, butter, fizzy soak, spray)

Kids line is not on bar either ..only in one scent(shampoo, conditioner, lotion, body wash, spray)

and mens line same thing one scent etc etc...going to have aftershave just for the men.

As far as candles go..I was thining of getting rid of my 16oz jars.. I can always add them again later since I got the formulas down..and just start with the jelly jars, filled votives & clamshells...not sure if this is actually a good idea or not..

I saw the post about jars and it seems the 8oz sell best for you all as well...they do for me but not sure if I got from home to shop if it is a good idea to remove them. :undecided

my brain is officially fired..my creativity is down to -15..and well I am ehausted and have not even done anything yet..man stess can really play a tole on you. ..I still have to get my crap together for order those things that make us no money..like tissue and bags..reciepts etc.

I think I have to much stuff on my list ..and I don't know what to cut out. :cry2:

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OK, I'll give it a shot.

Do you make your lotions, shampoo and conditioner from scratch or a base? I don't make these yet but I have seen some recipes and some have specialized ingredients to make them from scratch. Maybe if you concentrated on items that are very similar in ingredients to buy in "big" bulk to save on some costs and then introduce your other products.

Maybe you could also incorporate that into a market plan, by getting peoples names and addresses/emails addys and then let them know you are now introducing new products. To get their addresses maybe raffle off a basket and everytime they purchase something, they fill out an entry form.

Not sure how your store is going to be set up or how much space you have so but this is my try...LOL

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Actually it is a very good idea to unload on us, because many of us have been there Fire.

When I first started I offered:

bath salts

3 kinds of lotions (all premixed - I didn't make my own at the time)

sugar scrub

salt scrub

bathbombs

candles (in 3 different containers)

cp soap

beeswax ornaments

lip balms

lip gloss

aloe whips

... all I can think of right now, but I'm sure there is more! Seemed like every time someone would ask me if I could make such and such I did it for them. I only did have 10 scents back then though - so it wasn't too bad!

I majorly cut my costs down by making everything myself instead of buying it from someone else, I upped my scent list (which now I don't mind I did, because all of my scents do very well), I downsized alot of the products I made (and learned to say NO when someone asked me if I could make such and such *ding ding ding* this is a BIG cost killer!) I also killed all the products that either took too much of my time, costed too much money to make or I just had a hard time selling them to people.

AND I STOPPED BUYING THINGS THAT WERE COOL LOOKING OR I THOUGHT I WOULD USE EVENTUALLY - ANOTHER HUGGGGGEEEEEE COST KILLER!!!

Sounds like what you need to do is develope a base line of products - I know it is hard, believe me! After you develope EXACTLY what you want to offer, you can then cut cost dramatically.

When I decided to only offer:

cp soap

sorbet

frosting

aloe whips

bathbombs

soy tins

lava gloss

I now only have to buy deli paper for my soap, jars in 3 sizes with the same colored lid (which I get in huge bulk and save TONS of $$$), 2 sizes of tins and one kind of roller bottle. *I also do some things here and there with sample sized products, but I always stay within the budget*

Face it, I know you want to make everything - everyone does - but do you really want to waste all that extra money on something you "hope" will sell in your shop as opposed to something that really flies off the shelf? It's like taking from one product to make another one better and that to me is a lose/lose situation.

Looking at your list - do you really need all those scents? Have you taken inventory for at least 6 months to see what is selling and what isn't? Are you holding on to that rosehip jasmine because Jane Doe just LOVES it and can't get it anywhere else? Believe me Jane Doe will find a new scent to like, she'll have to - don't keep things just for one or two customers.

Looking at your list - do you really need bath & body oil, body butter, 2 kinds of lotions & massage oil? Do you have specific customers for each one of those things? Do they all sell well or does just some sell sometimes and others more?

Looking at your list - do you really need all of those scrubs? I love scrubs, I am a scruboholic - don't get me wrong, I am NOT a scrub hater!!! BUT in my personal opinion, one scrub should do the trick unless you are going to specialize in each scrub. By that, I mean are you going to offer coffee scrub, salt scrub, brown sugar scrub in only ONE scent or are you going to offer all of your 20 scents? I would suggest just doing a specialty scrub and you can only get it in ONE scent - you can save a TON of cash right there.

Maybe by not getting rid of everything (I hate to sound so drastic when I say that) - maybe you can specialize like the scrubs and maybe the gelee - make it unscented, but color it different colors or something like that. Most the "crowd" that is buying the glitter gel isn't into the scent as much as they are into the glitter.

If it were me, I would only offer the following (because I've had my own shop for two years in a very touristy area and this is what goes):

Scented Glitter Gelee

Satin & Silk Lotion

Sugar Scrub

body wash

body mist

shampoo

conditioner

salts (self serve in big bowls)

Goats milk soap

Shea butter soap

Java scrub(one special scent only)

Foot line (maybe only for Christmas)

Kids line

Mens line

PS - Where are your bathbombs ;) LOL

Of course you can ask God (I'm all for that as I talk to him daily), but I've found that God helps who helps themselves & Rachel is doing a good job so far! :)

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Actually it is a very good idea to unload on us, because many of us have been there Fire.

When I first started I offered:

bath salts

3 kinds of lotions (all premixed - I didn't make my own at the time)

sugar scrub

salt scrub

bathbombs

candles (in 3 different containers)

cp soap

beeswax ornaments

lip balms

lip gloss

aloe whips

... all I can think of right now, but I'm sure there is more! Seemed like every time someone would ask me if I could make such and such I did it for them. I only did have 10 scents back then though - so it wasn't too bad!

I majorly cut my costs down by making everything myself instead of buying it from someone else, I upped my scent list (which now I don't mind I did, because all of my scents do very well), I downsized alot of the products I made (and learned to say NO when someone asked me if I could make such and such *ding ding ding* this is a BIG cost killer!) I also killed all the products that either took too much of my time, costed too much money to make or I just had a hard time selling them to people.

AND I STOPPED BUYING THINGS THAT WERE COOL LOOKING OR I THOUGHT I WOULD USE EVENTUALLY - ANOTHER HUGGGGGEEEEEE COST KILLER!!!

Sounds like what you need to do is develope a base line of products - I know it is hard, believe me! After you develope EXACTLY what you want to offer, you can then cut cost dramatically.

When I decided to only offer:

cp soap

sorbet

frosting

aloe whips

bathbombs

soy tins

lava gloss

I now only have to buy deli paper for my soap, jars in 3 sizes with the same colored lid (which I get in huge bulk and save TONS of $$$), 2 sizes of tins and one kind of roller bottle. *I also do some things here and there with sample sized products, but I always stay within the budget*

Face it, I know you want to make everything - everyone does - but do you really want to waste all that extra money on something you "hope" will sell in your shop as opposed to something that really flies off the shelf? It's like taking from one product to make another one better and that to me is a lose/lose situation.

Looking at your list - do you really need all those scents? Have you taken inventory for at least 6 months to see what is selling and what isn't? Are you holding on to that rosehip jasmine because Jane Doe just LOVES it and can't get it anywhere else? Believe me Jane Doe will find a new scent to like, she'll have to - don't keep things just for one or two customers.

Looking at your list - do you really need bath & body oil, body butter, 2 kinds of lotions & massage oil? Do you have specific customers for each one of those things? Do they all sell well or does just some sell sometimes and others more?

Looking at your list - do you really need all of those scrubs? I love scrubs, I am a scruboholic - don't get me wrong, I am NOT a scrub hater!!! BUT in my personal opinion, one scrub should do the trick unless you are going to specialize in each scrub. By that, I mean are you going to offer coffee scrub, salt scrub, brown sugar scrub in only ONE scent or are you going to offer all of your 20 scents? I would suggest just doing a specialty scrub and you can only get it in ONE scent - you can save a TON of cash right there.

Maybe by not getting rid of everything (I hate to sound so drastic when I say that) - maybe you can specialize like the scrubs and maybe the gelee - make it unscented, but color it different colors or something like that. Most the "crowd" that is buying the glitter gel isn't into the scent as much as they are into the glitter.

If it were me, I would only offer the following (because I've had my own shop for two years in a very touristy area and this is what goes):

Scented Glitter Gelee

Satin & Silk Lotion

Sugar Scrub

body wash

body mist

shampoo

conditioner

salts (self serve in big bowls)

Goats milk soap

Shea butter soap

Java scrub(one special scent only)

Foot line (maybe only for Christmas)

Kids line

Mens line

PS - Where are your bathbombs ;) LOL

Of course you can ask God (I'm all for that as I talk to him daily), but I've found that God helps who helps themselves & Rachel is doing a good job so far! :)

Very well said. IMO it is not necessary to offer so many versions of similar products, i.e. bath & body oil, massage oil, goat milk lotion, satin & silk lotion, etc. Choose one of each, offer a very of scents and you're good to go;) Of course, this is only my opinion.

HTH

Shani:)

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I agree that you have many items that are almost alike. I read an article in a magazine late last fall (I think it was HAPPI) about "almost alike" items by a single maker of B&B items. Cut the lotions down to one or 2 kinds and offer only 2 kinds of scrubs .. get the idea? If people want to buy they will find something even with fewer choices.

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Thanks for all the info.. I am just on overload right now..cause my plan was to be open by sept 1st with the lotion bar up and running and then adding products daily as I had time to make them.. I cannot afford to pay the rent and then not be 'open' for a month while I make stuff for the shelves.

I have been thinking about the lotions and scrubs as well ..it is hard to choose..I picked the goat lotion to go with the goat soap and milk bath..then the silk lotion to go with the silk/shea soap..but I think I might nix those to..and just do the goat..or vise versa..The milk bath is very popular so I can't nix that..it is one of my best sellers..

I have to agree that my scent list is tooooo large..for the lotion bar it is fine but not for what I am going to actually STOCK on the floor.. I think I will pick 10 scents for the floor total..including the men's, kids

and I am going to nix the foot line until next spring/summer when people are getting out of boots and into sandles..good time to try and get new sales anyway..

KristinesShower THANK YOU so much for your help.. as far as the bath bombs go ..you said not to do things that are time consuming..and for me those are..I love making them but wow..they take more time than I want to spend..so those will be nixed for now ..I have to leave products to introduce later.

on a side note:

Most of the 'like' items are interchageable...salt/sugar/base/oil

I make sugar scrub with base..make the brown sugar face scrub with the base/ salt with oil/and salt w/base for foot scrub..

massge oil is going as well..it was for friends who wanted to use a space in my shop for massage therapy..but I am nixing that I need the room anyway...plus they decided to not use my oil..they want hypoallergenic oil???WHAT? anywho ..that is another story.

NancyJo I do buy bases mostly..and in bulk..buying multiple gallons at a time to save money.. I am just getting nervous cause there is soooo much to do and the SBA guy is meeting with the bank tomorrow.

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I don't have a store, I don't have a business degree...just my 2 cents, for what it's worth.

I agree to pare down the similar products and definately scale down the scents. Maybe have some items like lotion, salts and votives in same scents but offer clamshells in different scents. You don't have to have everything in every scent. As your cash flow improves (and I have no doubt it will) "introduce" a new product or scent every month or two.

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A little off target on the products, but here are some other suggestions...You also want to look at the things that cost you money, but you don't make any money on. Like fixtures. make them yourself or buy unfinished ones and paint them yourself. Bags, I can easily put 300-400 out in bags in one shot. I have seperate bags for large purchases and crappy bags for $1-$5 sales. Cash Register...you don't really need one. maybe a cash drawer and a sales book, thats how I started. Credit Card machine..you need one, but try ebay, a $40 one that breaks after 6 mos is better than a new one costing you $50 a month for 2-3 years. Signage...I know someone who paid $4000 for a sign inlaid with gold...OOB in 9 mos. I paid $50 for the amterials and painted it myself...I'm still; in business, but on my 3rd sign (total going at ...$125)

ways to stretch mdse...buy big baskets and fill with tissue paper or a towel or somthing like that and display them in there. Build long skiniy display units that are only 2-3 items deep. Have big display pieces like a tub filled with plastic round clear ornaments to look like bubbles and put in a few items. Fill giant empty containers with bath realted items, towels, washboards, fake soaps(made out of cardboard) Just think of things to stretch your store and make it look full, you make the product, so you can restock daily.

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OH MY, don't nix the bath bombs....seriously... they're things you can make when no one is there...they're ready the next day & they add sooo much color & fun to the entire environment. OR, buy wholesale from the expert ;)

For the cost, they're take up more room for less cost than bottles of lotion & scrubs & people snatch up more because they're 'hard to find' at least that's what they tell me.

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I'd have to agree...don't nix the bathbombs! I think they would be huge for you in a store!!

Now, IMHO...I would probably nix the shampoo/conditioner...unless it's already proven to be a good seller for you. I love homemade b&b stuff, but I can't say that I would be too eager to try shampoo that was homemade.

I'd probably scratch the massage oil and java scrub too. Again, JMO

I think your idea for holding off on the foot line is a good one. Good luck!

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Don't forget the Campbell's Soup theory..... I KNOW for absolute, positive certainty from my stores (and from the companies that trained me and study this) that people like to purchase from WELL STOCKED shelves. We tested it time and time again. Sales doubled and tripled when we had an abundance of each item on the shelves. People do not like to purchase what there are "twos and threes and fours of".

I am not sure with your inventory and "offerings" how many items of each product you intend to stock, but I wanted to share this with you in case you didn't know.

SO MANY people make this "discovery".(not mistake;) )

HTH

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THANK YOU ALL! ..sooo much these are all excellent ideas..

Ok..won't scratch the bath bombs just yet..but definatley the foot line... I make gift baskets as well so this will take up decorative space in the shop..

as far as the shampoo and conditioner are concerened..I decided to carry it because soooo many people have been asking for it..which actually surprised me..but I am sure silk protein shampoo/conditioner is not going to be right for everyones hair..so that i could probably nix as well..and stock other things up more.

I want to add one single flavor of lip cream..so nixing all this other stuff will make it possible for me to add that..which I am sure would sell better than shampoo. :rolleyes2

Thanks again so much..sometimes it is just overwhelming when you are trying to do everything.. from lables, to bookeeeping to pouring candles and making the bath & body items... I can see that I am going to need to add someone part time during the holidays to help me out front so I can deal with all the other stuff. They could wick jars for me or put labels on while I do all the stuff that I don't want them to learn to do..lol..

I have an FO addiction that I have to get over if this is going to be profitable for me.. lol.. I want all of them..but KNOW I cannot carry all the scents I have tried and tested..it would be stupid for me to think that is even possible at this point.

I need to cut down my list to 25..and have only 10 be bath & body..period!..now which ones to cut is the question.:sad2:

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You know another thing I was going to tell you is don't be afraid to hire someone or ask for additional help. Yes, it DOES cost money & you will more than likely have to take that extra money out of your pocket, but it DOES pay in the long run. You won't lose your sanity, you will get sleep and you won't have to feel overwhelmed all the time if you have someone to lean on.

One of the best tokens of advice I got was from an Chamber of Commerce member when I first started:

Do what you know and what you are extremely good at, then surround yourself with people you trust that excel in areas you don't.

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Something my husband said to me that has really stuck in my head is "Don't offer a lot of half ass products, offer a few amazing ones." Not saying that any of yours are half ass at all! He has a degree in business marketing/management and has some pretty darn good ideas from time to time. :) If it were me (and I know everyone is totally different, so take it with a grain of salt) I would start with a LOT of a small line of stuff. Then gradually add on products, see how they do. If they fly out, great. If they fizzle...drop them. Another thing, in my opinion, is having too many products can be somewhat confusing and overwhelming to the customers.

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Something my husband said to me that has really stuck in my head is "Don't offer a lot of half ass products, offer a few amazing ones." Not saying that any of yours are half ass at all! He has a degree in business marketing/management and has some pretty darn good ideas from time to time. :) If it were me (and I know everyone is totally different, so take it with a grain of salt) I would start with a LOT of a small line of stuff. Then gradually add on products, see how they do. If they fly out, great. If they fizzle...drop them. Another thing, in my opinion, is having too many products can be somewhat confusing and overwhelming to the customers.

Good point..that is a reason I posted this..i was starting to get scared that if I did all this on my list then the time I would have to make it all would make the quality drop..I would be rushing to get it all done and then well who knows what things would come out like.. don't want that.

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I do believe that is what message boards like this are for Rachel - to bounce ideas off each other. I always think it this way - the more successful another soaper becomes, the more business rolls my way by creating awareness in other parts of the country!

I would not be where I am today without Lush and Me!Bath's bathbombs! I know they are competition, but I secretly hope they keep getting better and better (and busier), because that creates more business for me :)

Oh and as far as asking questions before - who the heck has all that extra time to keep tabs on what people are asking *SIGH* I certainly didn't see her ask this last week as well as most of us didn't & who cares anyway?

Sheesh, why so negative all the time?

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Thanks KristinesShower.

That is what is called a TEAM... Most big business don't just make decisions on their own they work in teams..I work for one right now..one of the best companies to work for..the best one I have ever worked for.

Two heads definatley think better than one..and three better than two..etc etc. If that is not what this board is here for well..then what is it for????? Off Topic? Dont think that is the intention.

You all have given me some great feed back on this..and I am revising my start up inventory and scent list...I have several similar scents anyway.

Is is just me or does Patchouli and Sandlewood smell awful similar.

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I do believe that is what message boards like this are for Rachel - to bounce ideas off each other. I always think it this way - the more successful another soaper becomes, the more business rolls my way by creating awareness in other parts of the country!

I would not be where I am today without Lush and Me!Bath's bathbombs! I know they are competition, but I secretly hope they keep getting better and better (and busier), because that creates more business for me :)

Oh and as far as asking questions before - who the heck has all that extra time to keep tabs on what people are asking *SIGH* I certainly didn't see her ask this last week as well as most of us didn't & who cares anyway?

Sheesh, why so negative all the time?

I agree with Kristine, the better they do the better I do, whenever I do shows my stuff gets compared to LUSH...which I take as a huge compliment, I sold a TON of bathbombs this weekend, lots of 4 packs, and got quite a few LUSH comments again

People like unique items, my best-selling items are always lotion bars, loofahs, self serve bath salts and bathbombs because they are diffrent from from what everyone else carries

Patchouli and Sandalwood are similar but they both attract people that like one or the other..Patch lovers love Patch same for Sandalwood, can you believe Patch is still my best-seller with all the fragrances I carry? LOL

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I just wanted to add a "Thank you" for posting this question and a super big "Thank you" to those of you who took the time to answer it. I am new to all of this and the information listed here has been immensly helpful to me. I am not near ready to open a store, but it is great to have this information in the back of my head. I'm trying to plan for the now and the future and it's only with the helpful posts like this that I am able to do that.

Thank you for taking the time to post your thoughts. Us newbies can gleam a ton of important information from you. :highfive:

Ginger

FUNKY MONKEY

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