In business, I am continually reminded of the saying ‘you don’t know what you don’t know’.
The saying is true but in order to grow a business, you need to do your due diligence early on. Think about the long-term strategy of your business, and explore all the relevant facets that may not even be on your radar yet, before you even start developing your product or service. It’s the best advice I can give anyone.
Rewind seven years to when Kester Black launched its first six nail polish colours. It was a great product that nobody else was doing and we had finally found our niche.
At the time we were mostly distributing through bricks-and-mortar stores and getting amazing feedback so we went full steam ahead. The problem was, as Kester Black started to take off our focus started to shift and we started to stumble across roadblocks that we hadn’t yet come across.
These were our biggest challenges.
Getting our product from A to B was one of the biggest and surprising challenges we faced.
It seemed incredibly straightforward but what we didn’t realise initially was in order to ship nail polish anywhere in the world you need a dangerous goods licence. This licence is for the shipping of all dangerous materials, not just nail polish.
It meant I had to pass an exam (yes, there was an exam), which took five months of study, four attempts and lots of encouragement from friends and family.
We discovered this 18 months into our business journey and while we were able to overcome it without penalty to the business, it was definitely one of the most stressful and difficult things I’ve ever done in my life so far.
Before developing a product, understand the complexities of logistics early on and whether any special requirements are necessary for that product. Research methods and costs of shipping to find the cheapest and most effective solution for your products.
Build a bit of fat into your prices as there will always be something that you haven’t considered, and when it comes to e-commerce, consumers expect free freight, so try factoring this in to be more attractive to buyers.
When I first started Kester Black it was more of a creative outlet for me and I certainly didn’t intend to start a global business. It hadn’t occurred to me that the business would take off in such a way that we would be entering new markets internationally.
It meant we had to learn and understand how to operate in other countries with different regulations to our own, which is quite a feat given I wasn’t aware that Australia had cosmetic regulations at that time.
So we did our research and thought we had covered all bases, successfully shipping worldwide for six years with no problems.
It wasn’t until we partnered with UK department store Liberty that a labelling error was discovered.
While our Kester Black labelling was 99% perfect it was missing one thing — the label was required to have an EU address on the packaging but we had an Australian address.
It was an incredibly expensive fix — we were quoted anywhere from €$30,000 to €$70,000 — so despite it being a minor oversight, it had potentially very big consequences. It also meant we had to take our stock off the shelves while the problem was addressed and the stock re-labelled. This put our relationship with Liberty in jeopardy, which would have been a big blow to our business. Thankfully we were able to overcome the issue.
Before entering new markets, I can’t stress enough how important it is to do your due diligence.
Speak to other brands that have done it before so they can highlight issues before you go and make the same mistakes. Also, use your networks to find people who have experience in that area and pick their brains.
In most cases, I’ve always found other business owners to be willing to share their experience to help others. I was lucky enough to build a fantastic network through the Telstra Business Woman’s Awards, which has proved invaluable in helping me throughout my business journey.
We’ve definitely had our fair share of bad runs with suppliers — because as a small business, we haven’t always had the time, money or resources to keep paying to fix things, or pay for the big guns. From being charged for services that weren’t completed, taking advice from the wrong people, to agreeing to pay for services not in writing, we’ve faced huge consequences.
Trusting someone to do what they say they’re going to do can’t always be relied upon.
Use your network to your advantage. Most people I have worked with have been through my network of contacts so while they may not work in my industry, they’re from a like-minded community.
Secondly, I’ve learned how to do a lot of things myself. For example, you need to find a good bookkeeper — that’s a no brainer — but I went one step further and found a bookkeeper who was willing to train me on the accounting software so that I could understand how things work. It just makes things so much easier when you understand what’s going on!
Also, be sure to set expectations upfront. Have your supplier outline in writing what is and isn’t included (high-level quotes aren’t good enough), agree on due dates and negotiate hard for discounts on late delivery. We’ve had service providers who deliver months after they said they would and there was nothing we could do as we didn’t have a service agreement in writing. If you’re signing yearly agreements, ensure you set up a three-monthly review to identify early on whether the services are being delivered on time and as agreed.