Our Family’s First Year in Business
This was a big year for our family.
We moved from suburban Pennsylvania to rural Upstate New York, started a little family farm, and launched a small, home-based candle business.
Most of the success I’ve had in life has come because of the generosity of others, so I wanted to give back with some transparency. Hopefully, this “behind-the-scenes” look at starting our home business will be helpful to anyone thinking about doing something similar.
We sold 289 candles this year.
Our starting line-up of 8 fragrances went on sale in August at Funcycled in Troy, NY (my sister’s store). The first candle sale was to a lovely woman named Anna who was visiting from Switzerland. We also sold a large wholesale order to Ace Hardware Shop for their reimagined home goods section. Then, in mid-November, we made our candles available online, and my good friend Drew Johnson made the first purchase.
Even though our candles were available in-store almost 3 months before being available online, in-store sales only accounted for about 45% of our total sales. Online sales were especially good thanks to word-of-mouth by friends and a lovely write-up at Simply Recipes.
The most popular candle fragrance (by far) was Spiced Cranberry, which outsold all others, despite only being introduced in November.
We spent quite a bit more than we were expecting to, but we were pleasantly surprised to be in the black by year’s end.
TL;DR — We grossed about $5,465 and spent about $4,310, which left us with about $1155 of profit — about $4/candle.
Here’s the breakdown of our costs:
Product: $1882 (43%)
Our largest cost was the equipment and materials for making the candles: wax, fragrance oils, jars, lids, wicks, equipment, and labeling. Unique fragrance oils and letter-pressed labels were a bit more expensive than we expected, but we felt like these were two places where quality mattered most: touch and smell.
Figuring out how to get affordable labeling that’s also relatively flexible was challenging, but the handwritten fragrance labels made it possible for us to get the costs down on a nice labeling while providing a look that set our candles apart. It’s something we’re still wrestling with as we consider adding different products to our line-up. (Oh, and a big shout out to Mama’s Sauce for helping us navigate the print process and doing quality work.)
This category should be lower going forward since many of these were up-front costs.
Packaging: $869 (20%)
We put a ton of thought into our shipping. We wanted the experience of getting a candle package from us to be delightful, so we spent a bit extra in this category (and have plans to add even more). Letter-pressed business cards and thank you notes, branded kraft paper, shipping containers, etc.
The biggest expense here were letter-pressed business cards, and I’m still not sure they were worth the cost (but they’re cool!)
Web: $380 (9%)
I spend 8–10 hours a day in front of a screen doing web design, so I decided to skip building a custom site (for now anyway) and went with a pre-built WooCommerce theme. It was a fairly pleasant experience, though a little difficult to configure just so. It’s a brilliant marketing strategy they’ve got: get people hooked on the free product, and make it very compelling to upgrade to paid features (which I did). Setting up shipping with WooCommerce was difficult, though, and something we’re still trying to do better.
This also includes our font licensing and credit card reader.
Shipping: $406 (9%)
Shipping was the biggest headache, by far, and one of the main reasons it took us a while to get our shop online. Trying to figure out which carrier to use, how best to calculate rates, how to integrate with our ecommerce software — a slog the whole way, though we largely have it figured out now.
We offered free shipping for online orders over $50.
We spent a total of $615 at the post office, and we collected $209 online, which meant that we ate $406 worth of shipping costs. This translates to about $2.75 per candle sold, which is quite a bit; but when you consider that we averaged 3 candles per order, we felt like it was worth it.
Marketing: $378 (9%)
We were invited to a local craft fair around Christmas, so we spent some money putting together a display for our candles. This category includes banners, posters, and some sweet screen-printed Thoughtful Gardner t-shirts.
Fees: $106 (3%)
All of our online orders go through Paypal (for now), which takes out about 3% per transaction.
Donation: $289 (7%)
We decided early on that we would donate a portion of each candle sale to charity ($1/candle), and this year we chose the Capital City Rescue Mission in Albany, NY. They do fantastic work helping to meet the needs of homeless people in the Capital Region, and we’re glad to support them with our business.
Time & Labor
Several people have asked about the time we invest into our business. I’ll divide this section up into startup time cost and ongoing time cost.
First, we made a significant time investment at the beginning getting the business off the ground. It’s a little difficult to calculate just how much time, since we approached this more like a hobby early on, but it’s safe to say that we spent significantly more time getting it it started than we do now that it’s off the ground.
Jessica spent time learning the candle-making process, experimenting with pouring, figuring out how to get the wax to set properly, discovering the best ratio of wax to fragrance. I spent time creating the logo, setting up and customizing the site, researching shipping, designing all the packaging and marketing materials. We both also spent time discussing our business philosophy and selecting the fragrances we liked best, the jars and lids we wanted to use, the best paper for labels. We put a lot of thought into the packaging for shipped orders, and we spent a considerable amount of time assembling and organizing our store and craft fair displays.
This all took a significant amount of time — probably over 150 hours — that doesn’t show up in our expense numbers.
Our ongoing time costs aren’t nearly as intense, especially since we did invest so much time up-front getting things in order:
- Jessica can pour about 20–30 candles per night, and she’s pretty good at keeping a good amount in stock. Pouring time is really minimal per candle when doing larger batches.
- Packaging time is about 5 minutes per order, which is negligible until right before Christmas, when I had to factor in a bit more time to handle the increased order volume. We wrap a candle, box it (individually), place it in a flat-rate shipping box (for multiple candle orders), then a quick run to the P.O. which is only a mile away. We usually process a shipment the morning after an order comes in.
- For the hand-written fragrance labels, I usually write out 20 or 30 ahead of time while I’m watching doing something mindless like watching tv, so no big time suck there.
- Marketing/support is probably the most time consuming: touching base with customers, following up with shipping problems, replying to messages, pictures, updates to Facebook, etc.
There are some “future investment” time costs that aren’t reflected here: experimenting with new fragrances, planning new marketing campaigns, developing new product lines, hocking candles at our local craft fairs and farmer’s markets. But these are hard to quantify, especially since this isn’t my full-time job and these tasks typically fall to nights and weekends.
We’ve got a lot of ideas for 2016.
In the candle department, we’ve been working on a tea light sampler so people can smell all of our scents before buying a large candle (packaging them so the smells don’t mix is a pain). More on that soon.
We’re also working on a candle made from recycled wine-bottles, a line of candles made with essential oils, and some fun new fragrances for Valentine’s Day.
We’ve got big things ahead for the farm as well.
I just received my Flow Hive, and I’ve got a nuc of bees coming in late April, which will be just in time for the fruit trees that we’ll be putting in. We’re also in the process of planning out our garden (thoughtfully, of course!)
Also, more chickens! Ethan got an incubator for Christmas, so we’ll soon be hatching our own chicks (to replace the ones that the fox ate).
We honestly couldn’t have had the success we did this year without all of the incredible support from our friends and fans. Happy New Year! 🎉
Jesse & Jessica Gardner
Originally published at http://thoughtfulgardner.com/misc/2015-state-of-the-gardn/