November Wake Up Call
What I learned in November is never take customers for granted. I lost 3 of my best customers. One told me she bought a washer and dryer. The other 2 just stopped ordering out of the blue. All 3 customers were weekly customers that accounted for a third of my overall sales.
I took my foot off the customer acquisition pedal back in August to keep up with the business I was getting. I regret that. I should’ve outsourced more of that business and spent more of my time on marketing and sales.
I thought maybe the holidays would increase business because people would be too busy for laundry, but it seems that the opposite might be true. They’re cutting laundry as an expense. This may result in back-to-back down months in November and December which would be devastating. At least I learned that I should never slow down looking for new customers.
Milestones & Cash Flow
As I said last month, the only milestone that matters at this point is positive cash flow. My brother and I are buying a house this month so we had to divest even more money! I only have a month of runway left in the bank. But I know I have more than that behind the scenes. I’m going to lean on my brother to make it through the next couple months until I get my tax return and then put that into the company which should give me a few more months.
There’s no doubt I need to become cash flow positive or risk going out of business in 2017. The stakes are high because going back to being an employee is out of the question. 2017 will be do or die.
Sales
November was a down month, mostly because the week of Thanksgiving. Sales plummeted by 80% and haven’t picked back up since. The saving grace was the phenomenal week I had at the beginning of the month. It was my first week to break $1,000 in net sales. Here are the monthly and weekly sales charts.
Notice that Thanksgiving week (2nd to last week) sales dropped to only $120. At minimum, December needs to be better than November. I will have to hustle hard to get back to where I was in October.
Marketing
I’ve kept advertising expenses under $300 for each of the last 4 months. This is what I mean by taking my foot off the pedal. For December I’m sending cards with discounts in them to most current customers, advertising on Instagram again, and putting together a very aggressive marketing plan for Q1 of 2017.
Profit & Loss
I sometimes feel like my numbers are totally amateurish. They’re relatively tiny to the point where most people would rather stay employed than embark on such a fruitless journey.
This is why patience is so important. The name of the game is learning how to get to positive cash flow. I realized that only after getting this far. With investors these numbers would be bigger, but the game would be the same.
The order of my milestones are
- Product-market fit.
- Positive cash flow.
- Profit.
- Open 1st brick & mortar location.
I believe I have achieved the first step. I was able to generate $25k in total revenue from only $8k in starting capital. Furthermore, my transactions per repeat customer are 5.2 which indicates very high customer retention. In fact, a whopping 80% of my sales from last month are from returning customers. If product-market fit means that you see a road to both profitability and scalability, then I have it.
December Goals
We are closing on a house this month which is going to put a choke hold on my personal and business finances. It’s fine because I work better and faster under pressure. I have to. All the numbers and all the blog posts, and the branding, and marketing, and sales, and laundry, and driving… all of it will be thrown in the trash if I don’t achieve positive cash flow in the next 6 months. That’s the wake up call.
Stay tuned because in December I’m going to be reflecting on the first year of my business, talking about the big picture, and planning out the major Q1 sales blitz.
This story is part of a series documenting the journey of a 2016 Dallas startup called Feather. For your reference here is the Table of Contents for the series.
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