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My First Business
By Terrence Warren
Thursday, February 21, 2008
Rated "PG" by the Author.
These tells about how I was motivated to start my own buisness and become self-employed.
Featured In: From The Gutter To Glory
When I decided to start a business, I originally wanted to start an urban fashion clothing store. It seemed that Columbia, SC, was over-saturated with urban style stores, so the competition was very thick. That's when I decided to go with a women's clothing store instead. After researching the market for women stores in the city, I found that, other than at malls, there were a limited number of women stores, which meant less competition.
Unfortunately, opening a clothing store turned out to be much more difficult than I had expected. The overhead to open a store was considerably high, which meant I needed alot of money just to get started. Knowing that my credit was bad, I had no chance of getting a loan. My next course of action would be a small business grant.
After months of chasing down info and possi-ble leads to get a grant, I realize that it was damn near impossible, so I gave up. I sought out grant writing companies because the average person does not know how to write a business plan or grant proposal for grants; I was no exception. This wasn't something I had ever been taught in school. I bought software and books hoping to learn how, but it seemed easier to hire a company that specialized in writing these proposals and business plans. So that's what I tried next.
I learned later after talking to a few of these companies that in exchange for their services, they required a percentage of the grant. The larger the grant the larger the percentage, even after you already paid their fee up front. Most of the time this fee was well into the hundreds. So once again I was learning I needed money to get a supposedly free grant; how-ever, I was not interested in this because I wanted to learn how to write a grant proposal for myself, and, by going about it this way, how could I ever learn? I wanted to be self-sufficient and not need these services, so I planned another course of action.
Since the clothing store was too expensive for me to do without the proper funding, I decided that maybe I needed to do something with little or no overhead, something just to get started, a starter business. This business would be used to generate revenue to finance my clothing store so I would eventually have two different sources of income.
When realtors want to get started in real estate, they buy their first house, which is typically a starter home used as an investment to launch their realty. Once the home is sold or rented out, they use the income to buy more houses. This practice can also be used in business, so I applied this technique.
The idea of a website was brought to mind, but what would I sell on the Internet? While trying to figure out what I would sell, I was out eating break-fast at a local restaurant wearing a very unique brand of shea butter lotion. My waiter was constantly walking by, sniffing at me. Finally she asked, "What is that cologne you're wearing? You smell really good." I answered, "I'm not wearing any cologne. Maybe you smell my lotion." I gave her my hand to sniff, and she did. Immediately, she sighed and placed my hand against her cheek. "Yes. This is it. Where'd you get it? I want some." After talking to her for a few minutes, I thought about what it was I was wearing. The particular brand I was wearing wasn't a well known brand at all. Matter of fact, very few people even knew it existed. No one had ever heard of it. The product was a good product, but no one knew about it. If I could distribute this product, I would make a very good profit from it. There was only one store in all of Columbia, SC, that even sold the brand, so I began to research the company.
When I finally found the company's website, I was able to get its contact numbers and email ad-dresses, and I finally got the contact info of the president of the direct sales department. I called him and left messages stating that I wanted to become a distributor and needed more info. After a few days he called me back, and I was very excited that he took time out of his busy schedule to converse with me.
We talked for a long time. I told him of my ambitions and goals, and he told me about how he got started. He told me that if I ever needed anything to give him a call, and he would help any way he could and that he was glad a young man such as myself had taken an interest in becoming a distributor. He was in his early 30s while I was in my mid 20s. By the time I got off the phone, I had become a distributor, made my first order having put no money down, and made a new friend.
I later started my company and website, which was called Warren SkinKare, and sold the skin care products on the website. The products consisted of lotions, shampoos, scrubs, astringents, conditioners etc., and the products sold well. People would always come to me or call me to place orders, and that soon began to bother me. I wanted them to order from the website because if I wasn't available then I would lose potential customers, and at the time I was still working a full-time job. If they would go to the website to order, I would make money regardless.
One day while I was on my full-time job, I met a man who owned a large international trading company. I was installing cable at his house, and he wanted someone to hook up his flat screen TVs and surround sound system.
This wasn't a requirement, but I decided I would kill time until my next install, and it would give me a chance to talk with the man. His house was huge, and I admired it. I wanted to know how I could get to that status of living. I asked him what his occupation was, and he explained what he did. I told him that I had recently started a small business, which was a website that sold skin care products. He then told me that he was looking for a product to market in five countries overseas. I asked, "Why just over-seas?" He explained that if you have a premium-looking product, it will sell. No commercials needed because overseas buyers don't know the difference between generic and name brand. They just go by how the product looks.
He then asked me if I was a supplier or a mid-dleman. At the time I didn't know what he meant, and after he explained it I realized I was a middleman, which was bad for me. As a middleman, my custom-ers buy from me and I buy from the supplier, but if the customers were to find out who my supplier was, they could buy from him themselves for a cheaper price, leaving me dry.
However, if I were the supplier, then custom-ers could not go to anyone but me, and I would never be left out. I became interested in doing this, so I asked how to get started. He told me that I should develop my own line of brands with my own unique scents. It sounded like a lot to do, but he had contacts to manufacturing companies that specifically manu-factured and formulated original skin care products.
After he gave me this information, he assured me that if I developed and distributed my own products, we would later do business together. He also reminded me to make sure I used universal names for the products; that way they would appeal to everyone. Certain name brands target specific people due to the name; an ethnic-named product would only appeal to ethnic people, even if the product is intended for everyone. I took all this into consideration when I began to establish my skin care line.
I began requesting quotes on custom formula-tions of uniquely scented products. By adding a mixture of body oils to an unscented lotion base, I could formulate my own distinct fragrances, and by adding more than the standard percentage of the fragrance oil the fragrance would be more potent than the average lotion fragrance.
I began to apply this to other products I had developed, such as scrubs and body sprays, and named the brands often after statements or catch phrases, and sometimes family nicknames. I would call the manufacturer that I had chosen to formulate my brands and give the info about the product, such as the name, the oils to be added and the percentage to be added. Then I would order bottles and labels from another company and have them shipped to the manufacturer. Once the product was formulated, filled, bottled and labeled, I was required to order a minimum of 100 units. I would buy the 100 units and send those out to other skin care companies as sam-ples, and, shortly after, they began calling to place orders.
Next I had to change the website. I made it so that it was now a wholesale website. By selling in bulk, I was able to make a $3 profit on each bottle sold, and by setting a minimum order requirement I was able to make back the costs of manufacturing, plus a substantial profit on each case sold. I made about a $3 profit per bottle and set a minimum order of 10 cases. Each case held a dozen bottles, so I would generate $360 from a minimum order. If a huge distribution company owned 25 stores in its region of the country and ordered 150 cases, I would profit $5,400.
That's just one customer. Often, there were many customers at one time. Sometimes four in one day. So my small skin care website eventually turned into a big skin care company. Because I sold my products overseas as well, it was also an export company.
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