Owning a small business is all about balance. Whether it’s finding harmony between your work and personal life or the money going in and out of your business, we know you have a lot on your to-do lists! All of these checkboxes have never been more important than right now as we all deal with the effects of the COVID-19 pandemic.
Have you ever considered a pre-sale? Thought about offering your entrepreneurial expertise in a virtual workshop? Explored services like Afterpay to pay in installments for your materials? Wondered what to do with a product that just isn’t selling as well as you thought? Small Business Owner and Spoonflower Maker Community Manager Alexa Terry Wilde is here to address these questions and much more as she shares her top tips for managing your business’ cash flow.
Meet Alexa Terry Wilde,
Spoonflower’s Maker Community Manager
Hello! My name is Alexa and I’m Spoonflower’s Maker Community Manager. I have the pleasure of advocating and producing content for the vibrant, maker community here at Spoonflower. But advocating for makers and small business owners is not just part of my day job—it’s a huge part of my identity outside of Spoonflower. You see, I’m a small business owner too!
My business, Antlers and Astronauts, has gone from brick & mortar to side hustle and just about everything in between over the years. I know all too well about the highs and the lows of small business ownership and I have a strong understanding of what challenges makers face, especially when it comes to managing a successful business. That’s why I’m here!
As a small business owner, have you ever found yourself wondering: “I have this incredible idea for a new product but I wonder how I can fund it?” or “How do I manage a demand for my product that outweighs my inventory?” or “I’m ready to scale my business but how do I take those next steps?”
If you answered “yes” to any of these questions, you’re not alone! These are questions small business owners frequently ask themselves as they begin to grow (and, subsequently, find themselves stretched thin financially). Regularly assessing your cash flow is absolutely critical to the growth and success of your small business. Here are some tips for expertly managing your cash flow to better support your growth.
Negotiate Your Terms of Sale
First thing’s first: if you’re ordering raw materials from a business to make your end product, see if that business would be willing to offer longer payment terms like Net 30 or Net 60 for your order. Oftentimes, these terms will only be offered to vendors the business has an established relationship with but it doesn’t hurt to ask, even on your first order! This gives you at least a month to receive the materials, begin crafting with them, and even sell your product before your invoice is due.
Another option is to break up your total into more manageable installments, which is something that Spoonflower is now proud to offer through Afterpay! Curious about how it works? Simply add the material to your cart, select Afterpay at checkout, login or create your Afterpay account and then your payment will be split into 4 payments payable every 2 weeks. Learn more about Afterpay* on our site.
*AfterPay on Spoonflower.com is currently available to residents of Australia and the United States.
The Spoonflower cart experience will calculate exactly how much your split payment will be every step of the way!
Apply for Grants or Other Support Programs
Although it’s incredibly helpful for some small business owners, Net 30 and Net 60 terms won’t do you much good if you simply don’t have the capital. What then? Consider searching for grants that are applicable to you and your business (you could always begin your search here, with our Small Business Grant!).
Applying for grants can be overwhelming so you may want to seek out assistance from someone who is knowledgeable about the subject. There are likely non-profit organizations in your city or town that can provide you with resources, as well. For example, here in Durham, the local technical community college’s small business center offers one-on-one counseling sessions and the Office of Economic and Workforce Development provides a portal for helpful local resources including a list of grants and loans available.
The Benefits of Pre-Sale
When you’re almost ready to launch a new product or collection, but need a little extra security and/or (financial) cushion, consider a pre-sale for your launch. A pre-sale can help you determine demand and allow you to order the exact amount of materials needed to complete a run. Additionally, you take the guesswork out of whether or not a product will sell, preventing you from investing money and time on a product that may end up sitting on your shelf for months to come.
There are several ways to go about a pre-sale: there’s the “pay now” option, “pay later” option, or crowdfunding option. “Pay now” means your customer is paying up front, at checkout, so you know the demand is there AND you’ve got the money in your pocket. “Pay later” doesn’t necessarily help you up front financially but it does give you an indication of exactly how many units you’ll need to produce.
If you choose to go this route, be sure to indicate to your customer how long your estimated turnaround time is. The crowdfunding option is best if you’re taking on a large project, like launching a robust collection or introducing your brand for the first time. Be transparent with your backers about what they can expect to get from you once they make a donation, whether it’s a coupon code, a free sticker, or even a finished product from your new line.
Purge Product that Isn’t Selling
You created or invested in a product you really believed in and… it just isn’t moving. Now what? First of all, don’t be too hard on yourself! Any number of factors could have contributed to the lack of sell-thru. Perhaps the timing was off or it simply didn’t land well with your existing customer base.
My grandfather was an entrepreneur himself and he founded the business that my mother now owns and operates. He used to say “Get rid of your dogs!” which meant: sitting on product that isn’t moving is actually doing more harm than good. Mark it down, ship it out, and reinvest the money you made to develop new products. There are no failures in business—only “data points” for you to process and determine how best to move forward (a helpful little tidbit I picked up recently from Crissy Battle of Stitch Collective!).
Be Open to Alternative Cash Flow Opportunities
Now you’ve gotten into the groove! You’ve perfected your craft and you feel good about the product that you make. Are you ready to scale and can’t quite figure out how to make the next step? Maybe it’s time to consider ways to make money beyond just the products that you sell.
As a small business owner, you’ve got to think like a true entrepreneur. Consider alternate cash flow opportunities: collaborations with like-minded brands, virtual workbooks, in-person workshops, a series of online classes, subscription boxes or services—the sky’s the limit! For more inspiration, check out Shay Spaniola’s story on the Spoonflower blog.
When you’re regularly assessing your cash flow, working with vendors on a schedule that makes sense for your business and taking advantage of services like Afterpay, making sure your product is moving, and staying open to alternative sources of revenue, you’ll be on the fast track for growth in no time!