They are some huge plans coming together!!! J&L is planning/working towards/investigating – whatever word best suits this – an actual retail & production location; a brick & mortar store front with room to produce goods. We are very serious about it this time.
We have taken many baby steps throughout our history, with this last 2 years experiencing a major growth spurt in revenue and customers. We also had a dramatic increase in the number of items we make and sell. With all of these factors, we think that the timing is right to start taking this next step. When we added candles and other JÖL for Home items, we did not see a drop in sales in other categories. What we did see was an instant increase in sales by 300%. And all these new items carried similar margins, meaning we had an equal growth in profits.
Being a grounded realist that also has big aspirations, this has my head spinning. I am currently in the throws of managing a peak business time of the year while trying to get the ground work in place to start the process towards making this happen. Having this as our mission for the next 12 to 15 months we cannot allow any part of our current business to slip. Also during this time we are furthering our push into being more sustainable. The metrics around that are still be compiled.
Here is a deep dive into what we are looking at and what is making this possible. It is all in the numbers. There will be a new business plan drafted that we will get on paper to show our realities and our goals, as we seek to justify this path we are embarking upon with real facts. The reality may be, that it is too soon or that the sales just aren’t there at the time. But this exploratory effort needs to be done. And, we are pretty confident that we can do this.
Some of What we Can face in our journey
Chicago is an expensive city to live in. It is not any less expensive for a business. Commercial rents are high, especially if you want to be inside or adjacent to a good commercial area. Licenses, fees and “red tape” can sink a ship before it sets sail. This is why so many businesses here close within only couple years after opening. The debt you build to just get to the point to open doors to the public can be too heavy to carry if sales are not substantial upon opening. One little downturn can lead to disaster. Something seemingly small like a heavy snowfall can do enough damage to a business to bring it down if not prepared for such fluctuations.
When renting commercial spaces, usually every aspect on the facility is your responsibility to maintain. Including HVAC and plumbing. Sometimes, heating is included if there are apartments above and the building is radiant heat, same goes for water. Then there are the other services that by nature are more costly for a business; internet access, phones and security. Security will be an essential issue for us as we need to make sure that staff and customers are safe during operating hours and the property is protected when we are closed. Insurance is not enough to give a solid peace of mind.
There is a very important, common sense, chain of events that must happen. To make money we need to spend money. To have money to spend we need to make more money. Starting with this Holiday season, we need to maximize every customer interaction and event. That means we need to do more events. Traditionally we have seen a spike in online sales after each event. These sales can be either new customers who looked but did not buy at the event, they are returning customers, or they are referral customers (likely from a customer that purchased at an event). We have no means to test this to be fact or not, but it is a very reasonable assumption. At the same time, we need to make every customer interaction, whether online or in person a more positive experience. So far we have had very minimal negative interactions but we cannot drop the ball now. It is unreasonable to expect every customer will like you. There is far too many variables at play to guarantee 100% satisfaction of the brand, the product and the persons behind it all. Books do get judged by their cover, and all we can do is be polite and respectful when we interact with everyone – even when they are not being polite or respectful.
We need to find a way to not only gain new customers but make it more likely that customers will return to shop with us. A down side of selling at festivals is that often they are impulse purchases. A purchasing customer uses the product and may not seek to repurchase no matter how much they enjoyed the product; as it would be more effort to seek them out online to order more. Much of what we sell is not so unique that other products would not be purchased that are more readily available to them. You need a good lotion, every store near you will have a quality lotion to serve your needs. The objective for us is to have our products be more desirable and sought after. To have such a positive impact that we not only meet a need but also become a want.
Organic growth has always been our method. Organic growth is growing from within, building upon our current customer base to drive more sales and gain new customers. Finding customers through more natural methods versus relying upon marketing, aka advertising. We like to have ourselves be a found treasure that was attractive enough to seek out again. We also hope that our customers tell friends about us to gain new customers. Why is this our chosen approach to growth? It builds loyal customers and strengthens customer relationships. Loyal customers come back again and again; they also are more likely to try other products. By telling friends, they are a more trustworthy advertisement than anything we can create. Word of mouth is great when it is mostly positive.
What I Bring to the Table
Going into this, I bring years of retail and inventory management. I was responsible for merchandising, facilities and heavily involved in sales analytics. Knowing the chain from products coming in the back door and getting them out the front door is nearly second nature to me. The difference here is that I am 100% responsible for how the product gets to the back door as well as paying to have access to that door from the inside. This is where I need to focus most. Finding the means to secure a space and develop a path to pay for it and keep it. At this stage in my life this is very scary and I may not have the same resiliency if it does not work out as I would if I was younger.
Most of my work history has been as a supervisor or manager. I have lead and built diverse teams that worked by using everyone individual strengths and overcome opportunities of others to successfully achieve goals. With countless awards and recognition for what we accomplished as a team, I think I have this part down.
Sales analytics is a cosmic skill set that is essential to what I do. Understanding what UPT, RPT, GM%, COGS, SGA, NOPaT, P&L all mean and how knowing how it all breaks down and intermingles is how to genuinely know your business. Success of a business is not just having money left after paying all your bills. If you don’t know how you are making money, where you are not making as much money as you could and be able to identify what is draining your revenue then you honestly should not have a retail business. When asked what is your biggest money maker and why you should have an answer right away. You should also know what is making you the least amount of money, what that is and what you can do to improve it. I used to test sales leads their top 10 drivers and top 10 drainers for their department, if they could not answer we had a talk. These are fundamentals, along with managing inventory – that is also second nature for me.
So Why Now…
We are near capacity when it comes to our ability to store inventory and make product. There is still a little room to scale up without it creating too much congestion, but we see max capacity on the horizon. Currently, all inventory is held in my home. We do not have a permanent production location that can hold and secure it all, so all inventory must be stored somewhere. Many of the products are finished in my home and others are made from scratch here. We do meet all safety guidelines for what we do and our operation is 100% legal by state and federal regulations. This changes as our sales increase. We are currently operating as a craft maker/seller but there is a dollar amount that changes that definition and adds more scrutiny to all that we do. We are not alone in our operations as many of these local soap, candle and beard oil makers operate exactly the same way and it is why there are regulations to allow it to work this way. Many great businesses start in someone’s kitchen or garage. We just want to be one more of them.
Sales are rapidly increasing, and with that adds the fact we doubled the quantity of SKUs we sell. We have seen our sales at events be 4 times their pre-pandemic performance. In one event today we are doing the size of business we did in 4 events up to 2020. More sales necessitates an increase in inventory levels. To support those inventory levels we need to maintain a larger inventory of supplies and a large enough space to handle making them. Logistically, this is a necessity. Bringing all aspects of our business under one roof with enough square footage to hold us for some time as we continue to grow. If we need to have an office, warehouse, factory; it’s only logical to also have retail there as well.
With our growth is more interest from customers in us having a store to shop. “Where is your store?” is asked by many of our shoppers. Having a real physical location for a customer means they are dealing with a more reputable business. It gives peace of mind that if there are any concerns about the product there is a place they can go to have it answered. Even in the world of Amazon, having a place they can locate on a map makes a business more trustworthy. It provides a sense of permanence. I have covered this in J&L blog posts, how there are so many D2C (Direct to Consumer) schemes out there. With little effort, knowledge or money launch an online store and market it to millions. Consumers are rightfully wary of online only businesses. A caveat for us is that we at least can be found with our event pop ups. Being seen at events year over year ads confidence. Combine the two groups and you have a promising customer reach to have a better chance at success. We want to capitalize on all of that.
Having a facility to handle manufacturing on a larger yet still small scale, manage online sales and order fulfillment and be able to serve customers right there in the community is where we need to be next. Our current capacity in candle production is roughly 16 candles per 4 hours. This allows enough time to prep, fill and let cool that many candles before we can reset to make another 16. By then, my day is done. Doing this all myself leaves me little time to tackle other needs of the business as well as for myself. Granted, this is not every day. During spring and fall it is a good chunk of my week. If I am capable of selling 12 to 16 candles of each scent over the course of 3 days, I need to be able to restock that many units in a short period of time. And that is just candles. There are lotions, soaps, beard oils and more that need to be made. It all comes down to having the right amount of space to do it. If I can have more than 1 wax melter going, then I can do more candles. Along with more surface area available to let the candles safely cool and cure.
More Space; More Hands on Deck
To make all of this become reality, if everything else falls into place, we will need to hire a team. At the start, no more than 3 people will be needed to sustain business and promote further growth. One of those people will need to be highly reliable, trustworthy and capable of taking on some added responsibility. I will need a right-hand person. Someone I can give a little extra responsibility to handle some back end duties. Somewhat of an assistant for me and little bit of a manager when I cannot be there. They would also be trained on how to make products. The others will be cashiers, sales team, and general reps. They would cover the register during peak times during the week. I would have to keep these role part time until we are stable and have gained enough traffic to warrant at least one becoming full time.
I have a background of building highly efficient teams comprised of diverse individuals who wish for overall team success. I will strive for nothing less. Anyone who joins us must be professional when they need to be otherwise easy going and relaxed. Like any small business with retail, flexibility and the capability to handle any situation that occurs. No task should be beneath them and understand that any daily task is likely their job. I don’t believe in a role be any one person’s responsibility, but be everyone’s responsibility. Most of all, we need to function as a team and uplift each other to do our best. If this is something you wish to explore, keep a look out for us to hire. A good way to get a foot in, is to help “volunteer” during an event.
When is this going to happen?
The aim is set for November 2023. I’d prefer earlier than that but there are so many variables in play that it could easily end up going into 2024 before we can open the doors. Foremost on our goals is to have a successful Holiday 2022 and perform well at all 2023 Festivals. As we prepare for this holiday season there will be work being done behind the scenes to create revenue models around likely expenses involved in maintaining a facility. Then we will add other variable expenses, like labor, procurement/purchasing, marketing. Any model we choose to go forward with needs to make a profit – it can be a small percentage during the slowest times of the year, but it still has to be a profit. In every instance, we will create the most conservative revenue projections versus the worst case scenario for expenses. This is part of an under promise – over deliver philosophy I hold. If I plan for higher expenses and make better than expected revenue then we are in much better shape. The more expenses come in under budget, we are even more successful than planned. Smart padding of budgets to accommodate fluctuations is necessary.
Once we have a few models we know we can work with, we look to lock in a property. The nice thing about the current state of commercial real estate in Chicago is that there is plenty available and low demand. We have time to look and we can actually hold out for the right place at the right price.
After the paperwork is signed, we start the build out. The process of tailoring the space to meet our needs. This can get expensive and time consuming if not budgeted properly. And, you really can’t fine tune that budget until you have the space. Some spaces are nearly move in ready, maybe some cleaning and painting but generally the space is accommodating to our needs. Other spaces may need us to add a wall, or upgrade electrical and lighting. It is even possible we will have to put in flooring or more structural work. The mission will be to get in with the least amount of fuss to have a presentable and functional space. Over time, we can refine and improve the space to achieve our ideal image.
And that ideal image is…
If you have been to our booths at festivals, it would not be much different than that; simple pine shelving system. How it will differ is by having more sturdy system. Vertical pieces will be stained black and all shelves will be white washed to bring out a light cream tone – much like the JÖL labels. For added storage, we will look to have cabinets below some or all units. These will hold excess stock and possibly production supplies. If the space has enough room, a central seating area will be created. Someplace comfortable to sit while waiting for a custom item to be prepared or to have a consultation if needed. A cash wrap/checkout area will be designed to match the shelving and be situated in a location to be easily found and provide a sense of security to those shopping. Sadly, a reality is that there can also be shoplifters and petty thieves who may target us. An isolated production space will be created to ensure work can be done safely and free of potential contaminants. Hopefully we can provide a window to see us work. Items that don’t need to have such a space to be made, could be assembled out in the open. The idea is that we want to be transparent and share with you how we do it.
Overall, we want a peaceful subdued space that is not clinical or intensely bright. We are thinking more spa like than salon like.
Other things we can do in the space
Along with our own goods, we will build a variety of accessory goods curated from various suppliers. All intended to be simple, functional and affordable. They may not be very unique to us, but we will try to make them less commonly found elsewhere. Items like soap dishes, vanity organizers, wash cloths and towels as well as hair care tools. We will like to have a simple packaged natural snacks and drinks section. In time, we would be adverse to adding a drink bar or some kind of beverage counter. We may add complimentary water, coffee or tea; maybe a little bite of something sweet or savory. Prepared drinks or food will be further down the road.
There is interest in offering our store as a safe space for small community social groups to meet and hang out. It is hard for small social organizations to find places that are non threatening and comfortable for its members without it requiring food and drink purchases and carry other expenses that they may not be able to afford. We could work with any interested group to help meet their needs for such activities.
We want to be a part of the community we are in, not just serve it. As we grow into a space we wish to support local programs, help schools and people in need. It is important for us to be a good neighbor and uplift those around us. To encourage others to do better and do more; and not do it for the “good press” or tax write off.
Yes, very much so. But in all honesty, we feel it can happen. Not overnight and not entirely within our 1 year goal. It will take a lot of personal sacrifice to make it happen. It will become harder for me to travel and keep fully engaged with friends, family and social organizations I am a part of. I have to watch my spending closer than ever. More work will need to be put into our social media presence and into marketing. Currently we hardly spend any money on advertising. I will be giving up weekends of being lazy at home with my husband to set up shop in the middle of the street – rain or shine. Most of all, I will need to encouragement and best wishes from all my friends, family and our loyal followers. Without your support over the last 9 years there is no way I would even be able to even try this.
Once we are open for business, it will be a celebration of a lifetime for me. But I will not celebrate too hard as that energy will be needed to keep it all moving along. If all goes well, we can’t wait to say SHOP AT JÖL!
But wait, there’s more
As a means to tell this story as it happens, we will create a video companion series to share our story.