In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask 14 founders and executives three money-related questions: How much do you worry about your company’s finances? What are the top three areas of spending? How do you economize?
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Brie Wilde Founder and CEO, Eighth Aura I am always concerned with finances. As an indie brand, you have to make every single penny count. My top three areas of spending are product development, packaging and marketing. Product development is an area I’m not willing to sacrifice funds because I want to create the best products and believe in quality over quantity. But I have learned it’s more cost-effective right now to work on one product at a time.
For marketing and packaging, I enrolled myself in YouTube and Google, and learned how to do some graphics. I’ve found Canva really helpful in making Instagram Stories and posts for ads. So, I’m really only paying to run the ad. I taught myself Adobe Illustrator and Photoshop, and used it to create our packaging as well. Marketing and packaging collateral is very expensive. So, while I’m building the brand, it’s been very helpful doing everything myself.
- Mandi Nyambi CEO, Baalm
Every day. As a young brand, many of our decisions are tied to our financial model and financial growth. We spend our money on R&D for our platform. It is the core of our mission, business and our community, so we aren't afraid to invest in it. After that, we spend money on events and paying our team as fair a wage as possible.
We work to economize when it comes to our marketing spend. Advertising on social media isn't as cost-effective as it used to be, so we focus on marketing opportunities that give us more bang for our buck. Partnerships, both digital and in-person, are where we've seen our greatest success. We have a few major partnerships launching in the fall that will bring us more reach than we likely could have paid for. Earned media has been a big focus as well, and we've done this by fostering real relationships with people instead of just pitching blind.
- Chris Cabrera Founder, Naturally London
I worry often because of advice I received from very successful brands, which is you never want to get stagnant or too comfortable with success. My business is 100% self-funded, so I have learned from trial and error to make logical and strategic decisions.
I allocate our funds mainly to marketing, ingredient sourcing and events like trade shows, expos and marketplaces. My best tips for spending less are simplify everything while making strategic decisions, and selectivity is key to reducing our annual number of events and partnerships.
- Cherie Hoeger Co-Founder, Saalt
During the first few years of that startup grind all entrepreneurs go through, the profitability of the company was the constant driver in the background pushing you toward that goal. We feel lucky and grateful to have achieved profitability in just our second year since our official launch, and we've now shifted our focus beyond just increasing sales to also improving internal processes to drive efficiency and cut costs.
Our top three areas of spending are payroll for our amazing team members, marketing for our brand across many platforms, and of course, COGS. We've found that the best way to economize our spending is to educate our team members about the challenges we face as a company and encourage them to think like owners.
This mindset fosters creativity in marketing and resourcefulness in spending, which is especially important when it comes to responsibly allocating our impact budget to maximize opportunities to do good across the world. We love that our team members are prudent about how funds are spent in our charitable initiatives so we can make the most impact.
- Ione Rucker Co-Owner, Rucker Roots
Financials for our company is on our minds all of the time. We are a small company, and spending is a must when you are starting out. We spend the majority of our money on inventory balancing. Having just the right amount of inventory can make or break a small business.
Advertising and marketing would be the next big spend. Making sure you choose the right means of advertising is a must. Social media and on-air TV have been great for the growth of our company. We have spent lots of money in the past with sales team/consultants, but we found in the end that as owners we had to take control of the sale of our products.
Trade shows would be our next big expense. Unfortunately, there is no way around this one. You have to go to shows and be present among consumers and retail buyers to stay relevant and to present your new items.
- Yoel Vaisberg Founder and CEO, Haielle
Usually when I am awake, and sometimes also while sleeping. Top three areas of spending: Marketing. We’ve avoided working with agencies or consulting firms. We try to make most of the marketing efforts in-house.
Salaries. We are keeping a lean structure. I believe it’s important to prioritize the positions that will directly generate sales. We also reduce overhead by hiring freelancers for specific tasks that are not needed on a daily basis and don’t require a full-time employee.
Inventory. Ordering small initial batches even if this means incurring in a higher unit cost. It’s better to invest the capital in marketing or other relevant uses than having it sitting in a warehouse.
As founders of indie beauty brands, especially those in the early stages, we need to make the most of our limited resources. Usually, that means rolling up our sleeves, multitasking and being self-taught.
- Ranay Orton Owner, Glow by Daye
I try to stay organized and have a routine for looking at financials. I try and set my budgets and stick to them, and check on the overall health of my financials at the top of the month when I do my books. Thinking about the entire company's financials daily or weekly can be exhausting. I find that as long as you are checking in and adjusting in detail regularly, the day-to-day finances should take care of themselves.
Top three areas of spending are advertising/marketing, inventory and taxes. I assess all spending with simply asking the questions, "Is this expense moving the needle towards the overall financial goal I have in place?” If so, I look into how effective is it, and is it worth continuing in that same direction? If not, does it need more time to begin producing financial gain for the business, and how long should it take?
- Stephanie Schull CEO and Inventor, Kegelbell
As a lean startup and a first-time entrepreneur, money was not a worry when I was in the product development phase. There was too little of it to think about. So, really the dominant thought was, "How to do everything myself for free given I have never run a business before?"
The answer to that was finding smart people who have years of experience, take them out for coffee or a frugal meal, and learn all I could from them. Then, I acted on the advice they gave me. My expenses for a long time were mostly meals, legal fees and prototyping. Once I started selling physical product, then it got complex very fast and my back-of-the-envelope tracking was not cutting it.
I have financial data in Shopify, PayPal and Amazon, and I could not get QuickBooks to play nicely with those platforms. I started reaching out for bookkeeping services, but the price was too high or they were too busy to take on new customers.
A couple of months ago, I discovered a remote bookkeeping service called Bench. So far, I am happy with them as we go through the onboarding process. They have deep knowledge of those e-commerce sites I am using, and their software gives me an open messaging system with Bench.
The software is essentially a dashboard for me to have insight and reporting and a place for me to directly ask them questions. My Bench team does all the work. It feels like a concierge service and the price is right. With the dashboard, I can see what I am spending, which is mostly marketing with Facebook and Google ads, independent contractors and our cost of goods.
- Murphy D. Bishop II Co-Founder and CEO, The Better Skin Co.
We turned $25,000 into millions without taking on an investor. We look at finances twice weekly (Monday and Friday). Our top three areas of spend are brand marketing, retailer marketing and operations.
We have a brief meeting every morning, and we ask three questions about each initiative: Does it build the brand awareness? Does it build direct/retailer sales, or does it maximize operations to free up more time to brand build/sell? If it does not check off two of the boxes, we kill the initiative.
- Ada Polla CEO, Alchimie Forever
Our finances are always at the back of my mind. That’s how I stay on top of things! Our top three areas of spending are production (manufacturing), payroll and PR. We are very strategic in our investments, which means growing slowly and growing our expenses in a controlled manner.
We, of course, have an annual budget, and I am very strict about making budget. If unexpected, aka non-budgeted, opportunities come up that require spending money and, after analyzing, we decide it is worth the spend, we will find the money from a different budget line item and move things around accordingly.
- Kethlyn White CFO, Coil Beauty
As a small business and a new business—we just turned one year old—we are always aware and concerned about our finances. We budget and we try and stick to those budgets.
All the contracts we enter into, we always negotiate for a flat fee or we cap the number of hours a contractor works in order to stay within our budget. Most of our contractors are fine with working for a flat fee, so that's helpful when you are trying to stay within budget. Our top three areas of spending are inventory, graphic design, and PR and marketing.
- Michelle Shaffer Founder and CEO, TwinMedix
As a business owner, it is always important to manage the finances properly as it takes money to make money. Budgeting and accounting are an important factor in every business.
Our top three areas of spending are product ordering, payroll for employees and rent for our office/warehouse. Without those three things, we wouldn't have a running company. We order products as needed, so the products stay fresh when customers receive them as well helps us with economizing.
- TESS TAYLOR Founder, Taylor + Tess
I try my best to not allow worry and stress to loom over me too much throughout the day because it negatively impacts your decision-making and stifles creativity. Don’t get me wrong, there is at least one fire to put out each day, but I try my best to listen to my body and monitor my thoughts to stay productive and focused on problem-solving rather than problem-dwelling.
Instead, I spend most of my day coming up with creative solutions to build our community, expand our reach, improve our product offerings and increase sales. We are still in our infancy, so we have spent more money than we have made thus far, but I wake up excited each day to continue developing the company with my team.
Our three main areas of spending are product development and packaging, independent contractors, warehouse storage and distribution. We economize by spending a significant amount of time considering cost-effective, yet quality, alternatives for packaging and shipping materials. Our independent contractors, mainly designers, create brand assets that can easily and quickly be recycled for new work.
When it comes to labor, a CEO keeps their labor costs down by doing most of the work themselves, both clerical and manual work. I move boxes, pick up materials, fulfill orders, source packaging solutions, lead customer support, run our social media accounts and more, day after day.
I love Flowspace, our representative Eric Schneck, and our HFC Industries warehouse because they are constantly providing us with tips to save on shipping for inbound and outbound orders and educating us on ways to scale. Flowspace easily integrates with our Shopify and Amazon stores, handles our wholesale orders, and has over 600 warehouses across the company ready to scale our business. The dashboard is easy to navigate, and there is even a live chat feature that allows me to communicate directly with the warehouse.
A unique issue to those selling cosmetics containing CBD is credit card payment processing and website hosting. I recommend doing a gut check to see how badly you want to join the CBD cosmetics space before you begin developing your line because there are so many barriers to market for small businesses. We are passionate about and wholeheartedly believe in this plant, so we will keep rolling with the punches.
- JENNIE FRESA Founder and Owner, Copal Clean Beauty
To be perfectly honest, every day. We keep a monthly budget for inventory based on past sales, bestsellers and client requests. Our top three areas of spending are inventory, store supplies and employee salaries. You have to take care of the people that work for you.
If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, please send it to editor@beautyindependent.com.
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