#LBCWantsToKnow >> July 2018: Pricing

LuckyBreak-LBCWantsToKnow-Pricing

LuckyBreak-LBCWantsToKnow-Pricing

 

Each month, I ask my Instagram community to join me in a focused, crowd-sourced discussion of a specific subject.  For the month of July, we dove head-first into pricing… one of my favorite topics. Often worried about, but seldom discussed, I welcomed an opportunity to roll up my sleeves and see how I could help.

 

When was the last time you implemented a price increase? How did you roll it out? How was it received?

 

THE LUCKY BREAK COMMUNITY SAID…

 

lillabarnclothing: Ah! I need to do this now. I’m going to up prices by 10%. Rolling it out next week after my summer sale.

 

stellachroma: At my rebrand a year ago. Just did it. No one batted an eyelash. Granted, it was at a rebrand. 🙂

 

yukonsoaps: A year and half ago. I just did it. No questions asked! And sales increased!

 

cocosabon: I increased on two products last year. I informed my customers prior to the increase and explained why it was necessary. No problems at all. 👍🏼

 

MY THOUGHTS: I recommended that my clients carefully monitor their costs and review them at least once per annum. If a nominal (3-7%) price increase is needed, it’s better to roll those out once a year as opposed to “saving them up” for years and then hitting your buyers with a large jump in pricing every few years. Anything less than 10% is typically received well by buyers, provided that the rollout is properly framed. Price adjustments on the order of 10%+ require more of a brand re-positioning (connecting with a new audience) and are decidedly more complicated, but totally possible.

 

I find that the very subject of price increases unnerves many makers + product designers, but this doesn’t have to be an anxiety-inducing affair. There’s definitely an art to framing the announcement, but we’re usually far more worked up about it than our wholesale partners and retail customers. Need some help in this arena? My instantly-downloaded price increase workshop can build confidence and guide you through the process of designing an elegant announcement. And Price-O-Matic, my product pricing software, can help you keep an sharp eye on costs and profitability, too.

 

Do you feel like you’re currently charging what your products are worth? If not, what’s holding you back?

 

THE LUCKY BREAK COMMUNITY SAID: 

 

westcoastleslie: I’m not mostly because I feel like it will hold me back from making sales. And I know you’ll say “those people aren’t your customers” which is true to an extent. But tell me who is going to buy a $200 scarf?🤷🏻 Honestly, point me in their direction!

 

idigyourhair: No, but I want to. I feel unknown and feel I need to grow my brand in order to do that. I have made them slightly higher online.

 

normalish_: Nope. I don’t feel like I am because I’m stuck in this crazy Facebook bubble of small businesses that all feel like we can only charge so much. Even the customers in this bubble complain/dictate if your prices are higher than the average. I’m desperately trying to work my way outta there.

 

focsimama: I wasn’t but I will be once this new brand launches.

 

scentshomebodybaby: Agree with all these comments!! Just trying to charge enough for people to purchase to make my brand known. It’s so hard.

 

sasaloo.living: There is the never ending question!…. among others, lol.🤦🏻

 

MY THOUGHTS: Pricing is decidedly complex. It brings together many elements (brand presentation, audience awareness, consumer psychology, distribution strategy, tricky math… blech!) and we must take all of those elements together to create a narrative and a presentation that both taps our people and keeps food on our tables. That’s no simple task!

 

Finding the right people, crafting a capable narrative, and increasing your company’s ability to communicate value are all pillars of strong brand development. If you haven’t laid the critical foundation for your brand, then it’s virtually impossible to command the prices you want or need. I echo the sentiments above: we must break out of our bubbles by becoming aware of the larger competitive landscape and staying tethered to the players in that market. As to the $200 scarf question, I ask: Are there $200 scarves on the market? If so, there are $200 scarf people out there!

 

Not everyone can afford a $200 scarf, and not everyone who can afford it wants to spend that sum, but pricing runs along a spectrum. You could buy a new car for $12,000 (Smart cars) or a new car for $260,000 (hello, Ferrari!), and virtually every price point in between. The Ferrari peeps know their audience and they aren’t worried about the Smart car audience. It’s up to each of us to decide where on the pricing spectrum we want to play, and the key is to build value that’s commensurate with the price tag we attach to our work. You can’t sell a Smart car at Ferrari prices, but you can sell a Ferrari at Ferrari prices. And you’ll need to create a Ferrari-worthy experience for buyers at a premium price point.  Think: flashy showroom, attractive salespeople in elegant suits, champagne as you shop, etc.

 

We can all take the reigns on our pricing by doubling-down on our attempts to control costs and create efficiencies. In this case, every penny saved really is a penny earned. I’m often tasked with helping my clients develop more efficient production strategies, seek new suppliers, and offer a “bird’s eye” review of expenses to help trim things down. Once we’ve become as efficient as possible, then the work pivots to cultivating the customers we want, becoming more aware of the market, and sending the right signals to show that we’re creating premium products for a specialty audience.  It’s possible, I promise!

 

If you want to work on becoming more intimately aware of your audience, broadening your view of the marketplace, and upp’ing your brand presentation, then I invite you to explore Brick House Branding, my 9-week brand mentorship. Enrollment for the first live semester of 2019 opens on October 2, and the program is now available in an instantly-available “On Demand” version, too.

 

JOIN THE CONVERSATION

Be sure to stop by the Lucky Break Instagram, where every month we chat about all things business. I’d love to hear your thoughts and hope you’ll lend your voice. Search the #LBCWantstToKnow hashtag to weigh in! In August, we’re chatting all things website.

A Inside Peek at the Kiva Loan Process

A Inside Peek at the Kiva Loan Process with Print Therapy

Hi! Lela here. I recently passed my blog microphone to Shannon, Lucky Break’s Creative Director- and she generously gave you a peek behind her Hettie Joan brand launch. This week, I’m passing the mic to Melissa, Lucky Break’s Operations Manager a.k.a. “My Right Hand.” She’s a brilliant project manager and ball juggler here at Lucky Break, but she also has a pretty amazing stationery company as well.  I invite you to discover Print Therapy and then read on to learn how Melissa recently crowdfunded a $7,000 loan through Kiva to help her launch a new product collection.  

 

I’m a big Kiva fan… after all, who else invites entrepreneurs to borrow up to $10,000 to grow their business at ZERO interest, with ZERO fees, and without having your personal credit attached to the transaction? Kiva a reputable non-profit with a long track record of facilitating microloans to entrepreneurs around the world. And Melissa’s going to pull back the curtain and show you how it’s done. Take it away, M!

 

A Inside Peek at the Kiva Loan Process with Print Therapy

 

If there’s anything I’ve learned from being a part of the Lucky Break team, it’s that I’m not alone when it comes to my dreams being bigger than my wallet. The idea of starting a business can be intoxicating, but when you learn the dollar signs associated with that dream? That can be pretty darn sobering.

 

I spent the first three years of my business sort of floundering, trying new things, learning what worked, and learning what didn’t. Once I honed in on my niche (thanks, Brick House Branding!), and after a few brainstorming session (thanks, Lela!), I had a handful of ideas I knew I wanted to bring to market. The one thing I didn’t have? The money.

 

Although I had heard of Kiva before – in fact we lend through them as a part of Luck Break’s philanthropy efforts – I had never thought about attempting to raise a loan through them for my business. I mean who wants to fundraise? Who wants to raise money? Who wants to ask the people they know for help? I’ll tell you who. This business owner. And maybe you, too.

 

During one of my consultations with Lela, as we were discussing products and the financial state of my business (spoiler alert: I was out of money), she mentioned casually that she thought I could get a Kiva loan funded with relative ease. I’m not sure why, but I shrugged it off. I’m not the best at admitting that I need other people to help me, and asking people for money always feels a bit weird. But once I hung up the phone after our consultation, and the dreaming phase was over, and the get-to-work phase began, I realized that I needed to find money somewhere, and I needed to find a good amount of it, fast.

 

A Inside Peek at the Kiva Loan Process with Print Therapy

 

I’d like to tell you that I did my due diligence, studied Kiva and their stats, and took a few days to make my decision. In reality, I did a quick review of the site to understand their terms … and had my application started not even five minutes later. And about twenty-five days later, the money was comfortably in my account, ready to make those dreams a reality. Curious to know how it happened?

 

THE APPLICATION

 

1. The Application process was pretty straightforward, but it included creating everything you see on my lender page.  My story and my dream were just as important- if not more important- as statistical information about my business. Also important? A great photo that shows the people – and the heart – behind the business. The application is also where I indicated the amount I wanted to raise, and the number of months I wanted for my repayment terms.

 

Hint: You’re only allowed to have one Kiva loan active at a time, which means you cannot initiate a second loan while you’re repaying your first. Think wisely about how much money you’ll need – and don’t let fear talk you into a smaller number. First-time Kiva borrowers can tap up to $10,000.

 

2. About 24 hours later, I had a call scheduled with Kiva, and my application was approved (HOORAY!) on the call. We also discussed repayment terms, and, most importantly, what it would take to make my loan public. As it turns out, once you’re approved, your loan page doesn’t just go live on the Kiva site, for any and everyone to throw money at you.

 

3. My Kiva rep, Richard, informed me that I needed to have at least 22 people I’m personally connected to lend me $25 each within the first fifteen days in order for my loan to go public, and for any Kiva lender to be able to find it and lend to me. It’s important to Kiva to see that you’re committed to your own success and that the people who know you believe in you, too. If I didn’t hit that magical number of 22? My loan would effectively be canceled, never to see the light of day.

 

 

THE FUNDRAISING

 

1. As soon as my Kiva page was live, I wasted no time sharing it on social media – both through my business pages and through my personal page. I knew that I had 15 days to get 22 people to lend me their hard earned money, along with their belief and support. I shared daily on both Facebook and Instagram.

 

A Inside Peek at the Kiva Loan Process with Print Therapy

 

2. I then proceeded to stalk my lender page, and I’m pretty sure I wore out my mouse with all of the incessant refreshing. I was on pins and needles, nervous that I wouldn’t find 22 people who believed enough in me to lend me $25. In those moments, my lack of money was only matched by my lack of confidence. I. Was. Nervous.

 

3. As it turns out, people like to give their money to things and people they believe in. I had 50 people within my network – friends, family, old high school and college classmates, former co-workers – lend to me in the first two days, bringing in over 30% of the money I had to raise. I was on my way! My loan was now public on the Kiva page, available for all Kiva lenders to see.

 

4. 30% was great, but I knew the momentum would begin to slow down if I didn’t keep fanning the flame. I posted. I blogged. I newslettered. I posted again. I blogged again. I newslettered again. I talked about how the money would support my business. I talked about how the business would support my family. And I talked about how much their support would support me.

 

I harped on the fact that this was not a donation; my business dreams were not a charity case. I had every intention of paying every cent back. And the people who had already lent to me? I was able to send notes to them, letting them know how things were going, and sharing my gratitude with them. Every day I tracked how much money had come in, and what I had left to be fully funded. It was a great reminder to keep on talking.

 

A Inside Peek at the Kiva Loan Process with Print Therapy

 

5. On Day 20, I received a loan from “Tom”. It was my biggest loan by far, at $900. And it took me all the way to 100% of my goal. I had no idea who this Tom was until I received an email a day later from this mystery Tom, and his wife, Heidi. They were my high school classmates that I hadn’t talked to in 15 years, but they had been following along with my business on social media, waiting for the right moment to jump in to help. They found their moment. And it gave me my moment. I was funded.

 

6. In the end, 147 people lent their money to my campaign, most lending $25. I know less than half of them. I’m grateful for all of them (especially those of you who are reading this blog). That’s 147 people who said, through their wallets, “you can do this. I believe in you.” We all know money talks, but in this case, it really did.

 

THE FUNDING

 

1. Kiva is an all or nothing lender; if you don’t reach your goal 100%, you don’t receive any of the money. And when you reach your goal? You get every single penny. There is no fee associated with the distribution.

 

2. The money is distributed via PayPal, and it’s pretty instantaneous. One day the money isn’t there, and a few days after you’re fully funded… there it is!

 

3. This is a 0% interest loan, so what you borrow, you pay back. No more.

 

4. Kiva prefers an automatic repayment setup, where they withdraw the monthly repayment from your bank account each month. At each repayment, each lender gets a percentage of their loan paid back to them – usually a few dollars each month, depending on how much they loaned. Hint: When I was determining how much money I wanted to apply for, I built-in a cushion for a few additional months. I knew that it’d be hard to start making repayments while I was getting my new products ready to sell, so I allocated a portion of my funding to, well, re-funding my lenders.

 

5. After the funding is completed, it’s recommended that you continue to update your lenders with your progress, to let them know how you’re putting their dollars to work. Sure, they care about their money, but many of them care more about your success.

 

A Inside Peek at the Kiva Loan Process with Print Therapy

 

The beauty of the Kiva process is that you’re not getting approved by some guy at a bank who deems your credit or business savviness is worth investing in. You’re getting approved by normal, every day people who deem your dream, and your story, worthy. They deem you worthy. They believe in what you believe in, and what you’re trying to do.

 

So you believe in you, too. Put yourself out there. Tell everyone and anyone why you, and your dream, and your story, are worthy. And get that money, honey.
Hi, Lela again. *wink* How much do we love Melissa, eh? I’d love to hear about your Kiva experience… please pop a comment below and let me know if you’ve given Kiva a try- either as a borrower or a lender. And if you’ve discovered other creative ways to fund your business, then I’m “all ears” to hear about those, too!

 

YOU AREN’T TARGET: A BETTER WAY TO MANAGE BLACK FRIDAY/ CYBER MONDAY PROMOTIONS

BlackFriday-Cover

BlackFriday-Cover

 

I know, I know. It seems like the entire world is hosting sales of epic proportions for Black Friday and Cyber Monday. This is the season when the whole world loses its damn mind, slashing prices to the bone in an attempt to garner attention. While that may be a wise strategy for Best Buy and Target, it’s likely not a smart strategy for you, my friend.

 

IF YOU’RE NOT TARGET, THEN YOU NEEDN’T BEHAVE LIKE TARGET

 

Each year, I attach myself to the proverbial legs of my clients, pleading with them not cut off their nose to spite their face with sales. There is a better way to promote your brand this holiday season, and I’d be delighted to help you build a roadmap that creates a win-win for you and the customer. But before I do, let’s pull back and look at the “big picture” behind those generous holiday sales:

 

  • The kinds of products which are purchased at Target and Best Buy are likely mass-produced. If your creative process doesn’t look a whole lot like factories full of people, then your promotions probably shouldn’t look at whole lot like theirs either.

 

  • Department stores and huge chain stores sell commodities- things that can be exchanged one for another. Commodities are purchased based on two things: price (lowest cost) and availability (easiest to get your hands on). You- my friend- are a brand, which means we need to think like a brand rather than a commodity.

 

  • Target is banking on the fact that when you come in at 6am to snag that TV with the ultra-low price tag, you will also pick up a holiday onesie and some beauty products that aren’t on sale. So they lose some dollars on the TV, but they make up some ground with the other items. Many of the makers and product designers I know and love don’t have products to help them make up lost margins, so there’s no “win” in the massive BFCM sale.

 

  • Target and Best Buy offer 83,916 different products. Their goal in luring you through those doors in the pre-dawn hours is to capture as much of your holiday business as possible, so that you’ll keep coming back to them for diapers and sports bras and alarm clocks and school supplies all year long. But if you’re an artisan entrepreneur with a more focused product collection (please tell me that you have a deliciously focused product collection, yes?), then your peeps can’t come back and make 47 more purchases from you this year. So while the “big guys” can dangle the carrot, indie makers are serving up honey-glazed carrots alongside prime filet topped with blue cheese and accompanied by grilled asparagus and truffles…at 60% off. No. Thank. You.

 

I hope we can all agree that an indie brand doing a Black Friday/Cyber Monday sale and Best Buy hosting a holiday sale are two very different things. Apples and oranges, if you will. There’s no need to compete with chains who are transacting a billion dollars a year in business. We aren’t them.  They aren’t us.

 

Trying to apply their promotional model to our business is an unwise endeavor. I freely concede that the Giants of Retail have trained the American public to suckle at the teat of sales on this critical buying weekend. But how does a smart brand tackle that? Good question! I like where your brain is headed with this one…

 

Quotes_02B-10_FB092215

 

THE PROBLEM WITH TRADITIONAL SALES

 

I not-so-secretly loathe discounts and sales. When promoting a sale, you move the conversation away from value and place it squarely on price, and that’s not a wise direction in which to focus attention. It’s worth keeping in mind, too, that price-conscious shoppers don’t typically exhibit a great deal of brand loyalty. They’ll abandon ship once a new “cool kid” brand rolls onto the block or the moment a lower-priced option appears.

 

Even worse? Announcing a special promo code this week miffs all the customers who ordered last week. When I launched my first product-based brand, I hit this stumbling block with a vengeance! My customer service team found themselves fielding calls from disgruntled customers each time we launched a sale. So we implemented a new rule: If the customer had ordered up to three days before the sale announcement and they contacted us within 24 hours of the announcement, then we’d honor the promotion and offer a refund equivalent to the sale price. That worked well, until customers from days four and five called, miffed that customers from days one to three got the deal, but they didn’t. There’s no bottom and absolutely no way to win as the brand owner!

 

Running frequent promotions also trains customers to order only when there’s an opportunity to score a sweet deal. And once they’re spoiled, it’s virtually impossible to entice those customers to order anything at full-price.

 

A SMARTER WAY TO BLACK FRIDAY

 

You are officially invited to raise your right-hand and take the No Sales Pledge.

 

“I [insert your name here] do faithfully pledge to abstain from offering discounts. I say NO to percentages off. NO to flat-dollar discounts. NO to luring new subscribers to my email list with a coupon in exchange for their email address. In short, NO to crazy gimmicks that temporarily fatten my bank account while crippling my business in the long-term. I know my worth and I believe that there’s a better way.”

 

Can I get an “amen”?

 

But there’s still the Black Friday Cyber Monday buying frenzy and I want you to take advantage of that as much as possible. Accordingly- dear friend- here’s my list of 8 smart ways to capture the dollah dollah bills this holiday season. I hope you’ll try these strategies on for size…

 

YOU AREN'T TARGET: A BETTER WAY TO MANAGE BLACK FRIDAY/ CYBER MONDAY PROMOTIONS

 

 

1. FREE SHIPPING
Amazon has trained us to loathe shipping fees with an especially fiery passion. Make them disappear for orders which meet a minimum threshold and your customers will be happy campers. If you normally offer a “free shipping” promotion, try cutting the threshold in half for “limited time” holiday promotions.

 

2. EXPEDITED SHIPPING
I prefer to hold this offer back until the week before Christmas when half of the country is in a full-tilt panic about their still-long shopping list. Offering to upgrade their ground shipping to 2-day delivery will ease their anxiety without depleting their wallet and they’ll love you for it.

 

3. BUY THIS, GET THAT
Who doesn’t love “free?” Instead of deducting dollars from an order, why not throw in an additional product or a deluxe-sizes sample? This generous offer never fails to capture attention and it does two important things: a) prevents you from being seen as undercutting your wholesale stockists, and b) introduces new products to your current customers, increasing the chance of future purchases. Win-win!

 

4. COMPLIMENTARY GIFT WRAP + HANDWRITTEN NOTES
Raise your hand if you feel completely swamped during the holiday season. Did you see that sea of hands shoot up? We’re in good company! Take something off your customer’s “to do” list, and they’ll be tickled pink. Offering to elegantly giftwrap purchases and include a handwritten note saves your customer’s time and enables them to ship directly to the recipient, which also saves them dollars. Trust me: They won’t be mad about it.

 

5. BUY THIS AND WE’LL DONATE THAT TO A SPECIFIC CAUSE
Altruism is important all year-round, but it has a special place in the heart of Americans during the holiday season. Tying purchases to philanthropy can be an especially effective marketing technique that helps lift others up as you build your business. In fact, “Giving Tuesday” (the day following Cyber Monday) has become a national movement that gains more steam each year. Why not do some good as you generate some dollars?

 

6. BUY THIS AND RECEIVE SAMPLES OR PRODUCTS FROM OTHER BRANDS
Hello, collaboration opportunity! Partner with a complementary brand and swap products to be tucked into outbound orders. This strategy enables you to tap their audience to grow your customer base while unleashing a small tsunami of cross-promotion opportunities.

 

7. BUY ONE, GET ONE FREE
Have some soon-to-be-discontinued products? This is an ideal way to get them out of your workshop and into the hands of your fans. “Free” is everyone’s favorite 4-letter word and it’s a powerful lure to encourage purchases.

 

8. DOUBLE OR TRIPLE LOYALTY POINTS
If you offer a loyalty program that enables customers to earn points based on their purchases, then it’s fantastically easy to tinker with the technology to boost the point values during select time periods. Try offering double or triple reward points over the BFCM period to draw loyal shoppers to your site.

 

SmarterWaytoBlackFriday

 

In short: Add value, but never deduct collars. Slash-n-burn sales may win in the short term, but you’ll almost certainly lose in the long run. And I pinkie-swear that it’s quite possible to build a wildly successful product-based brand without tempting your customers through sales!

 

Pray tell… How do you plan to capture revenue this holiday season? I’d love to hear about your planned promotions. Drop a comment below and let me know!

 

 

A Sneak Peek Inside the Launch of Price-O-Matic

Price-O-Matic

Price-O-Matic

 

I never set out to design software.

 

Quite the contrary, my goal in launching Lucky Break was to share the wisdom I’d gleaned over the years as I crawled deep in the entrepreneurial trenches.  But I quickly realized that some of the systems I’d established for myself were desperately needed by others. So I began my software journey in earnest, with the hope that I could help creative entrepreneurs streamline and systematize their business.

 

Price-O-Matic was my very first software launch in 2013, and it was a labor of love between my husband and me. I was so stinking proud of it the day it launched and so pleased to hear that it was having a significant impact on my client’s businesses. We gave it an aesthetic makeover in 2014, and we fine-tuned some features while we were at it. But the system was always a bit buggy because of its dependence on Excel.

 

As I continued digging deeper into the pricing struggles of my makers and product designers, I started to envision new features that could shift their mindset. Meanwhile, Excel kept upgrading their system, often throwing Price-O-Matic into a hissy fit. And Lucky Break itself had undergone a pretty new rebrand, making it visually out of synch with the software. Taking all of those factors into consideration, I decided to bite the bullet and scrap the entire program to rebuild from the ground up. I must have had an especially good night’s sleep the night before I agreed to take on the project!

 

If you’ve ever wondered what it takes to design and launch software for the maker community, then I hope you enjoy this peek behind the curtain, walking you through the process of breathing life into the newly released Price-O-Matic. FAIR WARNING: Having vodka or dark chocolate nearby as you read will make this less painful…

 

At the Lucky Break team retreat that was held in Savannah, GA in October 2016, the team decided to rebuild POM from the ground up. That decision required that we commit a sizeable amount of resources (hours, energy, dollars) to the project and we began making plans to carve out the resources needed to make it happen.

 

In November, my husband (the creator of the original Price-O-Matic) and I developed a 52-page project scope, detailing how the old POM worked, along with high-level sketches of the new features we’d like to see included in the next evolution of the program.

 

We quickly engaged a prospective software team in a series of conversations about timelines, technical capabilities, and budget.

 

In December, I locked in the software team and slid a small mountain of money in their direction.

 

Shannon from Team Lucky Break spent the month of January designing wireframes for every webpage and pop-up, illustrating the page layouts and the placement of buttons, graphs, charts, and tables.

 

In February, the wireframes began to come to life as the software team undertook initial development on a top-secret testing site.

 

That same month, we hired a hand-lettering artist to begin work on new logo concepts. Shannon eventually took the raw handlettered elements and evolved them into a finished mark. She also designed the “skin” of the site, nailing down all the colors, fonts, and textures for the finished version.

 

The earliest incarnation of the new Price-O-Matic was passed back to Team Lucky Break in early March. My husband and I took round one of internal testing, creating 44 pages of detailed revisions that we slid back to the software development team.

 

They dove back in, cranking out Price-O-Matic 2.0. The Mister and I scrutinized every button, every calculation, and every graph, passing 51 more pages of revisions back to the development team.

 

Though I can’t formally confirm it, I’m pretty sure this is when the software development team unleashed a tsunami of swear words in my direction before plugging themselves into tequila IVs. My perfectionism is a blessing for our clients and sometimes a curse for my teammates. Cue tense phone call… we (thankfully) moved past it.

 

POMbythenumbers

 

My teammate Melissa began gathering a cohort of beta testers, comprised of both devoted POM users and new souls who were interested in putting the software through its paces before its public release. It was a careful and intentional mix of product categories and experience levels.

 

Price-O-Matic 3.0 was delivered to Team Lucky Break on April 2. More rounds of internal testing (the testing team expanded to include Lucky Break teammates Melissa and Eileen this time) netted just 15 pages of notes and revisions. At this point, our focus was on refining the user experience.

 

I spent a handsome chunk of April drafting text for all the help pop-ups. All totaled, there are 47 pages of pricing wisdom packed into those help screens.

 

Version 4.0 landed in our laps the second week of April. We tagged in the beta testing team and encouraged them to run through the software and report their findings. They rated the ease of use, recommended new features, and created snapshots of 3 fully built products. We’re eternally grateful for their willing hearts and eagle eyes, which helped us test-drive hundreds of scenarios across multiple browsers!

 

Once those screenshots made it back to us, we carefully hand-checked each calculation on every page to ensure that all the math was correct.

 

The software development team dove back in one more time, meticulously implementing dozens of adjustments to the program. And I can speak from experience here: They LOVE when you add changes in the eleventh hour to make the program easier to use. </sarcasm> We managed to sneak in a few last-minute features based on feedback from the beta testing team.

 

Team Lucky Break began designing the onboarding process. We needed a smart plan for migrating 1500+ current users to the new system. It requires some serious coordination to elegantly get all of that user data migrated over so that our current fans can hit the ground running.

 

Once the final incarnation of Price-O-Matic was finalized, development of the responsive version began, enabling POM to be accessed on tablets and smartphones.

 

The baton was passed back to me for development of the educational pieces. That included the creation of the library of video walk-throughs to help users quickly acclimate to the software. I built a meaty slide deck for the pricing workshop that accompanies the software, too.

 

I spent two days recording the pricing workshop and video tutorials before tagging in my (long-suffering) husband. Christopher spent an entire day editing and producing all of the videos to remove my ah’s and um’s and make me sound smarter and smoother than I am. Thank you, sugar!

 

With the software and educational pieces complete, we migrated all the goodness from the top-secret development site to the live Lucky Break Consulting site. How any of that happens is a mystery to me, but that’s why I have a software development team. *wink*

 

My teammates and I then worked together to create the new Price-O-Matic page at the Lucky Break website to share with the world all the awesome new goodness we have in store.

 

We launched the new Price-O-Matic on Tuesday, April 25. The launch was immediately followed by deep sighs of relief, champagne toasts, and long naps. And a good cry on my end… not the bad kind. More of the I-Felt-Like-Hercules-Trying-To-Get-Through-That-Project-And-I’m-So-Relieved-That-It’s-Over variety.

 

I’m so, so pleased with the final result and now that I’ve had a few nights of good sleep, I can absolutely affirm that every ounce of energy was worth it.

 

Capture

 

There are a mind-boggling number of new features, but I’m happy to share some of my favorites…
1. POM is now universally compatible, cloud-based, and accessible from anywhere on the planet that has an internet connection.

 

2. The new version works in 5 separate currencies:
• U.S. Dollars
• Canadian Dollars
• Australian Dollars
• British Pounds
• Euros

International users can now add GST + VAT, too.

 

3. I built a new REVERSE PRICING TOOL to help you pivot to a value-based pricing mindset, and then use that mindset to create a product development budget (it takes 3 clicks and less than 1 second!) that ensures that you’ll never again develop overpriced products that miss the mark.

 

4. The new REVENUE PROJECTION CALCULATOR enables you to see the revenue paths you’ll need to carve out to in order to make the kind of money you desire each month. Tell POM what your revenue targets are and the software will automatically calculate how many units of your highest-priced, lowest-priced, and average-priced products you’ll need to move to hit that benchmark.

 

5. There’s a whole suite of printer-friendly reports that show a profitability snapshot for each product, a cost analysis for each product, and a listing of inventory items for each product. Hooray!

 

6. A new feature on the PRICING STRATEGY page helps you understand how various promotions affect your ultimate profitability. Choose from: percentage off, buy one-get one, free shipping, or buy one-get one at x% off. The software will crunch all the numbers for you to ensure you don’t lose your tuckus.

 

7. Price-O-Matic is now instantly delivered (it’s ready within 60 seconds after purchase!) and a fancy new help desk system ensures that we can service tech issues quicker and more efficiently.

 

8. The software is 36 times prettier and 94 times easier to use. Yes, I counted!

 

If you’d love to take control of your numbers, increase your profits, and sleep better at night, may I humbly suggest that you check out the new Price-O-Matic?

 

If you’ve had a chance to see the new Price-O-Matic, then I hope you’ll leave a comment below to let me know what you think. I’m eager to hear it.

 

We do offer free upgrades for life, so all current users can upgrade to this new system. I’ll leave instructions for upgrading in the comments below. I made it quick and easy… promise!

 

Three Innovative Funding Sources for Creative Brands

Innovative Funding Sources for Creative Brands

Funding Options for Creative Brands

 

Raise your hand if you need dollah, dollah bills to invest in your business?

 

Yea, I thought so.

 

One of the advantages of engaging in daily conversations with makers + products designers is that I’m able to keep a finger firmly on the pulse of the daily struggles that we all face as creative entrepreneurs. If there’s one struggle that I hear more often than any other, it’s that we have a long to-do list of things we need: graphic design, product photography, professionally executed packaging, well-designed websites, trade show appearances, business classes, and more. And we typically have less cash in the bank than we need to tackle that to-do list. I feel you, friend.

 

For too long, securing funding for your business growth meant sitting through snooze-fest classes for drafting elaborate business plans, schmoozing with your local banker, laying your personal finances bare, and spending weeks-to-months jumping through hoops and praying for a loan. The times are a’changing, and I’m thrilled to say that those days are officially behind us. The maker revival and entrepreneurial renaissance have ushered in a variety of non-traditional funding options, and they’ve arrived none too soon.

 

Deciding to take on debt for your business is a deeply personal choice, and I’m keenly aware that there’s no one-size-fits-all solution. But the reality is that we can’t DIY everything about our brand while simultaneously steering its strategic path. While I’m certain that you look dashing in a leotard and red patent leather boots, you’re not Wonder Woman and neither am I. We’re not Jills-of-all-trades, and there are a finite number of hours in the day. Which means we need help. And that help usually has a price tag attached.

 

At some point, each of us will eventually need to hire staff, delegate specific tasks to the professionals, and invest in our business. Ideally, you have a trust fund from a wealthy grandmother or a cushy day job that’s enabled you to stockpile money for a few years as you transition to full-time entrepreneurship. Wait… no? Then we’ll just have to get a wee bit more creative. Here’s a quick snapshot of three innovative funding sources you can tag in to help grow your brand!

 

KIVA

 

You might be familiar with Kiva as the microlending agency that serves people in developing countries around the world. And while that’s the backstory of this non-profit organization, there’s been a significant evolution in Kiva’s model of which you might not be aware. Since 2005, Kiva has been on a mission to alleviate poverty through microloans. A farmer in Peru or a shopkeeper in Uganda could apply for a loan to improve their home, send a child to school, or grow their business. Their story is profiled on the Kiva site and peeps like you and I can each pitch in $25 until the loan is fully funded. Over time, the recipient pays the loan back, and the funders receive the initial amount without interest.

 

A few years ago, Kiva launched a separate crowdfunding program which is designed to support American entrepreneurs. Now businesses like yours and mine can apply to receive loans between $25-$10,000. The process begins with a simple online application which collects information about you, your business, and your plans for the moolah.

 

Once approved, Kiva asks you to make a loan of at least $25 to another entrepreneur. You then appeal to your own community (private fundraising), asking them to fund a portion of the loan, $25 at a time. You have 15 days to secure a certain percentage of the loan through your own channels. Once you’ve crossed that threshold, Kiva posts the loan on its larger platform (public fundraising), effectively opening it up worldwide to lenders. You then have 30 days on the public platform in which to raise the balance.

 

PROS
Kiva’s process often taken 30-60 days from initial application to eventual disbursement. But if you move quickly through that initial fundraising stage, then it’s often quicker than a traditional bank loan. And funds are typically available 48 hours after successfully funding the loan, so the cash is in your hot little hands pretty quickly.

 

Did I mention that the loans are at 0% interest? My hand to God’s… I would never deceive you! Interest-free loans are a thing of rare wonder and beauty, but Kiva Zip makes that happen. And there are no hidden fees. They leverage a network of millions of everyday lenders and corporate sponsors to offset program expenses. A $10,000 loan paid back over 36 months would carry a payment of just $278 a month… pretty damn reasonable.

 

The loans aren’t based on your personal credit history, and the debt doesn’t appear on your personal credit record. Kiva does use, however, publicly-available information about you and your business to verify your identity and determine creditworthiness.

 

CONS
You’re going to have to gather the chutzpah to ask people you know for money. There’s absolutely no shame in that game, but some people get squeamish about money chats. Heads up: as an entrepreneur, you have a lot of “money chats” ahead of you, so the sooner you can overcome this inner hurdle, the better off you’ll be. Thankfully, this is low-pressure asking: simply post on social media that you’re fundraising and link to your private page at Kiva. No need to arm wrestle your peeps into submission. And Kiva has a full suite of email template and helpful resources to help you fundraise more quickly and with ease.

 

Loans which aren’t fully funded within the time allocation are moot. Your backers won’t be charged, and you won’t be collecting a check, so it’s a wash in the end. Partial loan disbursements aren’t possible, so you’ll need to raise the full amount of your goal to enjoy any benefit from the loan.

 

You won’t qualify for a loan if you’re currently in foreclosure, bankruptcy, or the subject of any liens. While Kiva doesn’t check your personal credit record, those precarious situations are searchable through public records and Kiva can’t extend a loan to you if they apply.

 

EXAMPLES
There are handfuls of Lucky Break clients who have successfully raised between $5,000-10,000 through the Kiva Zip program, including Zandra Beauty, Todos Organics, Outlaw Soaps, and Etta + Billie.

 

Have more questions? Kiva has answers.

 

PAYPAL WORKING CAPITAL

 

PayPal has developed one of the most accessible funding platforms on the planet. Their “Working Capital” service was launched in 2013, providing lightning-fast small business loans with heaps of flexibility. Here’s how it works…

 

You complete a quick online application and PayPal makes a decision in 90-seconds-or-less. Your borrowing power is tied to the sales from your business which are routed through PayPal as a payment processor, so the lender has instant access to a snapshot of your company’s revenue history. An offer is made, and you can elect to tap all or a specific portion of the available loan amount. Fees are charged based on the speed at which you choose to repay the loan… the quicker you pay it back, the lower the fees.

 

For instance: Let’s say that your PayPal sales over the last 12 months totaled $150,000. You would easily qualify for a $20,000 loan. You could earmark 30% of your daily sales to loan repayment and pay just $1,221 over the life of the loan. If you choose to set aside 20% of your daily sales to loan payback, then fees jump to $1,907. A 10% daily payback rate jacks those fees up to $4,393. The total payback amount for that $20,000 loan would be between $21,221 and $24,393.

 

You can tap as much as 18% of the total amount of sales you’ve processed through PayPal over the last 12 months, to a maximum of $97,000. And payments are automatic, too. If you tell PayPal that you’ll pay the loan back at 10% and you make $150 in sales tomorrow, then PayPal will deduct 10% (or $15) as a loan payment. No sales tomorrow? That’s a $0 loan payment. Have a ridiculously good day with $1,000 in sales? $150 of that slides over to PayPal.

 

Assuming you made sales of $365,000 last year and you take the full $65,700 (18%) loan with a payback rate of 20% of your sales, then there would be an $8,857 fee associated with the loan. Assuming your sales were flat over the next twelve months (no growth), then that 20% payback rate works out to an approximate 13.48% annual interest rate. That’s more attractive than many credit cards, less attractive than some others. Swing by the PayPal Working Capital FAQ to get the 411 on their program.

 

PROS
Approvals are shockingly quick… by the time you can saunter into the kitchen for another cup of hot tea, the decision has been made, and a final answer is displayed on your screen. Funds are instantly available in your PayPal account and- at your request- they can transfer over to your bank account for full availability within 48 hours.

 

I appreciate that payments expand or shrink in correlation to sales. Suffering from the Summer Retail Draught? No worries… since your revenue is lower, your payments are, too. And because payments are automatic, the system is pretty seamless. Three cheers for having one less thing to think about during a busy week!

 

The loan doesn’t depend on (nor impact) your personal credit score. Many users appreciate the autonomy which surrounds this kind of lending.

 

CONS
You must be a PayPal Business or Premier member for at least three months to qualify. You also need to process at least $20,000 in sales annual (Premier account) or $15,000 annually (Business account). Anemic PayPal sales? You may qualify for several relatively comparable options (keep reading!).

 

You can only have one “loan” at a time. Borrowed $15k and now you need an additional $5 grand? You’ll need to pay that first $15k back before you can have another bite of the apple.
Is there such a thing as a borrowing process that’s too easy? If not, then PayPal has likely invented it. With loans this quick and painless, it’s easy to borrow impulsively without crunching the numbers and understanding how the setting aside of a fixed percentage of daily sales will impact your cash flow.

 

EXAMPLES
I know a good bit about this program because I’ve used it myself. Lucky Break took a $46,000 loan in June, and we’ve repaid $39,000 of that in just four months. As a user, I find the platform to be deliciously simple to understand and I appreciate that I can log in at any time for a clear explanation of current loan stats.

 

KICKSTARTER

 

Since its launch in 2009, Kickstarter has collected more than $2 billion (billion, with a b!) to fund 100,000 creative projects. The crowdfunding platform invites makers and product designers of all stripes to showcase products in development. Those projects are pitched to interested “backers” who might throw anywhere from $1-10,000 towards a single project. Brand owners create a rewards system in appreciation of the support. Those rewards range from simple social media shout-outs to early access to the products they’ve helped fund and innovative experiences reserved exclusively for backers.

 

PROS
Kickstarter is a public-facing platform, so it has the potential to spread news of your brand far and wide. This is easily the biggest benefit of the platform: the exposure brings with it significant opportunities. Campaigns sometimes go viral and are often featured in blogs, newspapers, and magazines. Unlock the secret to getting featured by Kickstarter staff, and you’re well on your way to not only raising dollars but growing an email list and attracting the attention of editors as well.

 

You can raise serious bank on Kickstarter if you play your cards right. I’ve seen campaigns raise as little as $2,500 and as much as many-hundreds-of-thousands-of-dollars.  It’s wise to think of Kickstarter along the lines of a pre-sales platform rather than a lending platform, but the amount you can raise is essentially limited only by time, your imagination, and your ability to produce all those rewards.

 

CONS
Kickstarter fundraising totals may look impressive, but the campaign totals can be deceiving. Kickstarter claims 5% of each pledge in fees, in addition to 3% and $.20 per pledge in credit card processing fees. So that’s an 8%+ haircut right off the top! You’ll also need to produce and ship those tangible rewards, and those costs add up quite quickly.

 

The platform is dense with projects and you’ll need to do lots of outreach to rally the troops. Prepare for a media blitz with proactive pitching to editors and plenty of messaging to your own community. Frequent newsletter reminders, social media blasts, and FB ads are typically needed to help projects gain traction. If you haven’t yet amassed a significant number of email subscribers or social media followers, then getting that project seen is likely an uphill battle.

 

You’ll need strong product imagery, a well-designed video, and solid storytelling chops to cut through the noise and capture attention. Many brands spend months putting together their campaigns and the best campaigns represent significant investments of strategic thought… and often dollars, too.

 

Kickstarter is an “all or nothing” platform. You’ll set a goal for the amount of money needed, and you’ll have a limited amount of time in which to raise those funds. Projects which aren’t fully funded by the deadline receive none of their pledged funding, so time is of the essence, and smart fundraising targets are a must.
Makers should be planning to either launch their brand on Kickstarter or significantly expand their current product offerings. Projects along the lines of “We need money for rent/ to hire someone/ to attend a conference” tend to go nowhere fast.

 

EXAMPLES
The projects which traditionally perform best on Kickstarter are tech gadgets, games, creative projects such as films, and problem-solving products like this multi-purpose cooler. My personal favorite Kickstart campaign of all time? Organic kid’s clothes from Lucky Break client The Smallest Tribe. Kathryn raised $10,575 in 2015!

 

NEED MORE FUNDING OPTIONS?

You’re spoilt for choice, my friend!

 

• Along the lines of PayPal’s Working Capital program, Square and Shopify have recently launched funding programs. Think: instant funding based on your sales history and automatic paybacks that flex with your gross revenue.

 

Kabbage is another option worth exploring. They provide quickly-dispersed lines of credit that range between $2,000-to $100,000. But beware: Fees range between 1.5%-12% per month, which is pretty rich for my blood!

 

Indiegogo is similar in nature to Kickstarter, with a similar pricing structure as well. The predominant difference is that Indiegogo isn’t all-or-nothing. If your campaign is at 72% of your fundraising goal on the day it expires, you still earn that 72%.

 

Have you found an innovative funding source for your business? Have a positive or negative experience to share about one of the funding source mentioned in this article? Please leave a comment and share your thoughts below… I’d love to hear them!