AND DON’T FORGET…
I was really lucky here, as my sister is a chartered accountant. Obviously there are costs of paying an accountant for compliance (such as BAS and tax return preparation), but actual accounting help and advice is another must. One key thing we worked on together was product pricing – and making sure the pricing of my product also took into account tax expenses such as GST and putting aside money for income tax. It was also [key for] understanding the true cost of hiring staff and taking into account superannuation and workers’ compensation.
We advertise through Facebook and Instagram. The one tip I would give here is to always set a budget for your advertising spend so it doesn’t blow out. (Generally I use a percentage of sales as a rough guide in how much to spend on advertising.) Another trick is to set a spend limit within the Facebook ads manager itself, so that you don’t accidentally go over the anticipated spend.
This is a really big part of my business, and with each new product we introduce comes packaging design costs and packaging production costs. Juggling product packaging and cash flow is one thing I found difficult when I first started my business, as there are high minimum-order quantities for packaging. As a workaround I used non-branded packaging and applied branded stickers to my bath soaks (the first range in our product line). While applying stickers took additional time, it helped relieve cash flow pressure. As the business has grown, we’ve moved to all branded packaging.
This one is a huge direct cost for my business. For all purchases, we offer free shipping Australia-wide, and we offer a minimum spend for free shipping to the US and New Zealand. For Australian orders, we use Australia Post – both standard post and eParcel tracked shipping. The benefit we have found in using the Australia Post network is that they deliver anywhere within Australia and, if our customers are not home to collect their parcels, they leave them at the local post office. For international orders we use DHL. Overseas shipping is really expensive, however DHL offer an e-commerce solution that has fairly competitive rates.