ziel life

About

The Covid-19 pandemic caused widespread disruptions and challenges for people all over the world, including my girlfriend Nicole, who wasn’t able to continue working as a hair stylist. After some reflection, she decided to start an online business as she had some past success at local markets selling bath bombs and other self care products she created.

Starting a business is no easy feat. The more Nicole researched, the more overwhelmed she felt and was discouraged all of the other things she needed to do besides make cool new products.

Empathetic to this common plight of creators, I offered to help out where I thought best. Flash forward to the present day and I help with various day to day operations including: pricing for new products, ensure all packaging and labeling is compliant with government regulations, website development, inventory management, and more.

Overall it is a compelling story about turning a difficult situation into an opportunity for growth and success. It's also a long story to fully unpack here. Instead I'll share a short chapter from the start of the story about one of our first challenges scaling up.

Decompose

A common setback new businesses can run into a lack of financial discipline. You quickly find yourself struggling to stay afloat. It’s crucial for long term success to develop an understanding of the fundamentals like costs, revenue and cash flow.

That's why it's important have a solid understanding of their finances, including their costs, revenues, and cash flow. New businesses can set themselves up for long-term success by with discipline and keeping a close eye on their finances.

Product recipes were still being tweaked to perfection, making it difficult to keep track of the stock required make each products and often ended up over-ordering or under-ordering ingredients.

This led to more time driving back and forth to suppliers to restock or hefty delivery fees, stockouts, excess inventory, and lost sales.

Our break even analysis on different products showed that at best we were covering ingredient costs. In reality, we were experiencing a rapid decline into the negatives.

Formulate

After some tough conversations, we broke down these challenges into smaller questions to answer including:

• What tasks are involved in managing our inventory?
• How do we determine which products are selling well and which ones are not?
• How do we identify which ingredients need to be restocked?
• How often do we check inventory levels?
• When do we decide to restock a product?
• How do we prioritize which products to restock?
• How do we handle excess inventory?
• How can we reduce the risk of stockouts or overstocking?
• How do we balance the cost of inventory with the need to have enough product on hand?
• How do we assess the profitability of each product and making decisions about whether to continue carrying it?
• How do we communicate inventory needs and updates to each other?

Define

Once we had analyzed our current steps for tracking inventory, ordering, and purchases costs, we observed a disconnect in our Shopify sales and the process for ordering ingredients.

While we had insights to which products are popular, need to be restocked and their sales performance, this wasn’t integrated to our inventory data for raw ingredients needed to make new products. Additionally, ingredient inventory data was only being updated when making new orders.

Notion came up often in our research for business needs, so we decided to use it to streamline our inventory tracking, ordering, and purchase cost management processes. I set up a comprehensive inventory tracking system in Notion, which included organizing and categorizing products based on various criteria such as product type, supplier, and purchase cost.

Notion's flexibility allowed us to customize every detail to fit our specific needs and make it easy to surface this data in multiple places. I also integrated our Notion database with our Shopify storefront, as well as our ordering and purchasing systems from suppliers, to create a seamless workflow.

One of the major benefits of using Notion for inventory tracking was the ability to receive real-time updates on stock levels and purchase costs. This allowed us to manage inventory, ordering, and purchasing from a single platform, reducing the need for manual data entry and ensuring that everyone had access to the same information.

Running the experiments

We compared how our business performed during the busiest period of the year (Q4), with and without the new inventory system.

Verify the results

During the year we implemented our inventory system, we observed the following benefits:

• Reduced average time spent on manual data entry for updating inventory and purchasing ingredients by approximately 90 minutes each week.
• Reduced excess inventory by 23% by offering sales without any negative impact on profitability.
• Real-time updates on stock levels allowed us to meet higher demand, resulting in a 14% increase in total sales.
• Our break-even analysis showed that profitability was increasing for each product due to our improved understanding of purchase costs and cash flow.

Many people would advise against starting a business with a romantic partner, but I disagree. It has taught us valuable lessons about communication, how to support each other effectively, and keeps our minds sharp.