Friday, November 19, 2010

Turtlebug Goods and Profit

This is part of a series of blog posts concerning my business plan as well as my outlook on how I want to run Turtlebug Goods. Expect more of these up until - and beyond - the intended launch of the company! There is a relatively new theory in business planning and organization called the Triple bottom line - people, planet, and profit. This deals with profit.

Turtlebug Goods and Focus

The word 'profit' is used a lot in business, with it describing how successful a company is in general terms. It is not the only focus of Turtlebug Goods even though it plays a vital roll in the company's health, as the triple bottom line places equal pressure on people and planet on top of profit. Companies that are driven by all three tend to be more responsible socially as well as with natural resources, and both of these in turn naturally contribute to a positive bottom line. It is important to remember this, because in nature companies take a lot from a community in the way of resources as well as money paid for goods or services rendered. Part of this is an expectation that profits will be used accordingly to grow the community and the business.

Expected Sales and Profit

Fortunately, start up costs for Turtlebug Goods have been pretty low due to concise spending.. Comparatively speaking, fees and variable cost, such as ongoing ordering, will end up being much more expensive than our start up. As such, the profit margin is estimated to be at about 14%, or, $0.33 per card in profit at the forecasted price of $2.25 a card. The company will break even at the sale of 230 cards, or, in other terms, between 20-23 sets of cards sold. These numbers take into account all costs including sunk costs, materials cost, listing costs, and cost of labor. According to the government, by all means, my profit is also my income. This makes it necessary to clearly divide in my records what is profit and what is personal gain, so the division between profit and cost of labor is important for book keeping.

The greeting card and stationery market is seasonally dependent. Sales for Turtlebug Goods are forecasted to be highest in Fiscal Quarter 4, which includes October, November and December. This is because the stationery industry sees its biggest sales due to holiday cards as well as increased gift buying. The lowest Fiscal Quarter will be 1, which includes January, February and March, which traditionally has low sales in stationery and card sets (even though individual card sales for valentines day, etc. are still rather high). During these slower months, it is expected that Turtlebug Goods will take this opportunity to prepare designs for the busier quarters and to investigate new market opportunities.

Business Model

Turtlebug Goods has chosen to offer stationery, greeting cards, and other paper products in sets rather than individually. This is for a few reasons. First, printing off one card at a time is incredibly wasteful, especially if there is no directly present use for the remaining paper. It also wastes packaging, as each greeting card sold would need its own shipping envelope. On top of this, it can end up being more expensive for the customer. Currently, shipping costs in total are about $3.00. This includes proof of drop off and shipping. As such, the first ounce shipped is the most expensive, as regardless of size or weight the proof of drop off will always remain the same price. If we shipped one card at a time, it would literally double the price of a card, and that is not sustainable. However, customers can request custom packages at any time, and if it is feasible - that is, it does not violate Turtlebug Goods' triple bottom line - and in this case, smaller batches of cards will be made available per request.

Value is added to the product in a few ways. First off, all except font designs are handmade by me, with no guides or third party sources. Fonts are by Typodermic Fonts by Ray Larabie, and are licensed for proper use. Otherwise, designs are personally created and offered exclusively, with many patterns going into planned retirement on a regular basis to be replaced by new and fresh designs. Value is also added by the personal aspect of handmade products. Where it may be hard to get a custom made item from a larger corporation - especially if it involves making an entirely new design. On top of this, customers can be in more direct contact with me via Facebook, Twitter, or Etsy's modes of conversation.

Evolving Principles

Typically, as profits increase in a company, it is reinvested to help grow the company. Turtlebug Goods is no exception to this. The reason I and others like me go into business is to grow within the community. As such, there are evolving principles that Turtlebug Goods follows.
  • Support initiatives found in other pieces of the triple bottom line as it becomes possible.
  • Reinvest and explore new markets to break into, both in Paper Goods and otherwise.
  • Increase margins and become stable in the long term.

Expect me to wrap up my triple bottom line in an upcoming blog post! Don't forget that the launch party is tomorrow, and everyone is invited!

No comments:

Post a Comment