Emmanuel Eleyae: Welcome this is, we’re gonna be talking on the Eleyae Systems podcast, we’ve got Lulu here, founder and CEO of Lash Lab Pro. Phenomenal business, you’ve been through it Lulu and I’ll tell you and I’ll tell everyone listening, Lulu has been the most impressive person I have worked with in e-commerce because she has survived so many situations. She’ll tell you more about it and her story but I just wanna commend you Lulu for sticking in the game, staying true to yourself and staying motivated so i’ll just stop and let you introduce yourself.
Lulu Lange: Thank you so much. First of all, I wanna start by saying thank you for having me on here. It's, it's an honor. I'm a fan of yours. So, um, I've been, uh, listening to your podcast and watching you for a really long time and I think I actually reached out to you so you could start training cuz I wanted to learn from you so badly because, um, what you do is very impressive. So, and, uh, thank you so much for the compliment. Um, my name is Lulu. Uh, I am, I'm currently in Canada and you're in the States. I founded Lash Lab Professional over 10 years ago when I was still in university and I was working multiple jobs and just to support my family and to go through, get through university. I was in, uh, biotechnology at the faculty of Engineering McMaster University, and it was a full course load. It was, um, six courses every semester and it was pretty hard. Um, at that point in my life, I was very passionate about empowering women and being involved. I was involved in women in engineering and, um, I started Women of Enterprise, uh, where women get together to just support each other. And I just wanted more women to feel good, to feel confident. And um, as I said, I was working multiple jobs. I was surviving on like two or three hours of sleep every single night because I would work till 9:00 PM get home, uh, after driving half an hour, 45 minutes. And then I would have to do all my homework and assignments. I had multiple jobs. I lived in the middle and one job was 45 minutes to that way, and the other one was 45 minutes that way. So, if I didn't have makeup on, people would ask me like, are you sick? Are you okay? Are you tired? And I just hated that. Right? So, and I didn't have time to put on makeup, so I would get to the office, go to the washroom and try to put makeup on instead of trying to get things done. And it just took like an extra hour of my time. I saw, I ran into one of my friends and she had, I was like, is that mascara? Your lashes look so long. And that was more than 10 years ago. Lashes were not a thing. And she told me, you know, I got my lashes done. And I was just so fascinated because it just, you know, it just transformed her look. And, uh, I went and got it done and I loved the way it made me feel. It made me feel so confident. It made me feel so good about myself. I could just get up and be ready. Like I wouldn't have to put any makeup on or, it just transformed my look. And the most important thing to me was the confidence, right? I felt empowered, I looked good. I could do whatever, right? You mentally, you focus on the other stuff rather than getting up, looking in the mirror and saying, oh my God, look at my skin. I need to put makeup on, et cetera, et cetera. And I wanted to make more women feel like that. So I started doing it as a side hustle. I learned, uh, from Nicole. I'm still in touch with her and I love her so much. She taught me, she taught me for free. She didn't charge me anything. She did my lashes. And uh, at that point, I remember her adhesive was like a dot, and it was very stringy and she would put it on, um, saran wrap or aluminum foil in order to keep it liquidy. And it was just a disaster at that point. I thought at that point I'm like, I could apply what I learned because I was studying biotechnology. I thought I could, I saw a connection between what I'm studying and the industry and how I could better it. Because we were import, we were ordering things from China and it would take forever on eBay. Right? Remember eBay days, right? So I would order things on eBay. They would take forever to come, and they were very unreliable. Fast forward a couple of years, I was, uh, doing, I, I started this initiative where I would do lashes for chemotherapy survivors, uh, just to bring back, bring them back and make them feel good about themselves and a way to do it safely, right? Because there's a huge connection between, um, recovery from cancer and how you feel. It's more mental and emotional than physical because the chemotherapy usually most of the time does its job, but you have to want to get better. So that was a huge thing. Uh, and then I started developing products. So I used my background to formulate my own adhesives, and, uh, I invented a tweezer shape that it was revolutionary in the industry. And with that, that was a huge thing. But with it came a lot of challenges and a lot of learns because I, I put everything, I started with nothing, right? I was living paycheck to paycheck. Sometimes I would go in overdraft just to get through to my next paycheck. You know, I didn't have that investor, I didn't have, I didn't borrow money from anyone to set up my business or anything. I just took whatever money I made and I put it into my business. So, with that being said, when I made, when I created my tweezers, which was very challenging, putting all your money into it and, um, going back and forth with overseas, you know, in, uh, of, in the third world countries where there's a huge communication barrier. Right. And especially as a woman communicating with, like, it, it, it was a country, I'm not gonna say which country, it's, um, but, uh, they're very like, you know, they look at you as a woman when you're, you know, they don't take you seriously. Right. So that was, um, a big thing. But, um, one of the challenges and learns that I had is that if you created something, invest in a patent, right? Because you have to, you have to make sure that people know that this is your product. Copying in this industry is very common and it happens very fast, especially when someone else has the advantage of, um, having that seed money or having the financial support. Right. Or having an investor that is going to pay for them to do that. Right. And, um, having the money to pay for a marketing company and stuff like that.
Emmanuel: I was gonna ask you that is a, a huge struggle and a lot of people listening probably, I know myself, bootstrapping a business is scary. Cause this is your money you worked really hard to save it and now you’re just watching it burn. Like literally you’re buying inventory, you’re buying patents, you’re buying all this stuff. This is the, the big question, right is how do you stay confident through that period that this is going to be worth it?
Lulu: As an entrepreneur, you're always doubting yourself. Right. And I feel like we're our worst critic and that's, it's, it's a double edge sword because it pushes you to keep going. Right. And wanting to always do better, but it also is, it gets in your way, right? Because instead of thinking like, I'm not doing good enough, or is this gonna work. So, um, I think resiliency is a huge thing. And you know, it has to be innate in you that you don't give up, and I think you, you wanna want it bad, right? Like you have to want it bad. You wanna make something out of yourself, and it has to be something that feeds your soul and something that you're passionate about.
Emmanuel: Right. Do you wish, if you could go back, do you wish you had like an investor and a big pile of money?
Lulu: Um, see, that's the thing. I've talked to a lot of people because when that happened, when I had someone copy, like I gave them my product, and I think that's what hurt me more. It wasn't like someone just seeing my product and copying it. It was, I gave them my product to test, to review and promote. And, uh, they went around, copied it and told me like, I'm gonna start selling it for, and they sold it for $20 less, right? So when they sell some, obviously they don't value the product because they didn't put any work into it, barely any work into it. They just took it and sent it to someone and said, make me the same exact tweezer, right? So they were okay with selling it for $20 less. And um, they had an investor that gave them $50,000 to start. So $50,000 five years ago is huge. You could do a lot, you know, for, for this industry, you could do a lot with $50,000, you could do the marketing, you could get the product, you could get a lot of things going. And I think what hurt me and broke me the most was the fact that I gave her my product to test. The lesson that I've learned from that is non-competes and NDAs, you have to have agreements, you have to have systems, you have to have processes, all of those things. Like I cannot tell you or repeat how important systems are and processes in a business. So I feel like I, you know, I started working on my business and marketing was a huge thing for me. It's like promoting and marketing was the most important thing that I focused on, but you need to clean up behind the scene and you need to have the systems and processes in place first before doing the marketing and spending on marketing in order to protect you and your business.
Emmanuel: Yeah, you’re preaching to the choir here. I fully believe it that was the biggest thing we learned with, I thought it was all about marketing, I’m an ops guy, and I thought scaling a business is all about you need to have the right advertising strategy, the right marketing strategy but what, actually if the product sells it usually, the marketing is pretty easy, right, you just grab an agency and they can scale it. But then what happens is you start to break, y’know the operations, customer service gets backed up, your shipping gets backed up, you can’t manufacture, don’t have enough cash to buy inventory, all kinds of different things. But what are the systems you’d say are not the marketing and advertising but on the back end like you described it, what are those back end systems that you saw in your business that started to break?
Lulu: So lots, I wanna say everything, but, okay. Um, so during Covid, my, you know, as you know, in the lash industry like that, that was beauty services and aesthetics was one of the things that were shut down the longest during the pandemic, right? So I took that opportunity to rebrand. That's what I did first. I rebranded, and then I worked on marketing, marketing strategy and fixing my website. However, we grew, we blew up. Like, and, and before the pandemic, 2020 was gonna be the biggest year for me. So we started growing, I started seeing those sales. The first hit was packing orders. I didn't have the necessary help because I lost my employees when the pandemic hit. So that's number one. Number two was the inventory. Reordering, lead time, this, that, those things started having holes in them, right? Like how far in advance do I need to order the product in order not to run out and lose customers? Because in our industry they want it and they want it now because they just ran out of adhesive. And adhesive is such an important thing in the process that if they run out, they need to go and pick it up the same day cuz they have clients lined up, what are you gonna do? Are you gonna cancel your clients and lose on a thousand dollar day? Right? So for me, I didn't want them to go to someone else. So how do we prevent that from happening? Same thing with the tweezers. I got sold out of tweezers, I'm actually, or manufacturer problems, right? That was another huge thing. What systems do you have in place in order to guarantee quality with your manufacturer? Because I lost tens of thousands of dollars. My manufacturer started getting comfortable, stopped producing the same quality tweezers. So I would, and I would pay in advance and get horrible tweezers, and I would have to eat that. He would not replace them for me. So what systems do you have in place in order to protect the quality of the product that you receive and that you've worked your butt off to save money in order to order more, just to lose it.
Emmanuel: I like that one. If you’re listening to this and you have a product that you’re making, you’re dealing with a manufacturer and you want to protect yourself from those things right like losing tens of thousands of dollars cuz of quality control issues or them not paying it, how would you protect yourself now? How would you recommend someone protects themself?
Lulu: I would look at, see, when I took statistics in, um, in university, we looked at variables, right? Like, you have access. These are the variables that identify my product. Look at your product, like the cellphone. What are the things that I look at in my product that I need to identify that, that make it perform the way it performs, right? For the tweezer, it was, it weighed between this and this, right? So usually tweezers were this, they were like this, they called them boot tweezers. So what happened? And, and they were like beveled kind of so I straightened the base, I made it a 90 degree angle in order to be able to get close to the strip and pick up the lashes as, as close as possible. So you wouldn't lose any lashes, cuz you had to make kind of like bouquet fans. And, and that required a lot of work. So it's very precise. Right. And then the inside is very precise. The tweezer is fully, there's full closure at the base of the tweezer. The other tweezers would be open. Right? And it had the long base so you could pick up bigger fans. So these are identifiers, right? So how do you see, can you see how pointy it is?
Emmanuel: Yeah so you were for real innovating, yeah.
Lulu: Yes, yes, absolutely.
Emmanuel: This is true, like you completely designed something new. Nice.
Lulu: Yes. Because, so my husband is in construction, right? So he had the, this, this machine was like, it had two belts, right? So I would take old tweezers and I would use it to, to sharpen the tweezers to, you know, and show it to my manufacturer saying, this is how I want it. Right?
Emmanuel: This is what it looks like you were for real,
Lulu: Creating prototypes, yeah.
Emmanuel: Yeah, creating prototypes in your workshop back there. Creating things, that’s awesome.
Lulu: These are things that you need to make sure that identify, this is this, what makes your product, right. This is what, what, why people want your product. So to me, what I would do is that I would find someone over there that I can trust that can go and check the product before it gets shipped to me. Right.
Emmanuel: That’s powerful, yeah.
Lulu: Which in China you can find people like that that can do that, but in other parts of the world, you, you're unable to do that. You know, talking to my manufacturer, we built a close relationship. However, I, I, as I told you, like there's this woman versus dealing with woman versus a man like thing. It's, it's sexist, right? So, uh, he would just ignore me. Like when I tell him this is not the same quality, he made, he actually made me think that I was crazy up until recently. Up until recently I found an old tweezer from the first batches, and I put them side to side and I showed him like exactly the tension, the weight difference. I actually weighed the tweezer, right? And I showed him, he was like scamming me by taking off two to three grams on every tweezer, and that makes a difference. He's, he's like, okay. Literally this was his answer. I'm like, now I prove to you that, that those tweezers are different. He's like, okay, and he sent me a new batch that is exactly the quality of the initial tweezers. Right? But now we've, I've lost that trust, right. I don't know what happened there, but I think it had something to do with the pandemic, right. A lot of manufacturers tried to save money or lost people and stuff like that, so the quality got affected.
Emmanuel: And also there is something to be said of what you’re saying about being a woman in certain cultures it is different. Like I, I, you’re not the first person I've heard that from. I literally had some clients who would ask me to get on the phone with their manufacturer or to be the person emailing so that they would be treated with respect
Lulu: Do you know how many times I thought about hiring a male just to do all the talking, like specifically with countries, even in China, like I thought about hiring a Chinese, um, employee because when you speak the dialect, you get better rates on your product. And that's why I find in my industry, a lot of companies where, uh, the owner is of Asian descent, they're able to get product for a lot less. And 30, that 30 or 40% or even sometimes 50% difference makes a huge difference in your profit, in your profit margins, in your business growth, right?
Emmanuel: Cuz that drops straight to your bottom line, every sale.
Lulu: Exactly. And yeah, like you're able to grow your business. Like we're talking about 50% here. It's, it's crazy, right? It affects every aspect of your business, how much you're offering your product for, what your profit margins are, what your takeaway is, how much you pay yourself, all of it.
Emmanuel: And that’s so sad but that’s one of those things as entrepreneurs, right, we see a setback, we turn it in on opportunity right. So yes you’re being mistreated because of your gender but it gives me an idea what if you did hire someone like on upwork or something whose a translator and their sole job is literally to negotiate with manufacturers. That’d be an interesting tactic.
Lulu: That would be, I think, I even think that that is a huge opportunity as a job in, in the Chinese market. Do it. Like I'll hire you, right.
Emmanuel: Right, yeah, so if anybody is listening there’s a business opportunity right there.
Lulu: Hey, maybe I should start an agency where it's Chinese people that speak really good English that can communicate with people here, because I don't, I don't think there's many of those, at least we e-commerce people don't know about it, right?
Emmanuel: Right, and if they did that they’d be busy quick cuz there’s a lot of people who need help. We’re always on the phone with China trying to get, and to your point you can create a whole group of them, Vietnam, China, even Pakistan coming on the map now too. That’s a great idea.
Lulu: Absolutely. India. Pakistan, yeah. Yeah, yeah. Bangladesh is a huge, huge textile in Turkey too. So, yeah.
Emmanuel: Big time. Big time. That’s a good idea there.
Lulu: Those things I would not know unless I've been through them. But you beat yourself up, right? You beat yourself up and you look at yourself as a failure. But what you need to understand as a business owner, as an entrepreneur, you're doing everything yourself. You're learning everything yourself. And if you don't fail and you don't make mistakes, then you're never gonna know. If that manufacturer did not like try to scam me, then I wouldn't know what the specifications I need to look at at my product. I would not know, like when dealing with another manufacturer that I need to do my due diligence and have systems and processes in place. So now I'm starting another business, which is direct to consumer, because to me it's, it's tough being in B2B, especially when it comes to marketing and advertising and, uh, creating content in my field. So, uh, I'm starting, uh, direct to consumer and those are absolutely things I'm taking my sweet time with my manufacturers. I've been testing product for over a year and a half, and I still did not finalize. It’s that important to me and I'm taking the right steps to ensure that we have everything right, testing, from what variables I need to look at, to packaging.
Emmanuel: I definitely wanna dig into that especially because now you know what, you’ve learned the lessons, right. Like one thing I always I heard one of my mentors tell me is you never really fail in business he just this whole idea of a pivot. You just pivot, right. So the benefit is now you have all, you’ve learned all the lessons with the other business. There’s no such thing as failure just move on. So you didn’t fail you just learned and then you apply those lessons to this new business. So what other things, besides obviously the manufacturing and quality control, have you learned that will help you apply to this business?
Lulu: A huge thing is delegating, which is something I'm still struggling with, right. Hiring the right people. How to delegate and how to find the right talent. That's a huge thing because as business owners, it's, it's a control thing. Like, you've worked so hard on your baby, you don't wanna give away control. So how do you find the right person? What questions do you ask? Like if I hired someone right now, I need to hire someone because I'm always thinking there's so much to do. How do you identify what things you can let go of and give to them? Right? And how do you train them to do things the way you want it? Because at the end of the day, we'll hire someone and go like, they're not doing it the way I want. But have you showed them the way you want? I think I listened, that was a podcast, one of the Tim Ferris, it was about delegating. You need to put in a lot of work in order to save that time, but on in long term, on the long, in the long run. It saves you so much time. And time is money.
Emmanuel: And that’s one of those things that, it helps having run a business already. Cuz you now know what things you need. Cuz I feel like a lot of times we bring people on and that 300 hours turns into 600 hours if we’ve never delegated before or if we’re not good at it or turns into 800 hours or it turns into 1200 hours and we never see that ROI on time because we’re constantly trying to train them.
Lulu: In your experience, how do I do that, right?
Emmanuel: I always see two things when delegating that are a problem, that make it hard. The first one is we try and delegate things that we shouldn’t delegate right away. And what do I mean by that, it’s like, oh I’m struggling with Facebook ads, let me find someone to do my Facebook ads, or I’m struggling with email. Something that’s like really high level or has, the best way to describe it is, it’s not clear whether they specifically are doing a bad job or a good job, right. Like if I say to you, send me an email everyday, at the end of that day that email either was sent or it was not sent. It was a task, right.
Lulu: So you're looking for key performance indicators, but how do you identify what those key performance indicators are?
Emmanuel: Great, yes you’re absolutely looking for that specific person, you find them by looking at your tasks that you do everyday. You look at, the easiest way to describe it is a time audit. What do I do today. So today you’re on a podcast with me, probably can’t delegate that. But you’re probably had to check in with your manufacturer or you had to maybe check on some quickbooks stuff, some stuff that wasn’t really high thinking but it just needed to be done. It's like chores, right. These are just chores, anyone can do it. That’s the stuff I look for first and I just write it down as I go through the day and then I find someone to do those boring tasks first. Cuz what it does is it takes that time off my plate and it gives me the mental headspace so then I can just fill up more of my time with the higher level stuff like the Facebook ads, like the email. Added benefit is training is easy cuz I'm really good at it already. I've already done that job, right. If i'm not really good at facebook ads yet well if I hire someone to delegate, which is what we do a lot of times, we don’t know how to, we don't have a system in place for it yet, and we’re trying to delegate something we don't really know how to do and that persons gonna struggle too. We’re hoping that they’re just gonna be already an expert and bring that process in. That's fine but it's gonna be expensive to do that. So my thing is always let me find time to figure it out myself by hiring someone to do things that i’m already doing well and if I need to then guess what, training is less than 300 hours. Training is really quick and or i can just do a quick little loom video or something or record myself doing it and boom, they immediately are up and trained and ready to go.
Lulu: That's great because, um, you don't, especially, when I'm looking for talent, I go, and obviously you don't wanna hire the cheapest talent. You want someone that knows what they're doing, but you don't necessarily have the financial capability in your business to pay them for what they're asking for. And everyone starts somewhere. So to me, what are some of the qualities that you look for in a candidate? And what kind of questions do you ask?
Emmanuel: Like for me, I am a heavy fact finder. I think a lot. So normally I'm looking for people who are similar to me, right. And so I use what I call the KOLBE test. K-O-L-B-E. I take the KOLBE test and it showed that I'm a fact finder so I like that style cuz it shows how you work when you’re in the zone. And then I like to find other people who are similar to that and then mix and match the team. And then there’s also a test that shows how you work well with others. So the first thing is I want people who I don't have to babysit. So that’s my top criteria. So when I'm interviewing, how I interview for that is I do a lot of things where I just leave it wide open. You don't have to reach back out if you don't want to. You don't have to do that if you don't want to. And i keep dropping these little mini tests, right, to test for are they actually gonna pick up the ball and run with it, right. Are they going, if I give them a task do they jump on it right away are they excited about it. There's also the obvious, um, the example of putting something in your proposal, put a banana emoji in the response y’know, then you bury that at the bottom to make sure they read. But attention to detail, right. That's one of our core values. And making sure that they're willing to work hard that’s the way I test for it. And one, taking one step back, is actually having your values written down. At least five to ten. What are the core things you value and then literally finding a way to test for that. That's how I look at culture fit rather like will this person work well with me especially if they're gonna work well with me. If they're gonna work with one of my managers then I have them do the same thing and have them talk to that person in a way that they can see and feel if they're gonna work well with that person.
Lulu: Yeah. Yeah. So you touched a little bit on that by saying you test for it, right. And I think like, how much power do you give them, right? Because we said, you don't give them the, the entire task right away, right. You send the video to me, it's like, okay, you, you se let's say you record yourself doing the task, but I feel like a lot of the times I feel like I need the person to be with me right next to me. I don't know what it is with me or like maybe other entrepreneurs can relate. I feel like I could get things done faster or better if the person is right next to me versus the back and forth of emailing and DMing. You can't necessarily relay the information in the best manner
Emmanuel: Yeah. That’s definitely true and here’s the reason why that happens, at least from my experience what i've seen. It happens because of so much that is not said. Like most communication is not verbal, non-verbal, excuse me, right. And it's picked up through context or your facial expressions, your tone, a lot of that is missed via email. And also when we’re explaining things we can't, if we’re not right next to them, we can’t see if they're getting it, if they're yes, no, or they’re checked out, or if they are distracted or, so we miss a lot of that, that’s what's missing or explaining. So I do for me most of the teams we run it's all zoom but video, y’know, there's no phone calls as much, there’s no email, especially when they first start. Let’s get them on zoom and let's do it with them. The military we had what’s called right seat left seat ride, right. To teach someone how, it’s like teaching someone how to drive. You’re in the right seat and you’re showing them how to do it so I always love doing that first. Watch me do it, then you switch seats and they’re in the driver's seat. I’ll watch you do it. Then the third piece is now you go do it.
Lulu: I like that analogy. Yeah. I, I like that analogy because oftentimes it's like, okay, I'll record myself, but then I'll just give them the task. I won't watch them how to do it. The right seat, left seat thing.
Emmanuel: Might be a good way to change it.
Lulu: Yes, absolutely. Thank you for that.
Emmanuel: That also gives you like a, uh, a way to know if they’re ready, right. So you ask the question of, how do I earn trust? Well if you do it first then they watch you and ask questions, then they do it, then they do it with you watching, then they do it on their own and check in with you. That's three different basically training examples that they’ve been given. And now you can feel more comfortable and you can use that as like a, alright, stamped, they’re trained on that particular task now and you can give them more stuff. And another task thing I do a lot is I make reporting a big part of managing employees, right. So, everytime they’re done with something my expectation is I'm not gonna have to go to them and ask them did you finish this. Everyday, everyone, every team is sending reports to me.
Lulu: And I feel like that is another thing that I had to struggle with is that whenever I hired people, I would have to run after them, right. And they wouldn't get the tasks done on time, even though I gave them a deadline. Like, I need you to send me, especially with content creation and with content creation, it was like I was showing them the style, showing them exact examples of what I need, and they were just, I just felt like they were not getting it and it was always like, is it me or is it them?
Emmanuel: There’s two parts to that. So the first part on the checking in, I love the idea of checking in. So even on content, how many words did you write, right, how many posts did you finish. Like, there must be a proactive, you can even start them out if you really are like, I’m not trusting you, have them send a report every hour, every half day, y’know, like really frequently. The other piece to that is, cuz that builds trust, that makes you feel like, oh I don’t have to babysit them. I don’t have to go check on them. That’s really what bothers leaders is the doubt. Is this person I’m paying actually working, right. That’s really what bugs you.
Lulu: Yeah, and I think it also sets expectations of, this is what I expect from you, and I'm actually just because there are, like, when you ask for multiple reports a day or like multiple reports a week, it kind of sets the expectations that this is what I expect from you and I'm gonna keep you accountable. Do you agree with that? Like, do you have more chances of correcting errors if like, you know, they did not check in or did not send a report when they were supposed to?
Emmanuel: A hundred percent. Not just more chances but you get to see sooner, right. Because a lot of times people check in once a week, right, or they’re just, what a lot of people do is they hire someone and they expect them to do the job so they may not check in for two or three weeks. Well if that person was stuck,
Lulu: Guilty.
Emmanuel: Oh, so you’ve seen that right like now the person was stuck and then you show up two three weeks later is it done yet? Like how long, why is it taking so long and oh i had a question about that.
Lulu: Yeah. Why didn't you ask me then? But,
Emmanuel: Exactly.
Lulu: At the end of the meeting, oh, is it? Do you have any questions? Or if you have any questions, let me know. But then why did you wait like three weeks to ask me a question when I invited you to ask me a question whenever you need to.
Emmanuel: Oh, that used to happen to me all the time until I went away from that and people get annoyed with how much reporting I do and I don’t mind because of what you just described. Be mad at me for sending too many reports, I don't care. Guess what, I'm paying you for the time to make the report. It’s that important to me so that this doesn’t happen. I don’t wanna go two weeks with you stuck on something, right. So that is, to me, reports are huge. They’re way worth it because they’re worth avoiding that situation that you just described of y’know the problem waiting for two, three weeks. And then the second piece with content, it definitely is much tougher with content because it's a creative endeavor and so those ones I do, like, everything I talked about was more task based stuff whereas it’s either done or not done. There were five or there's not five kind of a thing. Creative I found i've had to adjust my process a bit. It is tougher. You gotta allow a lot more time and a lot more back and forth for every single piece of content. Which is so frustrating for me that's why i'm getting all this gray hair, right. Just like cuz we’re doing so much work for creative y’know. Like cuz it’s i’m used to the ops world where there’s just packages on a conveyor belt and off they go or some manufacturer line, assembly line, you can just see it’s being done or it’s not being done. But with creative it’s kinda like, ooh I don't know that font it’s just not juicy enough. What the hell does juicy mean? Juicy enough? It’s not like, urgh, y’know, I don’t know what you’re talking about.
Lulu: It's a spectrum. It's like a wide spectrum, right? Everyone has their own definition of it, so.
Emmanuel: It’s two things that have helped me with content, is as many examples as possible before creation, right. So this is storyboards, this is mockups, as close as we can get to the final draft first that's possible and then have like five or six different iterations. So i’ll tell people that first, like just go back, go make me five or six different variations. If they’re like frustrated because it’s too much work, well guess what, you’re not the type of person I need on my team. And this is a test I do, right, before I hire them, is hey I want you to give me a blog post 250 words, but I want five or six different ideas first, and then I want five or six different paragraphs or y’know just give me some pitches, give me some concepts, and then i'll choose from it. And then we’ll go back and forth.
Lulu: And do you pay them for that?
Emmanuel: I absolutely do, yeah. That is one thing I used to try and, yeah, a lot of people recommend like, give them a task up front, I pay people for that. I think it sets the right tone, right. To, because also if you're hiring someone on a contract basis I will invest up front to avoid the pain of a bad hire, right. It seems like it's expensive, let me interview three people and pay them all five hours each or ten hours each, y’know, at 15-20 bucks a pop for, to see which one will work out. Well that may come out to a couple hundred bucks but what if i’d hired that person full time, that’s one week of work, y’know, that i've avoided.
Lulu: You try to save money by going with someone. I'm telling you, I've had a lot of learns in this business, which like even in this situation, right? To me, I've always like, okay, like I could learn it myself or like I could do it myself, but hiring a mentor or working with an expert, a coach, you hear the stories and you hear the lessons that you know. It just, you have that information. It's like kind of downloading into your brain. So when something, a situation that is similar like that happens, you can avoid it. You know what to do. So it's better to invest upfront and hire the right talent and hire the right coach rather than dig yourself a deeper hole basically. Speaking of investments, when it comes to hiring talent, how do you allocate money towards that? Is there a certain percentage of your sales, or how, how do you do that? How do you go about it?
Emmanuel: For investing in like, coaching and training?
Lulu: In talent and also in coaching and training?
Emmanuel: Okay so talent-wise, for sure, I think 30% fixed costs, all in. So to me, when I think just, if you were like super high level, every single business, which obviously there, the answer, it depends for each one. But 30/30/30/10 right. So 30% on marketing, 30% no more than on like variable costs, and 30% on fixed costs, then that’s 90%, now you have 10% left over for profit, right. And if you use a profit first methodology which I like, is if I'm making a hundred thousand dollars a year, the first thing I do is I take that 10% and pull that out and try and keep that in the bank for me. That’s my profit every year so I wanna budget that first and then everything else I have to make money with the other 90.
Lulu: But you're paying yourself as a fixed cost in that 30% of fixed cost.
Emmanuel: Correct. Your own salary, yeah. So you have a salary especially if you’re in S Corp, you have a salary so you should be on payroll if you’re making money, right. Even if it’s just a little bit, give yourself something. And then also make sure you’re making profit.
Lulu: So S Corp, because you're using US terminology, right? So here we have, yeah. So in Canada we have a sole proprietorship partnership corporation. From my experience too is definitely register a corporation from the beginning. Don't do it as a sole proprietorship because you're putting a lot of liability on yourself as an individual, right? So if things were to, you know, something was to happen, you'd lose your house over it.
Emmanuel: Doing the full C Corp, there’s C Corp, S Corp, which are tax designations, then there’s the liability side of things which is LLC. So those are the two sides and we’re getting into some really nitty gritty stuff here, some high level stuff but that’s,
Lulu: It's the important stuff. Yep.
Emmanuel: It is important yeah these are the things no one tells you when you're just starting out you're like, ahh i'm just, y’know, i'll start a business but then you get sued and they take everything, right, or it’s a risk.
Lulu: Even here, I've used, so before I used to just register my business on my own, I spoke to a friend and they recommended this is in no way sponsored, but Incorporation Center. It's an agency, you pay 600 bucks, right? They send you your books, they register the corporation for you, they get your tax numbers, and they send you a file with everything that you need. You obviously have to pay for that folder, right? But you have all your bases covered. Because when I started, I didn't know that I needed an HST number. If you make sales more than $30,000 you're supposed to pay tax. You're supposed to charge for HST and GST here in Canada, which are two types of, uh, tax and I didn't do that. So who's liable for it? You, you have to pay it.
Emmanuel: That kind of stuff is so helpful because it’s the kind of thing you never think about and it’s never an issue until it’s an issue. And then when it’s an issue, it’s a really big issue and you wish you had done it in advance.
Lulu: Exactly. The other thing, when you're importing products, right, place an order with a manufacturer in China and they sent it to me and my product was stuck in customs for, you know, over two months because they needed my tax ID and I didn't have it for import and export. So you need your numbers, you need to know that stuff, and no one teaches you those things.
Emmanuel: Especially during like, pandemic time, and the worst is not just pandemic time, but at ports cuz they don't care. They’re charging you storage per day so y’know like if your stuff isn't right it’ll just sit. I've had that happen so many times where product just sits there, and we’re just sitting there waiting like, what the heck.
Lulu: Exactly
Emmanuel: Yeah so something like Incorporation Center that can help you get peace of mind, that’s powerful. Tailor Brands is another one that’s an online version. They may even work internationally, so there’s two options there. Just get all that done up front. Put it in a binder, set it somewhere.
Lulu: I believe, I believe incorporationcenter.ca is, uh, also international. They are able to register your business in the US as well. So as a Canadian, if I wanted to register my business in the States, they can take care of that for you.
Emmanuel: Awesome.
Lulu: I feel like the other part is, uh, how do you figure out which products sell the most? When it comes to inventory, order products in, some of them sell more frequently. When you have different SKUs, how do you identify which one is selling more and which ones you need to stock up on more versus waiting for them, the sell through rate versus waiting for them to like run out and then saying, okay, I have to order this one.
Emmanuel: Great question. Using a term called velocity or sell through, right, it’s simple, it’s a term but it's a simple thing, just look at how many am I selling per day on average, right. There's science and art to it. The science to this is just a calculation. I’m selling three hundred, there's thirty days in a month, I'm selling ten per day. Well now I have a metric I can use to calculate into the future. If I'm planning thirty days out well I'm pretty safe to say I'm probably gonna sell another three hundred. The art part to this is, alright if I sold ten a day well maybe that was Black Friday/Cyber Monday or maybe that was some kind of sale something or other, so instead of ten a day in the future, since I don't have that sale or Cyber Monday or those other things happening, maybe I should lower my projection. Or that last thirty days was not Cyber Monday but we do have Cyber Monday/Black Friday coming up so you can up your estimate. So, at its very core, just getting a sales per day metric for every single SKU, right. And that is the easiest, simplest way to think about it and then you project up into the future what that same time period using that velocity metric. People aren't buying it, liquidate it. Put it on discount, put it on deep discount, put it on deeper discount, get rid of it cuz the cash that's tied up in that inventory is more important than that actual inventory. Discontinue that line and buy the ones that are selling. The fastest way to make money in business is to simply sell the things people want. Y’know just because it's like, oh well I sell, like you're selling lashes, just because you wanna have the largest selection of lashes doesn't mean people wanna buy every single one, right. So if they're just buying the top two, then just constantly stay in stock of those top two and everything else can be just liquidated and get rid of it at some point. Maybe you have a little bit but we get too caught up in having way too much inventory. The only thing that happens during a recession, or uncertain economic environment, or interest rates, or inflation, or all this stuff people just tighten their purse strings, right. What we forget is we think, oh no ones gonna spend and woe is me with chicken little, this thing y’know, we get all scared and my business is gonna shut down. No that's not true, we just have to be more strategic and more precise about how we can convince people that they should spend that little money they're spending on us. That's the key, right. So we should be more open and more aggressive like, call customers, like one of the things in e-commerce we don't do enough, we don't just talk to people, y’know like especially a lot of us are introverts, I'm definitely an introvert and I like staying behind the computer in a contact form. If you wanna talk to me send me a contact form. There's no phone number. Best part is once you master it, again tie this back to the delegation conversation we had, you can teach someone else to do it and when someone else is doing it now you have the benefit of that system that you've implemented in your business without you having to spend your time and energy doing it. And guess what when you come out of the recession and out of that really hard period you still have that system. And so now people are more willing to buy, it's even easier, it’s more effective where during the recession time, you're closing one out of ten deals or calls, now, when we’re out and people are more willing to spend, you’re closing five out of ten, and so you just make even more and more money so. Thank you for coming and talking to me today.
Lulu: Thank you for having me on here. Yeah. Like, I love talking to you. You're always so knowledgeable. You have a wealth of information. Yeah. There are so many things to talk about and discuss when it comes to e-commerce and just being an entrepreneur, right?
Emmanuel: Yeah, I think this is definitely gonna be a part one, especially cuz the way you said about like coaches and being able to hear from other people’s stories and learnings so that you can avoid the same mistakes, right. And so I feel like that’s what we can share with each other and this is part one I think so we’ll probably do this again and a couple more.
Lulu: Absolutely
Emmanuel: Yeah and trade stories.
Lulu: Yes. Yes. I would love to, if, uh, we can help out other entrepreneurs learn from our learns, then uh, you know, I would, I would feel great about that. That would definitely like butter up my ego there. Make me feel good about myself.
Emmanuel: I love it. Well we definitely wanna do that we’ll get that ego sky high. Thanks Lulu
Lulu: Thank you
Emmanuel: Talk to you soon
Lulu: Okay, I'll talk to you later. Have a great day.
