The Snowball Effect: Black Friday Edition

Let me start this blog off by saying that Fancy Free Hair & Skin has been in business for 9 Black Friday's. I thought I finally had everything under control when I hired an Operations Manager in 2021 but Black Friday/Cyber Monday sales hit me like a ton of bricks in 2024. 

Just like those BET movies, I'm saying "You're probably wondering how I got here". LOL! Let me count the ways.

1. Downsizing
   I noticed a decrease in retail sales on my e-commerce platform in 2022. In 2023, one of my biggest private label clients had a sharp decrease in orders due to some internal challenges they were working through. Those challenges trickled into 2024 as well. But it wasn't just them, all businesses were experiencing a decrease in sales revenue. And while the Fancy Factory was able to supplement the 2023 decrease in revenue with grants, that was not the case in 2024. So, we downsized by laying off our operations manager and opted out of taking on any interns. 
2. Cash Flow
   In August of 2023, we adopted the "Profit First" model of managing our cash flow. Since revenues were down, this model allowed us to get a better handle on when we could splurge/invest in our business and when we needed to wait it out. I modified the method a little to make it easier for me to manage. Here's what I did:
   I created an income account where all of my income was deposited.
   I created an expense account where all of my expenses were paid. Since I use credit cards to pay for business expenses, I essentially only use the expense account for payroll, workers comp insurance and paying the credit card bills.
   I created a tax account. This account is used for payroll taxes, so I wouldn't think I had more cash available for expenses and then be looking stupid when it was time to pay those payroll taxes that accumulate monthly and quarterly.
   I created a profit account. On most months, I would look at the income and transfer about 1% of that to the profit account. This is for me. As the business owner. The goal is to eventually be able to take 30% profit. But for now, we have some debt to pay down, so 1% it is. Which doesn't seem like a lot but when you look at the account progress at the end of the year, you don't feel like it's all for naught.
   Having the income account and expense account separate, I was able to have a better picture of what I could really afford and what I couldn't.
3. Modified Ordering Raw Materials Practices
   Having a better understanding of our cash flow helped me see that I couldn't keep spending $1500-$2500 to re-stock raw materials in bulk because:
   I ain't have it.
   That bulk stuff was sitting too long and expiring because I wasn't manufacturing as many products as I had been.
   So, I dialed down the quantity of raw materials and packaging I was ordering based on what our cash flow dictated and what the actual needs of our manufacturing schedule had become.
   Which essentially meant that we began ordering stuff "as needed" instead of "to be prepared". This seemed like a good idea in order to keep us afloat while we navigated this economy and decrease in funding for small businesses.
4. Shift In Focus
   In August of 2024, we became a GMP certified facility for ISO 22716 and ICH Q7. This was no small feat. There are very few who understand what it really takes to obtain this certification and those that do, are bowing down to me for being able to get it done with a team of 4 (I brought on two medical laboratory scientists to assist with the quality assurance documents and testing) and 4 months to prepare. It actually took me 7 months because I failed the first inspection in June and was given 8 weeks to correct everything for a reinspection. 
   
   To do this, I didn't really work on anything else besides getting all the things I needed to get done on that FDA checklist. This included implementing a new manufacturing software that had all the checks and balances I needed for the certification which meant I had to figure out how this would change my workflows, what was the best way to incorporate new requirements into the workflows, write the procedures and then train staff. And I had to do this for EVERY product we manufacture and EVERY supporting process i.e. washing dishes, bringing in raw materials, quarantining products, etc. It was a lot, so when I finally got the certification in mid-August, I had to catch up on all the of the things I had not been doing since March but the process was slooooooooooooowwww "Like turtle". I was still behind in September would normally be preparing for the Fall/Winter product release and planning for Black Friday.
5. Distracted By Life
   The end of 2023 proved to be a very, VERY difficult season for my personal life. While I was pushing through in business, smiling and maintaining my physical personal care regimen, my mental in 2024 was all over the place. I wasn't sure if my foundation was going to be uprooted or solidified. My self-confidence was in the dirt. In retrospect, I am able to recognize that your personal life does, in fact, impact your business life. If you feel defeated in your personal life, that will be an underlying factor in how you handle your business. So, I can see that marketing was scarce and I lacked confidence in launching new products and services that I had been working on. I feel like I may have used the focus on working on the GMP certification as an excuse to push other projects to the back burner.
6. Increase In Private Label Orders
   We have increased the number of businesses we support with private label manufacturing by 30%. THEY all started preparing for Black Friday in October and were ordering their products so they could be ready for the sales. I didn't think anything of it because I could manufacture and ship directly to my customers, while they would have to wait for their order to be manufactured based on the queue and then shipped to them before they could fill orders. To add another obstacle, I spent 7 days traveling abroad for business right in the middle of November. In retrospect, the timing of that trip wreaked havoc on our manufacturing schedule, considering that manufacturing staff is not fully signed off on all of the update policies in procedures.

I said all of that to say, this particular chain of events created a perfect storm and also, I ain't have it. LOL! With consumer spending trending down, I wasn't sure what to manufacture to prepare for Black Friday sales and I didn't have the revenue to just prepare by manufacturing everything I thought I might need. If I had gone by past trends, I would've spent on supplies to manufacture an increase of 15% more deodorant but the Fancy Friends ordered 25% more 64 oz. Family Sized Shea buckets compared to 2023. So, what had happened was, as I filled orders and realized what products needed to be manufactured, I assessed the raw materials inventory and ordered. However, with larger companies starting their sales on November 1, 2024, my supplies got caught up in the holiday shipping rush, delaying delivery times by 2-3 days longer than the standard.

But praise God for having a good repour with my Fancy Friends and them being so understanding and patient. I communicated the delay as SOON as I realized that it was going to take longer than the standard 2-4 business days to fill some orders. We were able to get the last of the orders out by Wednesday, December 18, 2024. But, honey, it was STRESSFUL to look at that pending order list and still have 60 pending orders 2 weeks after the sale is not how we like to operate. 

Moving forward, I have beefed up our marketing and will be much more intentional about the obligations we take on in September, October and November. Ain't no way, I'm going into the 10th Fancy Free Hair & Skin Black Friday that way again. We're going into 2025 with a plan to win. Thrive in 2025 is the theme.

We appreciate your continued support and encouragement. It seems that every time I think I want to quit, someone sends me a note or says something to me that makes me want to keep going. I love you and I mean that.