What are small business owners and sole traders spending to make their businesses run smoothly week to week? In this article series, What I’m Spending, Kochie’s Business Builders walks in the shoes of unique business owners to find out their expenses, how they manage them, and what drives them each day.
Born out of her own battles with serious illness and how it was affecting her sleep, Melissa Van Kasteren launched Lujo Home in 2017 to help others sleep in greater comfort. The South Australian family-run business is an online retailer selling luxury mulberry silk and bamboo bedding.
My business is:
Lujo Home. We’re a luxury bedding company with a focus on health, and sell mainly mulberry silk and bamboo products.
The reason I chose silk is that I had a huge change in my own sleeping habits, hair and skin through using those products. I wanted to launch a specialist range focusing on quality, so I don’t design products to try and cheapen them — I want people to have a product that will last.
It’s my first real business, and it’s been phenomenal the way it has grown over the past four years. I find it’s actually got a mind of its own now, and customers tell me what they want.
I’ve designed the product range myself, and we cover anything from mulberry silk pillowcases to scrunchies, and quilts. Our bedding range is all hypoallergenic.
On an average week, my product expenses are:
My product expenses move depending on what my sales are for the week. Prior to COVID, my weekly product spend was around $10,000 to $15,000. Now, it’s reduced considerably. I’ve had to reduce my spending due to the fact that the sales are reduced.
My general overheads are:
I have huge overheads, especially with advertising. My general expenditure is around $5000 per month. Some costs are yearly, like barcodes, and then you have to account for boxes, packaging, website running costs, insurances, and product photography, which is quite expensive.
I spend about $500 to $1000 per week alone on packaging and couriers, especially since a lot of people expect free delivery so we have to factor that into our costs.
My staff headcount is:
Me, mostly! We’re a 100 per cent family-owned business, but my husband is a FIFO worker. When he’s home, he does a lot of the warehousing tasks like unpacking stock. We work from home and have a storage facility. I do the majority of the customer service and the packing, but I outsource certain things like socials and photography.
One thing most people don’t know about me is:
Most people don’t realise the person behind this business started it because she was incredibly unwell. I have an auto-immune disease called lupus, which is what led me to these products. I have to work around my health, and Lujo Home has allowed me to do that. It’s the first time I’ve been able to work for myself — or work at all. I basically built my own job.
The music that gets me going for the day is:
My coffee gets me going for the day! I love coffee. When my husband’s home and we’re in the warehouse moving and unpacking loads of boxes, then most definitely we’re going to put on electronic music.
3 tips for businesses about managing cash flow and expenses:
1. Keep thinking about ways to scale up. In these turbulent times, having strategies in place that can help you scale up or scale down so you don’t lose your business all together is important. It might slow down, but you can still scale back up when things get moving again. When you’re scaling, you’re ordering more product, turning your ads up and growing quite easily.
I’ve found hummpro incredibly useful for that. It was there for me when I needed a bit of a top up with a new line of products. Now I can use the credit card on a weekly basis for everyday expenditure, which helps me scale down the interest.
2. Do the opposite when things get tricky. Tighten up in certain areas to get through when advertising isn’t paying for itself, and learn to have the flexibility to scale down as needed.
3. Outsource your accounting. I have a very good accountant because I want to make sure it’s done properly. She also suggests ways I can change the business structure down the track. Financial help is essential, you’ve got to be on top of it, especially if, like me, it’s not your strong point.
The best part of my job is:
Customers! I’ve chosen quite a “feel-good” product. Having been quite unwell, I’ve realised that the little things in life can make a big difference. Having a nice pillow case, your hair stays nicer in the morning… small things like that tend to count.
Those little ways of helping people makes me feel amazing at the end of the day. It’s not just a business, it’s helping other people, which has been very important to me.
Thanks for sharing, Melissa.
Check out hummpro’s ‘business now, pay later’ offering to see how it can help you manage cashflow, with access to up to $30k, unsecured, and flexible repayment options.
To apply for a hummpro account, download the hummpro app from Google Play or the Apple App store, and follow the steps.
This content is brought to you by Kochie’s Business Builders in partnership with hummpro.
What I’m Spending: ‘I run 3 cleaning businesses and here are my expenses’
The information above is intended to be general in nature and is not personal financial product advice. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold). Pinstripe Media and hummpro are not liable for any loss incurred by use of or reliance on the information.
Feature image: Lujo Home.
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