Month: July 2011


Jul
2011

Battling An Expense Explosion

categories: Grow, Jason's Articles

Hi everyone,

We are working on an article for a coupon blogger site called Obsessive Coupon Disorder – and we thought we’d share it with you here…We hope you enjoy it. It’s more of our personal story than we’ve shared before. We hope it inspires you.

I’ve used coupons my entire married life – almost 17 years. It’s a Sunday morning ritual. But in 2008, we hit a financial crisis that coupons couldn’t rescue us from. I’ll spare you the details, but suffice it to say our fixed expenses shot up by almost $2,000 a month. To meet the challenge we looked at our budget and made some changes, but we knew we’d need at least $1,000 a month of new income if we were going to make it. My stay-at-home mom days seemed numbered.

My husband encouraged me to think long-term, and avoid doing dead-end jobs, or worse, taking a job that would require me to work long hours into the evenings and weekends. He proposed we take one of my skills, and build a home-based business around it. So with the goal of earning $1,000 a month, and a lot of prayer, we started two part-time businesses: Cinnamon Miles Photography and Liberty Jane Clothing.

Being a professional photographer wasn’t for me, so that was short-lived. But my talent for making doll clothes started to get people’s attention, and when combined with his enthusiasm for online selling, Liberty Jane Clothing took off. Our $1,000 a month goal was achieved.

Fast forward to 2011 and we have a thriving business, which will finish this year with revenues in the six figures. I’ve also become an official brand ambassador for Bernina, the world’s premiere sewing machine maker. And in many ways, we are just getting started.
Here are my 3 suggestions if you need to increase your income quickly:

First, embrace the desperation. I’m convinced that most people fail at money making ventures because they aren’t desperate enough. If failure is not an option, you probably won’t fail. Get hyper motivated to reach your first income goal.

Second, take your best skill, and brainstorm ways it could make you money. Try your best to develop a solid business concept associated with your passion or hobby. Become a student of business models.

Third, as they say, ‘find hungry people and feed them’. Don’t make a product and then try to convince people to buy it. That’s really hard. Instead, go to the sites where people are buying daily, look at what is selling well, improve upon it, and jump in. You’ll be a sensation. Sites to look at include EBay, Etsy, Craigslist, and Fiver.

Tell us your story – Have you had an expense explosion that required money making, not just money saving? Leave a comment and tell us about how you did it.

Cinnamon Miles

Liberty Jane Clothing


Jul
2011

Camera Upgrade Story…

categories: Grow, Jason's Articles, Photography

Hi everyone,

We got this great email from Robyn of Hadley’s Modern Doll Fashions (etsy) and here she is on EBay, and Facebook.

We thought we’d turn it into a little article to encourage you to consider upgrading your camera… Here is her story in her own words:

Hi, Cinnamon!

I bought a Sony Alpha 100 used on Ebay about 3 weeks ago. I paid $285, and a huge smart card (I think 8 GB) was included on the deal.

The deciding factor in going with the Sony was the reported ease of use for people not familiar with using a DSLR (which is 100% true) and also that you can use most older SLR Minolta lenses.

So after I bought the Sony, I bought an old 50 mm Minolta lens on Ebay for $59.

The difference in picture quality is shocking! I’m almost embarrassed to say what I had been using, which were a couple of Fuji FinePix point and shoot cameras. There’s really no comparison. It’s the difference between steak and hamburger. LOL. With the Fujis, I would go outside with the white tag boards for the best lighting, as I do now, and the pictures would turn out OK, but the new camera & Lens almost give the pictures a 3D quality.

My LJC experience has been so much fun and rewarding! I love the patterns, and really, everything having to do with selling on ebay. I’m remembering a lot of HTML I’ve forgotten, and now I’m getting hooked on photography. Oh, yeah, and my sewing skills have really improved too. LOL. Just the challenge of the sell is very exciting, and I’ve actually met a couple of fellow enthusiasts that I can talk shop with. I had hoped I might make a little extra fun money doing this, and this is happening, but I’m gaining skills that are way more valuable! So anyway, just wanted to tell you that because you really tapped into a creative outlet for a lot of people. This is way better than selling Avon. LOL.

Thanks again,

Robyn

Here is a picture showing before (left) and after (right):


Jul
2011

Prada Makes An Anchor, Say What?

categories: Jason's Articles, pricing, Sell

In Priceless: The Myth of Fair Value (and How to Take Advantage of It), author William Poundstone describes Prada’s business model for us. He says,

“Prada believes in engineering the context”

By engineering the context he means creating a context in which a $300 purse seems like a good deal. How do you do that? You set it next to a $2,400 purse. The $2,400 purse is the anchor, the $300 purse is the one they really wanted you to buy all along.

He goes on to say:

[Prada] paid over $1,700 per square foot for its Rem Koolhaas designed store in SoHo and is forking over equally stratospheric rents. It would not devote floor space to goods that hardly ever sell unless there was a reason for it. Trade-off contrast, (the system of setting a high priced item next to a low priced item), is part of the cost of doing business… It’s not unusual to find items similar to the high-priced anchor selling for a tenth as much. Anyone who can’t swing that can always try the $300 sunglasses. Or the $110 mobile phone charm.

What exactly is anchoring in the context of pricing? It was first described by two ‘behavior decision’ theorists named Amos Tversky and Daniel Kahneman. They described it like this:

“An initial value (the anchor) serves as a mental benchmark or starting point for estimating an unknown…” The unknown is the true value of an item.

Do you have an anchor? Can you create one? It might be a wise strategy.

 

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Jul
2011

The Power Of A Partner

categories: collaboration, Grow, Jason's Articles

We believe in the power of partnership!

Some people say business is all about crushing the competition, but we believe it is much more common that collaboration creates mutual success. In fact, if there is one foundational business principle we believe has helped us grow Liberty Jane Clothing, it’s the partnership between us as co-founders, (Jason + Cinnamon). Cinnamon brings the technical design skill, and Jason brings the marketing and sales skills. But it doesn’t stop there. We’ve become comfortable working with other people too. We view the business world as a place for lots of collaboration – and less often cut-throat competition. Other people see it differently. If you have a competition mentality, we’d encourage you to consider migrating to a more collaborative approach. We believe that in the long-run it will serve you better.

As I write, this, we are working with the following people to accomplish several specific things, including:

  • Shirley & her partners in India – Our wordpress consultant who has helped us build several of our websites. (this one and our patterns website).
  • The Tax Ladies of Auburn – our book-keepers.
  • Jess – our Social Media Consultant who is helping us with our social media marketing.
  • A dozen cool pattern partners.
  • Dawne – our amazing seamstress.
  • KitzyKK on Youtube – she does pattern tutorials for us.
  • Jeff, Ron & Chris – mentors to Jason on marketing and business issues.
  • Alice – our corporate contact at Bernina.
  • You! Over 300 partners who are working to build cool businesses using our patterns and resources.

Of course we want to be a great partner to you – but if you are trying to do everything alone, and you’re struggling, then we’d encourage you to seriously consider expanding your list of partners. We’re excited that you’ve taken the first step to partner with us – and we want to be the best partner we can be, but you probably need more than just us. There is a terrific saying from the Bible about the power of a partner…

“Two are better than one, because they have a good return for their labor. If either of them falls down, one can help the other up. But pity anyone who falls and has no one to help them up… Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken.”

There are several great reasons to partner:

  1. A good partner brings skills that you don’t have – and together you’re more complete
  2. A good partner brings energy that you might be lacking – and together you operate more intensely
  3. A good partner brings perspective that might challenge yours – and together you’re wiser
  4. A good partner brings enthusiasm – so that when you’re down – their encouragement will keep you going

Of course, partnering with people can have it’s down side too. Sometimes you partner with people who turn out to be less than trust-worthy. We’ve had that happen. We’ve had people try to get close to us just to learn enough about what we’re doing to go off on their own. That hurts. Maybe some of you are actually just reading everything on our partners site so you can figure out how to compete with us. That would be a bummer, but it’s not a sufficient reason for us to abandon our collaborative approach.

When considering partnerships, we’d suggest you keep these things in mind:

  1. Is the new partner trustworthy?
  2. Do you share the same (or at least similar) values and goals?
  3. Are you and the partner clear on the terms related to money involved? The worst partnerships are vague. The best are written clearly – even if just via email.
  4. Is there a ‘test period’ where you try out the arrangement and agree to end it if things aren’t working?
  5. Does the new partner bring a specific skill that adds value to the business?

You might be wondering how partnerships work formally – legally. The answer is – it depends. There are lots of ways to partner with people – from a simple vendor relationship where you’re buying a service from someone – to a formal business partner where you are in business together. We won’t go into the tax implications of these choices, but if you wonder, ask your CPA. Here are a few:

  1. You can pay people per ‘piece’.
  2. You can pay people a percentage of sales.
  3. You can split net revenue, (50/50 or at any agreed upon percentage).
  4. You can have people pay you to partner with you, (like you’re doing as a premium partner).
  5. You can have people give you products or services so that you’ll partner with them, (that’s our deal with Bernina).
  6. You can have people give you an affiliate commission for partnering with them, (that’s how we get money from Amazon).
  7. And I’m sure there are lots of other ways.

If there is any way we can be a better partner to you – let us know.

And tell us what you think of this post!

Jason & Cinnamon