045: Online sales growing 2-3% per WEEK currently after flipping sales from 90% wholesale to now 89% online. Leading ethical beauty brand turned a $500k investment to a loan. FTE from 1 to 9 to 2.5 and spend $50k a month on FB ads (Anna Ross)

Presented by Troy Trewin

Troy has worked intimately with 26 businesses in 20 years. He knows their numbers, understands their growing pains and people issues and has helped with most financial aspects, as well as having coached on leadership and management.

October 15, 2020

In this episode, I interview Anna Ross, the Founder, and CEO of Kester Black, an Australian-made, cruelty-free and vegan lipstick, and nail polish brand. She is also the Co-Founder and Creative Director of Arné Skincare. Anna started out with a small jewelry business in Melbourne in 2009 when she was just 19 years old. To increase her product range, she added nail polish which soon tripled revenue, so she dropped the jewelry to focus on starting a leading ethical beauty brand. Now with lipstick added to the range, and warehouses in Melbourne, Wanaka, New Zealand, and the Netherlands, they also sell through distributors in Germany and Malaysia.

Four years ago, sales were 10% online and 90% wholesale which has now been flipped to 89% online. The business tripled its revenues in the last three years, and in 2020 is growing 3% to 5% every week. She started with 1 full-time employee, peaked at 9 in 2017, and is now down to 2.5. She won the Telstra Business Woman of the Year and that went to her head so much that she added expensive overheads with an office and more team members before meditation woke her up. Anna testifies that she has had great Facebook ad success and is currently investing $50,000 a month, and shares a key contact to use at a Facebook agency. She describes a recession phenomenon called “The Lipstick Effect” which affects businesses in her industry.

She funded her business solely from profits though she recently walked away from a $500,000 investment, turning it into a short term loan instead. Anna felt she has succeeded when this year cash flow improved and she says that the hardest thing about growing a small business is staff.

She shares that the one thing she would tell herself on day one of starting out in business is, “Just do it. If I knew what I know now, I would never have done it” Stay tuned for more on Anna Ross’ amazing small business ownership journey.

This Cast Covers:

  • Being an Australian business located in the very beautiful Wanaka, New Zealand.
  • A leading ethical beauty brand that sells polish and lipstick globally.
  • Diversifying from wholesale brick and mortar to increase their online sales to about 89% of total sales.
  • The Lipstick Effect: How the sales of lipstick and nail polish skyrocket during an economic recession.
  • How they warehouse their products themselves and distribute them to retailers.
  • Their presence in 300 stores in Australia, Germany, and Switzerland with strong partnerships with great wholesalers.
  • Why she’s been careful all along in making sure that they own their intellectual properties themselves.
  • From working in retail to starting Kester Black as a jewelry business and diversifying into other products.
  • Growing exponentially by increasing its revenues by up to 915%.
  • How she got a big head from winning the Telstra Business Woman of the Year award.
  • The mistake she made by hiring more staff than she needed.
  • Tripling their revenues in the last three years and growing by about 3% to 5% every week.
  • Using Fulfill By Amazon and the numerous complexities that come with it.
  • Working towards hiring someone to run the day to day activities of the business or exiting.
  • How she has leveraged the power of Instagram and Facebook to sell more.
  • Starting the business with $50 and growing it purely from cash flow.
  • The lessons she learned from trying to get investor/Equity funding.
  • Doing their R&D cost-free through their manufacturers.
  • The stressful experience she went through when she found out that nail polish is classified as “Dangerous goods”, and cannot be shipped by post.
  • Keeping a close eye on the financials of the business to ensure long term growth.
  • The importance of being more of a manager to your team than the business owner.
  • Looking for people who actually wanna work in your business and can share in your vision.
  • How understanding herself and how people perceive her helped her grow personally and in business.
  • Using Shopify and Asana to help streamline their daily operations.

Additional Resources:

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Quotes: 

“Just because someone else says you’re really good at business, it doesn’t actually mean that you are” – Anna Ross

“Pay people for what they’re good at but don’t take business advice from them” – Anna Ross 

“Don’t try to please your staff” – Anna Ross

“Treating your staff really well doesn’t build good culture”  – Anna Ross

“The best and most valuable kind of mentorship is from peers” – Anna Ross

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Music from https://filmmusic.io “Cold Funk” by Kevin MacLeod (https://incompetech.com). License: CC BY (http://creativecommons.org/licenses/by/4.0/

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