How to Budget for Supply-Chain Issues in Your - Business Insider

Summary

Nicole Lewis, founder of Art 2 the Extreme Anna Powell Denton / Etsy

Welcome to "Founder Finances," a new Insider series discussing founders' monthly budgets.

Nicole Lewis, founder of Art 2 the Extreme Anna Powell Denton / Etsy

Welcome to "Founder Finances," a new Insider series discussing founders' monthly budgets.

In this story, the founder of a seasonal Etsy shop shares her $3,700 a month budget.

She says spending in June and July to prepare for her Q4 surge is vital to her business.

Nicole Lewis was an elementary-school art teacher on the hunt for new supplies, like fun-shaped crayons, when she realized the lack of variety in the marketplace.

That inspired her to create her own original crayons and start selling them on Etsy in 2007. Her business, Art 2 the Extreme, quickly turned from hobby to side-hustle to full-time career over the past 15 years. Today, the business sells customizable and personalized crayons on the platform.

Last year, Lewis booked more than $200,000 in revenue, documents Insider verified show. She accrued more than half of her revenue during the fourth quarter, making Art 2 the Extreme a seasonal business.

"Many of these costs during the slower months add up and keep summer profits down," she said in an email. Lewis added that her priority remains investing in the holiday-season exposure and growth year-round.

She shared her June budget and advice on how to allocate spending for a seasonal company.

Here's the budget breakdown

Hire for tasks that take away too much time or energy

Lewis spent $370 on independent contractors in June. She hires these workers to complete tasks — like peeling crayons and bagging the products — that she feels take too much time away from her other responsibilities as a solopreneur, such as marketing.

Lewis hires contracted employees to complete tasks when she can Anna Powell Denton / Etsy

If a founder feels overwhelmed by their to-do list, Lewis suggests considering what they can outsource by asking themselves questions like, "What's sucking up your time?" and, "What aspects of the business do you not like doing?"

"It's hard to give up that control," she added.

Lewis also hires photographers and videographers to help with photoshoots and other marketing tasks. Annually, Lewis spends about $2,000 on photography and videography.

Hiring out the tasks she either can't do or doesn't want to do helps Lewis streamline her own priorities and focus on what she's good at in the business.

Prepare for supply-chain issues ahead of time

Art 2 the Extreme customized crayons. Qiana K Photography

While Lewis is about to enter some of her slower months for business, she spent $210 on packaging in June.

"You need to put a budget aside to order your supplies ahead of time," she said of product materials, packaging, or other necessary items. Especially with persisting supply-chain issues, "boxes might not be in stock in the winter, you need to be ordering it in bulk now."

Occasionally, Lewis will spend up to $5,000 on an order of boxes, even if she doesn't have the disposable income at the time, because she knows it will benefit her in the long run.

"If I can't find those boxes come September, October, or November, that's going to pose a huge problem and disrupt my entire season," she said. "Even if I have to charge it now and just pay it off later, you have to plan ahead."

Build relationships to achieve low marketing spend

A post shared by Art 2 The Extreme®️- Nicole (@art2theextreme)

Etsy required Lewis to spend $634 on marketing — which goes to services like its gift guides, newsletters, and other pushes — in June. Aside from Etsy marketing, Lewis aims to create other strategic partnerships to keep her costs down.

For example, Lewis begins sending winter-holiday pitches to magazines in June. In the past, People.com, Us Weekly, Southern Living, Midwest Living, and Buzzfeed, among other publications, have featured Art 2 the Extreme. She said that third-party marketing has been life-changing for her business because it expands her audience beyond Etsy shoppers.

This year, Lewis has already locked down two major magazine-gift-guide promotions because she started pitching so far in advance, she said. Additionally, Lewis collaborates with social-media influencers by gifting them items they'll then post about.

"My strength is collaborations with other brands, makers, and businesses," she said. What's more, when pitching a marketing concept or custom design, she considers how she can help the other person and how the collaboration can move the needle for both of them.

How to Budget for Supply-Chain Issues in Your - Business Insider
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