In the spirit of The Positivity Project (launched by Are Media and Kellogg’s Special K), you can find guidance in their wisdom. - by Alley Pascoe
The Challenge: A cash flow crisis
The Solution: Olivia Carr, Founder at Shhh Silk
Last year, Olivia Carr, the founder of luxe sleepwear label Shhh Silk, posted something she never expected to on Instagram. In between product shots of perfectly styled pillowcases and endorsement videos from Kris Jenner, Carr shared a screenshot of her bank statement. The account had a balance of -$907. “For the first time since we launched in 2015, we had three consecutive days of zero sales at the start of the pandemic. Very quickly, we went into debit,” she reveals. “For five years I had reinvested all the money we made back into the business, so we didn’t have anything put aside for a rainy day. With our outstanding wholesale orders, I knew we could keep paying our staff for three weeks and then it was over. It was terrifying.”
In the face of almost-certain business closure and lay-offs for her eight staff, Carr responded with brutal honestly. She candidly shared her predicament on social media, asked her loyal customers for their support and reached out to her stockists for help. “I called our wholesale partners, The Iconic and Adore Beauty, and asked them for more orders. They weren’t easy calls to make, it was scary and vulnerable, but they kept us alive,” says Carr, who slowly began to climb out of the black hole of debt, thanks to her customers – and a new collection.
In May last year, Carr used her excess silk fabric to make facemasks just as they became mandatory in cities around the world. The move saved her business and allowed her to give back to her customers (with $50 gift vouchers and a month of competitions) and frontline workers (with a donation of $100,000 worth of product to the Australian College of Nursing). Instead of putting her profits back into the business, Carr put them into a savings account and paid herself a wage. “For the first time in the history of the brand, we have a positive cash flow, and our profits are up 700 per cent on the year before. I’ve learnt that in order to protect your business and your staff, you have to focus on profit instead of revenue. And you have to have money put away for a rainy day – or a pandemic,” explains Carr, who ultimately credits the Shhh Silk resurrection to the brand’s tagline: ‘Doing good is in our DNA’. “As a business, we’ve always helped others, and so when we needed help, our community came together and had our back.”
Link to article: https://www.marieclaire.com.au/how-three-businesses-tackle-challenges