Starting a small business in a field in which you have little or no experience may sound unsound, but twin sisters Emily and Sarah Hamilton beg to differ.
The pair, whose combined backgrounds were in media and content management and digital marketing, were always eager to start a business together -- and they landed on the idea of creating a beauty box: Bellabox.
The concept, pioneered by US firm Birchbox, is simple: consumers pay a monthly fee to receive a box of beauty goodies -- samples and small volumes of products from a variety of brands. They can then purchase bigger quantities online if they like them. Brands either donate or sell their products to Bellabox to get them in the hands of eager consumers.
Great business idea, but there was just one hitch: neither Emily or Sarah knew anything about beauty. But Sarah Hamilton told The Huffington Post Australia that they weren’t too worried about that.
“We knew we definitely needed people in the team who knew the brands and could help us navigate this world, so it wasn’t necessary to have a background in beauty,” she said. “We saw it as a great business.
“One of the greatest parts of this concept is that it’s positioned at women everywhere. When I put a nice hand creme on or smell a beautiful candle -- these are beauty products. You don’t need a crazy makeup cabinet to love a beauty box.”
Sarah said the pair’s lack of industry insight actually helped, because they weren’t following the same rules -- especially around marketing -- that the rest of the industry was stuck on.
“We challenged the status quo of what marketing a beauty brand should entail,” she said. “A beauty box is so different to having a product in a goodie bag at a luncheon. And that was a good thing -- and still to this day the ideas that we come up with have got nothing to do with what beauty brands are doing to market themselves.”
At first it was tough to get brands on board -- no one really knew what to make of the concept.
“When we started, startups weren’t really valued -- they were almost seen as a silly risk,” Sarah said. “Brands would ask us point blank: ‘Why would I give you any product?’ We were definitely shocked by the knockbacks we got early on, but we just took it as a challenge.”
Fast forward 18 months after launch and Bellabox had 200 beauty brands on board, their first round of investment and a burgeoning subscriber base. And in 2014 Bellabox landed $6 million in investment from Allure Media.
Here Sarah imparts her top five tips for other small business owners to start and grow their operations.
1. Plan for it -- but don’t overdo it
Sarah says small business in Australia is over-regulated, so don’t put yourself off by spending months researching -- do the bare minimums for regulatory requirements.
“I felt like in Australia you almost need to have an accountant, a lawyer, a HR manager in order to start a business which I think is wrong,” she said. “Which is why I say don’t overdo it because if you spend too much time researching you would probably never start, but you’ve got to cover the basics.”
Sarah recommends contacting the small business department of your state or territory government to access information and free business support services and chat to other business owners for more advice.
2. Don’t be a commitment-phobe
Sarah says to be successful small business owner you need to take a risk and put yourself on the line.
“Nothing pushes you to succeed more than necessity,” she said. “I don’t believe in creating a business as a hobby.
“You can really tell those who will be successful in this venture or another one because they make a 100 percent commitment. Those who are too worried will never launch -- there is always something to be worried about.”
3. Challenge the status quo
Sarah says she and Emily learnt from experience to never be hemmed in by what others are doing in the beauty space, and advises to look to other industries for ideas on building your consumer base and audience.
“I like beauty but I am hopeless at it,” she said. “I don’t really understand how concealer works, for instance, but I love beautiful pictures, fashion and online shopping. So I think you should do something that you love and understand.
“I say to the team here, think about every online shopping experience you’ve had whether it’s from Coles or Shoes of Prey and then apply that to what we do and ask how we can improve. We looked at Apple, Amazon and some of the big players too.”
Bellabox recently adopted a similar customer service model to custom shoe designer Shoes of Prey, sending personalised emails at each step of the delivery service to Bellabox customers.
4. Constantly test your marketing channel
Sarah says even if something worked in the beginning -- like an online ad, a boosted Facebook post or radio commercial -- it should never be a given that it will always work.
“You can never take the first test as a forever result,” she said. “We’ve done everything -- regional TV, in-cinema advertising, print, radio, direct response channels such as EDMs, Facebook and YouTube advertising -- and everything has worked in its own way. But we are always about constantly testing.”
Sarah advises new startups to have a modest marketing budget and spread it around various channels -- putting your eggs in one basket won’t guarantee customers.
“If people are just hearing about you for the first time and then they see a TV ad and they only see it once because that’s all you can afford, you’re just not going to convert because people need to see your brand 5-7 time before they become a paying customer,” she said.
5. Be prepared to get a divorce
By this we mean don’t be 100 percent wedded to your plan: It’s OK to admit that your initial idea isn’t the best way forward. And you should never be afraid to evolve based on the advice and shopping patterns of your customers, said Sarah.
“When we first started we thought we only wanted high-end brands but really what we have seen with the Australian market is they want all the brands that are out there so we changed our point of view,” she said.