2022 Recap / 2023 Plans

[22s]

Not normally one for reflections as I'm usually go-go-go but first normal-ish year post-covid, political mayhem, cost of living crisis, runaway inflation... How did everyone do in 2022 and how is 2023 looking?

Very mixed bag for me.

Ecomm business
- Started in Aug 2021
- Fast growth, looks like we're just going to miss our 2022 target of £500k turnover which is annoying but shouldn't complain
- Had an amazing summer, zero covid China cause some big delays with a shipment which meant our bestsellers were out of stock for a month and competition ate us up
- Very dodgy December (reflective of last year) and now had two great days post-Christmas (also reflective of last year) which should hopefully continue into mid-Jan, although we're again out of stock on a best seller due to Royal Mail strike
- P&L: Profit between £3k and £8k a month between 2 of us
- Time commitment: 1 - 2 hours time a week (plus a lot of work setting it up initially).
- Initial investment: £25k each
- 2023: aiming to increase margin, get better at inventory mgmt and potential new product launch
Assessment: A-

Airbnb business
- Started in Aug 2022
- I hesitate to call this a 'business' really - I got very lucky with a flat I was managing for a friend essentially being passed to me to do whatever I want with it whilst they work out their tax situation before selling it
- Decided to short term let it - went through assessing 5 or 6 managing agents until I found a small outfit who seemed competent and luckily they've turned out to be very good
- Occupancy has been above 85% since Aug and had a couple of 20+ day stays (which I thought was nuts at £200+ per night but there we go!) and no real problems except for a dodgy plug socket for £100
- P&L: Profit between 3k and 5k a month for me only
-Time commitment: takes less than 1 hour a week. Took about 3 weeks of evenings to get everything set up to make it short term ready (including replacing the 5 year old toilet seat in a manky tenanted flat - won't be rushing to do that again )
- Initial investment: £2.5k for furnishings, crockey cutlery, etc
- 2023: Hoping to have got enough cash together to buy the flat off my friend
Assessment: A

Student accommodation
- Bought 2 x 3 beds and converted them into 5 bed HMOs in 2016 with 2 mates
- Two of us sold out this year to the third mate, approx 3x initial investment - looks like the timing was good just before rates etc started to bite
- Initial investment: £23k
- Time commitment: close to zero - one of the other partners managed all of the build, tenant find, and day-to-day it in exchange for a project and management fee
Assessment: exit A (lucky timing), overall execution B (definitely could have grown the business more/faster/systemised it to build a bigger, more valuable portfolio whilst money was cheap and I had more time)

Tech startup
- Launched beginning of 2022 as a fintech venture, raised circa £200k
- Rate rises + capital intensive business model + VC funding drought caused us to pivot 4 months in
- New proposition in the consumer lending space we pivoted to also didn't work so we're pivoting again to something entirely different
- Initial investment: £0k for me and my cofounder
- P&L: Currently burning £6 - 8k per month
- Time commitment: 60 - 70 hours a week + constant worrying!
- Finding this one very, very hard - massively outside of comfort zone, trying to find 'product-market fit' with something totally new (vs the other businesses which are just making something that exists slightly better) is challenging
- Been several strategic errors and some pretty poor decision-making on my part along with my cofounder, but we're learning from them and think we have a much bigger chance of success with our latest pivot (better founder-market fit, something less radical than the previous propositions)
- I've never felt more exhausted and tired and really needed this Christmas break to reset - I was irritable, making bad decisions, constantly tired - think it's closest to depressed I've ever been
- This year is make or break so the pressure is on
- 2023: achieve 'product-market fit', reach £1m annual recurring revenue (£85k per month) by end of 2023
Assessment: C- (we're still alive and keeping burn relatively low, but execution has been poor)

Would love to hear the good/bad/ugly from everyone else!

PS - Although I don't post a lot in the Business section, I've learnt a lot from the discussions in here so want to give a broad thank you for everyone who contributes regularly. Another goal for 2023 is to give more back to here!

Edited by 22s on Thursday 29th December 10:36

[lizardbrain]

Congrats! Sounds like a productive year.

Can you add staffing details for each business, if inclined?

[22s]

lizardbrain said:

Congrats! Sounds like a productive year.

Can you add staffing details for each business, if inclined?

Thanks - ups-and-downs! It's actually been nice writing it down - with the vast majority of my time and headspace being spent on the struggling business, it's been hard to see that some success is being had with the others.

Happy to share:

Ecomm - 0 employees, 2 x directors who both have other full-time positions. All day-to-day outsourced.
Airbnb - 0 employees. All day-to-day outsourced to mgmt company.
Student lets - 0 employees. All day-to-day was outsourced to business partner.
Startup - 2 employees - me + cofounder.

Try to keep all the operations as lean as possible which I think has helped us, especially with the startup. I know a lot of other founders who raised quite a bit at beginning of 2022, grew and then had to cut after a few months. Most extreme was from 2 cofounders to 8 employees, now down to one single founder in the space of about 6 months!

I've learned how to do a lot of stuff myself (e.g. building no-code websites, design work for product listings) and there are also some amazing freelancers out there (and some terrible ones, too!).

[lizardbrain]

I'm a little lost how you manage to process 500k ecomm revenue without headache.

Do you not have to manage the outsourcing? They do returns, accounting etc with no input or correction?

[22s]

Sorry, should have been clearer. Our only sales channel for ecomm is Amazon so they process everything on the end user fulfilment side.

Amazon accounting is relatively straightforward so we have an accountant who does that for us. There are very few transactions outside of the Amazon ecosystem (couple of SaaS products plus our inventory orders) so the book keeping is super easy.

The only work we need to do on a regular basis is:

- managing PPC advertising
- replenishing stock from the warehouse/3PL to the Amazon fulfilment centre
- ordering stock from China
- experimenting with pricing/vouchers etc

[jm8403]

This is extremely useful. I have always wanted to work for myself but stuck in a well paid corporate role. I also don't have massive amounts to risk (about 25k initially id be willing to spend), id like to try something whilst in a job, if possible and once the money matches, then leave. I know people disagree with this but to me, it's less risk. Especially as you have shown it can be done.

What was your background prior to starting? How much research did you do before kicking off the e commerce? I assume there are a lot of ways to make mistakes if not done correctly.

[22s]

jm8403 said:

This is extremely useful. I have always wanted to work for myself but stuck in a well paid corporate role. I also don't have massive amounts to risk (about 25k initially id be willing to spend), id like to try something whilst in a job, if possible and once the money matches, then leave. I know people disagree with this but to me, it's less risk. Especially as you have shown it can be done.

What was your background prior to starting? How much research did you do before kicking off the e commerce? I assume there are a lot of ways to make mistakes if not done correctly.

I would agree with your strategy and know a lot of people who have done what I have (jacked in a well-paying job and gone straight into a business from ground zero) and later regretted it. There is a lot to be said for the safety of a salary - it will help fund you (and the business) for the first few months, and if it all goes tits up then you have a job to fall back on. In my experience, if the project you're embarking on is not something very technical or time-consuming, you also don't need to jack in your job as there won't be enough stuff to do to keep you occupied at the beginning.

We all love the stories about someone who argues with their boss, tells them to fk off then builds a $100m business from their garage - but as with most stories they are (a) usually made up and (b) only interesting because they're unusual!

My background in various tech sales jobs and tried probably over a dozen small businesses before which all failed. In my opinion you really don't need much experience to do the Amazon stuff - just go on there and look at how terrible some of the listings are for high selling products. Awful photos, product descriptions that can barely be described as English, etc. My business partner worked at a company that acquired Amazon businesses which gave us the idea to do something in the first place, but to be honest 95% of it is common sense and the other 5% you can learn from things like The Serious Sellers Podcast. I also started my career in PPC advertising which meant I could spin up and optimise our ads very quickly which helped.

Product research is very important - we got lucky/did a lot of research to pick our product. A tool like JungleScout or Helium10 will help you and JS especially has a decent YouTube channel to help you get started and understand the process.

The biggest mistakes are probably around selecting the wrong suppliers / not being rigorous in your research.

I'm also happy to help if I can - feel free to send a PM.

[jm8403]

22s said:

I would agree with your strategy and know a lot of people who have done what I have (jacked in a well-paying job and gone straight into a business from ground zero) and later regretted it. There is a lot to be said for the safety of a salary - it will help fund you (and the business) for the first few months, and if it all goes tits up then you have a job to fall back on. In my experience, if the project you're embarking on is not something very technical or time-consuming, you also don't need to jack in your job as there won't be enough stuff to do to keep you occupied at the beginning.

We all love the stories about someone who argues with their boss, tells them to fk off then builds a $100m business from their garage - but as with most stories they are (a) usually made up and (b) only interesting because they're unusual!

My background in various tech sales jobs and tried probably over a dozen small businesses before which all failed. In my opinion you really don't need much experience to do the Amazon stuff - just go on there and look at how terrible some of the listings are for high selling products. Awful photos, product descriptions that can barely be described as English, etc. My business partner worked at a company that acquired Amazon businesses which gave us the idea to do something in the first place, but to be honest 95% of it is common sense and the other 5% you can learn from things like The Serious Sellers Podcast. I also started my career in PPC advertising which meant I could spin up and optimise our ads very quickly which helped.

Product research is very important - we got lucky/did a lot of research to pick our product. A tool like JungleScout or Helium10 will help you and JS especially has a decent YouTube channel to help you get started and understand the process.

The biggest mistakes are probably around selecting the wrong suppliers / not being rigorous in your research.

I'm also happy to help if I can - feel free to send a PM.

Thank you for the reply. Glad you agree on the salary. It is very difficult to get the sort of position I am in and has taken years of work to a) get into the company, b) get promoted a couple of times to this position. My job offers a good work life balance and even the ability to go to 80/90% pay for a reduction in hours, should I start to make some money.

I have been watching quite a lot of youtube videos but it is so difficult to find the good ones among the people selling their 'courses' which is ultimately, their 'business' which is more profitable it seems than doing the e commerce themselves!

A few friends have started businesses and the majority have a business partner. It seems two minds can be better than one if you are the right match.

I also have other bigger ideas, like you are doing , relating to start ups, but would require much more money than what cash I have. Which sounds like the stress you are going through. How was this process of getting investor money? From what I hear this is the most difficult part and it sounds like many never get it. I hope it works out for you.

Thanks for the offer of more help and the podcast name, ill check it out. I think its realistic I can a) increase my earnings or less chance )increase them enough to leave my job which is worth quite a lot with pension (much les chance. As for 100million in my bedroom, unlikely.