Invoice 1.5 million being profitable | This is how we finance Minimalism

👋 Hello! At Minimalism we have always been transparent , including how we fund ourselves.

This month we have passed the 1.5 million turnover mark, in the 4 years that Minimalism has been around, being profitable without external investment and we are going to explain how.

We are aware that Minimalism is a small brand, that we still have a lot to do and that we continue working to make Minimalism a movement in which you can buy any basic item of your daily life, consciously manufactured at a fair price .

We hope it can help some company/brand/agency that is just starting out 😗

Before we talk about how, we think you need to keep in mind how our turnover has evolved year after year.

• 2018 turnover: 150K

• 2019 turnover: 210K

• 2020 turnover: 310K

• 2021 turnover: 700K

• Billing 2022 (until May): 155K

💸 Billing is not profit. Expenses to be deducted:

Purchase of raw materials and packaging, investment in marketing, team (salaries), logistics and warehouse, technology…

To give you an idea of ​​how much and where we spent, you can see all the data for 2021 here .

🫶 Grow profitably:

In recent weeks, everyone has been talking about growing profitably and not burning extra money. That was Minimalism's approach from the beginning. This type of business allows us to do just that.

🔥How we did it:

• We started with our own money, placed orders with suppliers and started attracting clients with our first sales of handbags. This blog helped us a lot to position the brand, then came the podcast.
• Walter (investor/partner in other projects we already had) joined Minimalism as a partner, which gave us a small amount of capital that we invested in launching new products (backpacks).
• Bank financing : We financed the launch of the clothing with a line of credit. If you are an e-commerce/brand/agency and you invoice every day, banks understand your business. Here you have two options: Line of credit (ideal for paying suppliers) or bank loan (to invest in technology, for example). For their part, banks charge you interest for lending you that money and you pay it back, in the case of loans, or draw on it in the case of the line of credit. The first line of credit had a personal guarantee from the founding partners. Then another one came with another bank without a personal guarantee.
• Team : We have hardly grown since we launched the project. We are 2 full-time people, 2 people as advisors, 1 part-time person in recruitment and 1 part-time person in customer service. Being few people means going slower than we would like, but, for the few of us, we do a lot of things. If we don't know how to do something, we hire freelancers who help us on a project-by-project basis.
• Seeking profitability : From our experience we knew that being profitable gave us options:
  • Bank financing: If you file the IS and are profitable, the banks give you access to capital at better interest rates than if you are not profitable.
  • Deferred payment to suppliers: Suppliers are more likely to take risks with profitable companies than with unprofitable companies. We work every day to have between 30 and 45 days of margin with payments.
  • Seeking private financing: Whether through crowdequity, a fund, or several Business Angels, we knew that we would be more attractive if we were profitable. Obviously, being profitable, among other things, makes the valuation go up.

Of these three options we have only used option 1 and 2 trying to meet the following point:

• Getting the wheel turning : THIS IS THE KEY POINT 👈👈

If we have credit lines with banks (financing the payment of supplier invoices) and 30-45 days of deferred payment to suppliers, the “only” thing we have to do is manage the orders we make to them very well.

If we are able to estimate sales and place orders every 2 months, we do not need to draw on the cash register, since we finance ourselves with suppliers and with the line of credit if necessary.

Being able to leave the box to make campaigns that we love like: “ Blank Canvas ”.

• New products : In this case we are taking risks. Every time we launch a new product, we have no data on its acceptance, stock times, sales, etc., so we buy the minimum that the supplier allows us, reducing our margin. And if it works, we invest more heavily, trying to follow the guidelines of the previous point.

And this is how, right now, we are funding Minimalism 🤗

With this post we do not want to tell anyone how they should finance their business. We are not the ones to say whether a business should be profitable, whether it should be financed with bank debt or with external investment . All we want to do is explain how at Minimalism we have opted for a model in which the numbers come out in green 👍 and not in red 👎

We are aware that we are just starting out, and we want the brand to grow into an “idea” that we have in mind where everyone can find everyday basics at fair prices.

It may take 8-10-12 years 👴🏻 Today we are just laying the foundations of what we want Minimalism to be. If tomorrow we have to look for private capital to grow, to open markets or to open stores, we hope to have the foundations of the brand strong so that the investors who accompany us understand what Minimalism is and what we want Minimalism to be.

Thank you for reading this post. If you think it might be interesting for someone who is launching something, please pass it on, we appreciate it.

Do you need corporate clothing for your company? Who better than Minimalism? Contact us here