Invoice 1.5 million being profitable | This is how we finance Minimalism
hello! At Minimalism we have always been transparent , also in how we finance ourselves.
This month we have passed the 1.5 million turnover, in the 4 years that Minimalism has, being profitable without external investment and we are going to explain how.
We are aware that Minimalism is a small brand, that we have everything to do and that we continue working to make Minimalism a movement in which you can buy any basic of your day-to-day consciously manufactured at a fair price .
We hope you can help some company / brand / agency that is starting 😗
Before talking about how, we believe that it is necessary for you to keep in mind how our billing has evolved year after year.
Turnover 2018: 150K
Turnover 2019: 210K
Turnover 2020: 310K
Turnover 2021: 700K
Billing 2022 (until May): 155K
💸 Billing is not benefit. Expenses to be deducted:
Purchase of raw materials and packaging, investment in marketing, equipment (salaries), logistics and warehouse, technology...
To get an idea of how much and where we spend, you can see all the data for 2021 here .
In recent weeks, everyone has been talking about growing while being profitable and not burning too much money, that was Minimalism's approach from the beginning, this type of business allows us to do it.
🔥 How we did it:
- We started with our money, we placed orders with suppliers and we started attracting customers with our first bag sales. This blog helped us a lot to position the brand, then came the podcast.
- Entry of Walter (investor/partner in other projects that we already had) as a partner in Minimalism, that gave us a small capital that we invested in launching new products (backpacks).
- Bank financing : The launch of the clothes is financed with a line of credit. If you are an ecommerce/brand/agency and you bill every day, banks understand your business. Here you have two options: Line of credit (ideal to pay suppliers) or bank loan (to invest in technology for example). For their part, the banks charge you interest for leaving you that money and you pay it back, in the case of loans, or by disposing of it in the case of the line of credit. The first line of credit had a personal guarantee from the founding partners. Then came another 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 implies going more slowly than we would like, but, for the few of us, we do many things. If we don't know how to do something, we hire freelancers who help us by project.
- Seek profitability : From our experience we knew that being profitable gave us options:
- Bank financing: If you present the IS and you are profitable, the banks give you access to capital at better interests 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.
- Seek private financing: Whether through a crowdequity, a fund, or several Business Angels, we knew that we would be more attractive if we are 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 fulfill the following point:
- Make the wheel turn : THIS IS THE KEY POINT 👈👈
If we have lines of credit with banks (financing the payments of supplier invoices) and 30-45 days of deferred payment to suppliers, the "only" thing we have to do is manage very well the orders we make to them.
If we are able to estimate sales and place orders every 2 months, we do not need to pull the cash, since we finance ourselves with the suppliers and with the line of credit if necessary.
Being able to leave the box to make campaigns that freak us out like: “ Blank canvas ”.
- New products : In this case we run risks. Every time we launch a new product, we do not have reception data, stock times, sales... 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 one to say if a business should be profitable, if it should be financed with bank debt or with external investment . The only thing we want is to explain how in Minimalism we have opted for a model in which the numbers appear in green 👍 and not in red 👎
We are aware that we are starting, we want the brand to grow to "an idea" that we have in mind where everyone can find the basics of everyday life 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 seek private capital to grow, to open markets or to open stores, we hope to have strong brand foundations 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, pass it on, we appreciate it.
Do you need corporate clothing for your company? Who better than Minimalism? contact us here
marta, baubaukids said:
Hola Minimalis, Hola Pepe,
Muchas gracias, me encantais, estoy empezando y me habéis enamorado con vuestra misión, voy a leerme toda la info y si tengo dudas os pregunto. Gracias por la claridad, transpariencia. Y poro ayudar a emprenderdores a aportar valor al mundo. Soy Marta de Baubaukids, ropa sostenible , la importancia de las pequeñas cosas para toda la vida, consciente, tejidos orgánicos, fondo de armario, atemporal. Estoy con la web, espero conocerte y charlar de temas que compartimos. Un abrazo¡¡¡
Este año los ingresos son menores que el año anterior porque el año anterior tuvimos un pico muy grande con la campaña de Pau Donés. Aún así, como bien comentas nuestro trimestre fuerte es el último. De todas formas no creemos que vayamos a duplicar vs el año anterior, nos quedaremos en 500K-600K, esperamos!
Hola! Como siempre, gracias por vuestra transparencia con este tipo de posts, ojalá consigáis que muchas otras marcas cambien el chip y sigan esta iniciativa.
Por otro lado, y esto es pura curiosidad, los ingresos de 2022 hasta mayo parecen que no siguen la tendencia de hacer un x2 respecto a los ingresos del año anterior (parecen menores). Esto puede ser porque realmente los ingresos en vuestro casos no sean lineales a lo largo de todos los meses del año (i.e a final de año con Black Friday/Navidad, etc. se vende mucho más que el resto del año) o porque realmente este año los ingresos se prevén menores, sería así o mis cuentas están mal y hay algo que no he visto? Qué previsión de ingresos manejáis para este año?
Gracias, enhorabuena por el éxito y seguid así!