Small Business Economics

28 May 2018

Founder Julia Leaphart

 

About 10 years ago, before my business became profitable, paying my bills was a constant struggle. The unevenness of income and the many demands of running a business and a household meant that any dollar that came in had a multitude of vying needs. I remember coming home from a trip to Walgreens and truly envying the sales clerk at the register because at least she got a paycheck every two weeks. So if you are like myself, and starting out with very little capital and less business knowledge then you are essentially creating something out of nothing. But watching a business grow organically to become self sustaining, and from there to supporting its employees and rewarding the risks taken by you, its founder is a very beautiful thing. My father told me early on that if you can persevere and succeed in building your own business, than there is nothing else quite like it.

If you hope to have genuine success in your business than you need to become financially savvy. You must learn how to manage your money prudently and with the foresight to look down the road and anticipate unexpected needs. Many people, especially, dare I say it, women, are dismissive of this essential building block. In my observations, they adopt a cavalier approach relying on a spouse, or outsourcing this function entirely from the outset to a bookkeeper. It is not possible to master everything, but a business owner must to a degree be a jack of all trades and adopt a hands on approach to every aspect that will enable the business to survive and grow. Once you have a firm grasp on the basics than yes, you can outsource tedious and time consuming financial paperwork to a bookkeeper.   It is fully within the reach of even the most creative person to become conversant in basic accounting and budgeting.
 
So what are the basics of bookkeeping and cash flow management?
 
Firstly, you must secure a regular cash flow and be reasonably knowledgeable about when and how the money will come in. This means getting customers to prepay as much as possible. As a fledgling business you cannot afford to give credit to many customers. This luxury will come down the road when you are more established. But if your business relies on supplying only large accounts that pay after 45- 90 days, and frequently penalize you with chargebacks, you will need a hefty line of credit right off the bat to bridge temporary cash flow shortfalls. You must try get any and every sale you can regardless of the headache involved, later, you can become picky and fire your least profitable customers. You also need to bend over backwards to please those customers because you need them to like you and your product, and reorder. You are building a customer base and every customer is money in the bank. Every sale generates cash flow without which your business cannot run. If you are truly invested in your business, your net worth is tied up in it and you have put your heart and soul into making it work, than you will learn this lesson early and painfully.
 
Once you have secured a reliable cash flow because your product is so wonderful and your phone is ringing off the hook with orders, you must learn to be responsible with it. This involves realizing that the steady stream of income coming in could dry up at any time, or could diminish for significant periods. You must develop the discipline to build up as large a cash position as possible. This is what will make your business healthy and insures it against the hard times. Most businesses are somewhat cyclical in nature, or have bumpy earnings. You must acknowledge and plan for this. This may sound simple, but it is surprisingly hard to do. Just like Wall Street in the long term rewards stocks that maintain strong cash positions and low debt, risky but promising tech stocks may have high valuations at first, but their debt fueled cash burn and lack of profitability is unsustainable and many crash and burn. If you don’t do this, then you will start racking up debt and it will be very difficult to pay off. You do not want to go in to debt funding your basic business operations. Debt is an essential tool to business growth, but it should be used strategically to expand the business by building up inventory, machinery, hiring talented staff.. you get the idea. You want something to show for your debt. It should enable you to increase your sales, and your increased sales should more than fund the servicing of the debt.

 

It is essential to establish procedures for operations, inventory management and ordering. You will only be able to establish effective procedures by working in operations and becoming intimately familiar with every detail of your production. Coming up with efficient procedures is a constant work in progress.  If you enjoy this challenge, and encourage the concept of “continuous improvement” in your staff, than your business will remain dynamic. You must also have in place accurate cost models for each of your products. How much does it really cost you to make each item? Are you charging enough? How accurate is your gross margin? Don’t underestimate the labor it costs to make things. Cost models will only use direct labor, but your indirect labor and overhead must be calculated as well and then applied across the board. A working bill of materials for each item will tell you how much your raw materials add up to for every product, and help you manage your raw material cost. As your product line grows, so too will your component parts. As Himalayan added collections, raw materials grew from dozens to hundreds. How will you keep track and how will you keep up with ordering? You don’t want to run out of anything, nor do you want to over order and tie up your cash. Establish a working inventory system early on. It does not have to be fancy or even software driven. Again, fancy ERP packages are down the road when growth makes such investment viable. One of the best systems my production supervisor put in place was a binder with pages for each product. Beginning inventory was marked and each time the product was pulled from the warehouse it was noted in the binder . Inventory numbers were easy for me to access, and relatively accurate. Doing frequent physical inventory counts is perfectly fine, as long as it is done regularly as part of the production process schedule. This won’t work if your are tracking hundreds of items, but for a few dozen items it is a low tech solution.

 

Becoming familiar with bookkeeping, accounting basics and the tax code as it applies to you will help you immeasurably gain confidence as a business owner. This means learning how to maintain your ledger, reconcile your bank accounts at the end of the month, accurately categorize all your expenses and setting up the appropriate accounting structures for your particular business. Keep your personal and business expenses separated from the beginning, and learn the difference between expensable and depreciable purchases. Get a smart CPA to do your taxes..for my business it meant the difference between getting that manufacturing tax credit that we were entitled to and saving tens of thousands of dollars. Have a budget in place, and a rolling operating forecast.. no you probably can’t set this up yourself because you don’t know how to design sophisticated formula driven Excel reports, but get some help from a business analyst. Having good financial reports in place and learning how to maintain them will keep your books clean and professional and keep your business on its financial track.

Once you have grasped a working knowledge of your financial operations, accounting, money management and how much your business costs to run, you can delegate these functions. You are after all the creator and founder and your time can now be more effectively utilized creating the value that will propel your business to the next level. You are financially literate enough to understand how your business generates cash and whether it is truly profitable. It will influence your creative process and set you up for long term growth and sustainability.
 

 

Fragrance and memory

10 December 2017

When I was a child I loved to play with matches. The illicit joy of creating my own light in darkness was liberating and strangely empowering.
 
But half the thrill was the smell – that acrid sulfurous sharp inhalation of independence and potential danger was the essence of happiness.
 
Childhood was all about  smells – soap, shampoo, frying, rain, mud, sweat and burning wood. Our garden at night – roses, jasmine and sweet williams. The way the earth smelled just before rain, the smell of wet ferns. Walking in the front door and the smell of supper cooking.
 

 
In the beginning of this journey my focus was on collections that were vessel driven and the scent was secondary but more time I spent with my customers seeing their reactions when they picked up a candle to smell, I noticed that many times it was an emotional reaction. And if they made a positive connection they would buy the candle. So the purchase became more than a material transaction – it had a human element. It was like I was giving them something to connect them to their past. In time I chose to approach fragrance as a way to trigger a memory.. and with it a way to connect with my customers. I often hear that our fragrances are unique and unlike other candle collections. They are created to impart a sense of happiness, the continuity of life with all its ups and downs. As we grow into adults many memories fade, but a fragrance memory will always remain sharply in focus.
 
Himalayan fragrances are not trend driven, and they transcend fashion and sentiment. Many are timeless and have their own small cult following – Campfire and its more intense partner, Woodsmoke recapture that nostalgic joy of a wood fire. Mountains and forest, sweet acrid smoke, amber resin and top notes of fresh cut wood. Woodsmoke always elicits a strong reaction – some describe it as the way your clothes smell after sitting by a fire. For me it is at the smell of childhood, the collective smell of hundreds of wood fires, burning precious wood gathered painstakingly in the day to cook the evening meal.
 

 
Ginger Patchouli, our best loved fragrance, with its serendipitous marriage of spicy ginger and warm earthy patchouli  is the hook that draws many customers into the collection. I find it heady, sexy, alluring as a perfume but also comforting and hospitable like a well cared for home, as if the molecules are teaching us connections between things we thought unrelated. Patchouli and musk are the grounding force for many of our fragrances. On their own they smell dull and flat, but added to a ginger, or a floral, or a vanilla compound they became something much greater. Like the final coat of varnish on a painting that creates a finished look with depth and saturation.
 

 
Fragrance can be a recreation of a past utopia and an expression of an ideal state. Sacred Temple Garden is a moment of luxury, a fancy hotel lobby with a signature fragrance. There is a hint of the exotic with notes of orange blossom and incense. A customer once said it reminded her of a bed and breakfast in New Orleans. Ancient Philosophy is the scent of late afternoon tea, and sunlight slanting in, casting its dust flecked paths of brightness.. of long empty afternoons stretching into night. Tobacco Bark is about wet leaves and the sweet woody drift of pipe smoke. Clove, rum and vanilla give it a comforting bed of well being. Prayer Flag with its smoky notes of olibanum, myrrh and patchouli captures a world of escape, adventure and far away places where temple bells chime. It invites the armchair traveler to dream and drift.
 
Florals in the fragrance world are a collective path to a lost innocence. In our culture they underpin the classical and romantic. Florals in their most pure transcend the shifting mores of taste but very rarely is a single floral note satisfying. It needs an amber, a sandalwood or an oakmoss base to give it depth. It is the floral top notes that trigger our remembrance, but the base notes make the scent complete. Dreamy intense tuberose in Honeysuckle and Moonlight frame the top notes of gardenia and late spring honeysuckle. Florals compounded with complexity and layering take us to a new place that does not exist in nature. Forgotten Violet is our most recent floral, its heady combination of bergamot, clove, lavender and violet leaf create a pervasive scent that is warm and inviting, base notes of cashmere give a rich and full bodied texture like sitting down to a meal that has been lovingly prepared with many complementary ingredients.  It is our most fragrant scent,  and most expensive to make.
 
The candle and home fragrance market has become crowded, and fragrances now are much better than 10 years ago.    We remain small and focused,  seeking to be not only a vehicle for fragrance, but to combine aesthetics and fragrance, to reach out and touch the recipient in some small authentic way.   It is not for everyone, but for those who do there is a connection.
 

 

Vignettes

17 September 2017

Lighting adds character and warmth to a room.. and Himalayan Candles are full of character..
 

 

 

 

 

 

 

 

New Dharamsala collections for Fall shipping

5 July 2017

A central theme of metal containers filled with our most intoxicating and heady scents tie together this growing collection. These pieces will not be added to our website for the retail trade until they are fully in stock this August. Our wholesale customers can preview at the upcoming gift show in Atlanta, LA, NY, Seattle and Denver or contact us for a Fall/ Winter 2017 supplement.


Process, production and the lifecycle of a product

4 September 2016

When you light your sweetly smelling honeysuckle Tea Time Tin candle, or your woody pipe tobacco spice tin candle you are probably not thinking about the long journey this little luxury has made to arrive into your home.    Your candle has brought together components from 5-6 different sources and has been touched by about a dozen different people in the production cycle.

Himalayan candles has many collections all with their own distinctive look inspired by a time and place, a memory, a recreation of home.     Together they will tell a story of fragrance, aesthetic beauty, functionality and reuse.  But there is also a hidden story of love, labor, struggle, learning from others, stumbling over mistakes and growing stronger.

That burning candle is a unique hybrid of creative conception, direct sourcing and  domestic manufacturing at a streamlined scale while still preserving artisan hand crafted touches.

A Himalayan candle starts out life as an idea, a finish or a look and that comes to life once  all the parts are established.   The manufacturing – how does one make an aged distressed tin or a vintage victorian glassware en masse?  It comes from working closely with the right factory to come up with materials and techniques that can be used to make our unique containers at a reasonable cost.   It will involve visits to the factory to work on the process.    Our success is rooted in the relationships built with our makers over the years.  The factories I work with like us and want us to succeed. They believe in our product as much as I  do.

 

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Once the vessel is made, loaded onto a container and arrives on our shores, it is unloaded into the warehouse where it will await the short journey to our production area.  My production team is the true story of our product and the backbone of the business.  It is the paramount reason we are able to succeed in a crowded marketplace and hold our own.  Day after day and year after year they will transform empty vessels from the warehouse into the finished product through teamwork, discipline and attention to detail.  Each piece is quality checked, cleaned and prepared.  The wax and fragrance are poured by hand by the initial team of wax pourers,  from there the labels, ribbons and dustcover are meticulously stamped and applied by a crack team of packagers who have been chosen and whose skills have been honed to tie a bow just right, and to stamp a fragrance just so.   Each piece goes through a final quality check by the team supervisor before it is stored in the finished goods area where it will await eventual shipping.

 

PROD pouring

 

 

PROD stamping(1)

 

 

Tea Time Tins

22 April 2016

 

tea time tin group

Spring was moving in the air above and in the earth below and around him, penetrating even his dark and lowly little house with its spirit of divine discontent and longing.  

This quote taken from the classic childrens’s book ‘The Wind in the Willows’  describes how Mole, driven out of his underground fusty home, discovers a new life in the world above, and new friends like the River Rat, Badger and Toad who enrich his boring life with adventure, curiosity and an appreciation for the beauty of nature.  The Wind in the Willows was one of my favorite books growing up, and even now as an adult the elegiac descriptions of the English countryside from the verdant blooms of Spring, the lyrical beauty of an English summer and the cozy domesticity of winter can transport me back to childhood.  I think now Kenneth Grahams’s real gift to childrens’s literature was to impart to its reader a love of the natural world, of animals and their habitat and the wonders of nature, and of true friendship.   

The Tea Time Tin collection gathers nostalgic romantic poetry and literary quotes along with some lovely vintage wallaper designs cleverly decoupaged onto tins.  The 6 designs are filled with innocent and romantic scents that seek only to please the recipient with their lovely aroma.  They are an antidote to the complex and stressful world that surrounds us.

A trip to Rajasthan

5 April 2016

Rajasthan has a different feel the rest of northern India, – it’s more open, there are less people, and there are endless wide open spaces.  Rajasthan for the most part seems to trade on its past of forts, castles, Rajput kings and warriors and its artisan traditions.  Here is the home of intricate hand painting, block printed textiles, jewelry making and a host of other hand crafted industries.

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Courtyard of the Alsisar Haveli in Jaipur – great place to stay, highly recommend it.

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Breakfast with Dad

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Late afternoon sunlight, inviting you to pick up that book and while away the hours till twilight..

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Evening with a glass of well earned Sula Indian wine..

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Textile industry is a bit of mystery, but I did get to witness some down home authentic block printing!

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this art is very much alive and well, this man says it’s all he has ever done.

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No room for screw ups, or risk losing the whole sheet..

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Block printers have a unique focus. their speed and precision depends on it.

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Selling rose garlands outside a mosque in Ajmer. There were many such selling identical garlands. Is there a rivalry running between the many garland sellers I wondered?

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Sacred Hindu lake at Pushkar. Lot of temples surround it, and I undertook my first Hindu lake offering ceremony.

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The central market at Ghantaghar in Jodhpur, bustling and chaotic as all Indian markets, full of good stuff- textiles, bangles, sweets, samosas…

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Sitting in a childhood home – the perfect place to sit and write and think and stare at the bougainvillea, and listen to the car horns..

The power of scent

8 December 2015

 

 

night blooming jasmine - hand painted tin

night blooming jasmine – hand painted tin

 

I drifted off to sleep with the warm fire and the soft heady smell of jasmine.  I dreamed of temple belles in the mountains, their sounds near but in reality very far away.  The air of high altitudes carrying their pure sound and with it the scent of incense drifting into the clear thin air.  I dreamed of thick cypress trees and branch laden deodar trees, and brilliant rhododendron blooms..their petals good enough to eat.  I breathed the clear air of high mountains, washed clean yet forever tinged by a hint of wood smoke drifting from village fires.   I was at the top of the mountain and the ever present clouds  parted and I could see for hundreds of miles.  The snow mountains were so clear I reached out for them, as if I could transport myself to their glacial eternity.   Their celestial presence was a testimony to their ancient roots, the eternal snows, rarely visited and glimpsed only on a day such as this.

 

 

View of the snow covered peaks far away.  I think that these peaks lie in Tibet, or so I have always believed.

View of the snow covered peaks far away. 

distant snow covered peaks

distant snow covered peaks

I was running home along the steep mountain path – rocky and treacherous but a childhood in the hills ensured I never slipped.  I was coming home, anxious to be home but always just aware of the beauty that played around me.  It was growing dark and I reached my house.  My mother greeted me and tea was on the table.  It was warm and my mother had been anxiously waiting – I was home.

When I woke up I felt a sadness for what was lost and at the same time happy that my memories were so clear that simple scents could bring them back to life.

 

favorites - Astier de Villate 'Delhi', Cire Trudon 'Chandernagor' , Dyptique 'The',  Jonathan Adler's Hashish.

favorites – Astier de Villate ‘Delhi’, Cire Trudon ‘Chandernagor’ , Dyptique ‘The’, Jonathan Adler ‘Hashish.’

 

Newly designed refill kits for your wooden candle trays

17 November 2015

These are super user friendly and will extend the enjoyment of your wooden candle tray or barrel for a really long time.

I am posting here the instructions, the size and volume guidelines for what size kit you will need to purchase and a few pictures of the process.  Really, if you have any acquaintance with your kitchen, this mini project should not consume too much time and you should be quite pleased with your results once your wooden candle tray is resurrected to life.

refill flyer  refill size and volume

 

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refill kit website

 

New Victorian style glass hinge lidded jars

19 September 2015

These will be shipping soon and were a big hit at the NY Now gift show. The have a lovely romantic vintage look when they are burning and look quite nice sitting on a dresser or even a a living room table could do with one.  They will come topped with a decorative fabric dustcover.  NOTE!  This is decorative and must be removed prior to burning!   Yes!  This question has been asked!  They will also come dressed up with a little of our favorite Hanah Silk hand dyed ribbon in Stormy Monday.

vic 1 blog

vic 2 blog
vic 7 blog
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vic 9 lit blog
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vic 11 lit blog