Reflecting on 2021
2021 was the second year of Craft & Thrift trading in it's current form and the first full year of it trading as a limited company. I submitted my first business tax return in October, which felt like a huge milestone, even though (spoilers) I had no profit on which to pay tax.
These past two years have been a real roller coaster. Craft & Thrift started trading thrifted fabrics around October 2019. Within 6 months we were in a full blown pandemic, with all the uncertainty that brings. On top of that, Brexit officially started at the end of January 2020 and overnight all my sales to Europe and most of the US dried up. The first summer of lock down in 2020 actually brought a huge swathe of orders, as people hunkered down at home and focused on their hobbies to keep them calm. The second summer of the pandemic, in 2021, brought a tumbleweed of business, as the beautiful weather coincided with the school holidays and lock down easing here in the UK. I have learned a lot about the importance of cash flow in the past 18 months, that's for sure!
Unsurprisingly then, I came to the end of 2021 feeling financially sorry for myself. I had committed to a large amount of inventory in March and May of 2021, not realising that orders would be so tumultuous. I had also taken on a graphic designer to design a new logo and social media package for Craft & Thrift. I'll be talking about this more in future newsletters, as well as giving you all the first reveal, but for now I'm keeping it under wraps whilst everything is finalised. I have no regrets about the rebrand, I love the new logo, but it wasn't the best time to be stretching myself financially. I'm very lucky to have a supportive partner and a small savings account to help me through the lean months, but my aim this year is to starting paying off some of those debts the business has accrued.
I say all this to be transparent, not to garner sympathy. I find the behind-the-scenes of running a small business fascinating and when I read about about it on blogs or hear the details on podcasts, I always find myself wanting to know more about the finances. I want to be open with anyone considering running a small business themselves, especially since social media can give you an impression that everyone is succeeding but you. I had to mute several people during the festive period because the time lapse videos of hundreds of orders being packaged, or the shop update announcements followed by a delighted "sold out!" four minutes later, were too depressing.
The graph above shows my sales January to December 2020 (dashed line) and 2021 (solid line). You can see the clear inversion over the summer between 2020 and 2021 and similarly in the run up to Christmas. It's hard for me to predict what sales might be like in 2022, which is (fingers crossed) going to be closer to a 'normal' year of trading, now that the pandemic is causing less uncertainty. My gut feeling is that the summer months and the run up to Christmas may always be low sales times for me, as people aren't thinking about hobbies during those periods. I tried to build up my 'gift' offerings in 2021, with the idea that it would help sales in November and December. There was more of a plateau of sales in those months in 2021 compared to 2020. It's definitely something I'll try again this year, refining my packaging to create more of an attractive gift proposition.
Noting these trends allows me to start thinking about the months that are strong for me, and how best to maximise on them. Looking at the graph above, the first 3-4 months of the year were fairly good months in both 2020 and 2021, ending in a peak in May just before the summer slump. I'll be spending some time over the coming weeks thinking about how best to market myself over these months, to squirrel away that cash to tide me through the leaner times. Those fixed costs like storage, website and email continue coming, regardless of how few sales I've made!
The flip side of this is also identifying those quieter months, with a view to using that time productively. Those will be the months that I could finally get my finances in order, organise stock take or experiment with packaging for Christmas. I could consider a blogger collaboration or just plan to take a break. Knowing when to take time off from the business is also valuable information.
To prepare for this newsletter, I took a look back at my January 2021 goals. I thought it would be interesting to see how much I managed to achieve. My gut feeling is that I didn't reach any of them and around halfway through the year, I actively stopped trying. 2021 ended up being as mentally strenuous a year as 2020 was and I realised it wasn't doing my mental health any good to be pushing myself harder than necessary. In fact, the second half of 2021 ended up being time I spent focusing on my health. I've been seeing a counsellor and a physio, joined a gym and finally got myself into what feels like a sustainable exercise routine. Overall, the time I would have spent on the business I ended up redirecting into myself and I feel a lot better for making that decision.
January 2021 goals:
Increase sales by 50%. HA! Past Amy was clearly not thinking straight when she made this goal. According to my Etsy stats, my number of orders grew by 6% in 2021 and my revenue grew by 2%. To be fair, the jump from 2019 to 2020 was a big one. Revenue jumped by 260%, so growing by 50% was not outwith the realms of possibility, if I assumed the trajectory would continue in an upwards direction. Similarly, order numbers jumped by 212%, so I wasn't being too hopeful that a 50% increase would be possible. Looking at the differences between 2019 to 2020 to 2021, I suspect that by finding my niche in thrifted fabrics, I've found my people, my audience, which is great! The downside is that 2020 to 2021, I haven't been offering anything new or exciting and so I've basically picked the low hanging fruit of orders and customers. I think my learning point here is that I'm going to need to work harder and smarter to promote the shop if I want to continue to grow.
Grow the newsletter community by an additional 100 subscribers. Looking back at January 2021, I had 192 of you lovely people as subscribers. I currently have 274, so the mailing list has grown by 82. I'm not gonna lie, I'm pretty delighted with that. I promote the newsletter on Instagram and it's in my Etsy bio, but otherwise I don't actively advertise. Given my lack of growth on Instagram (see the next point), I'm pretty happy with this organic growth. Thank you so much to you all for still being here (and reaching this point in the newsletter!)
Grow the Instagram community by 75%. In January 2021 I had just made it to 2000 followers. I now have 2840 so I missed my 3500 target by a pretty wide margin! I found my motivation for Instagram died off in the second half of last year. The algorithm makes organic growth pretty difficult in my opinion. When I look at my stats for certain posts, I can see that barely any people have viewed them. I struggle to understand what will do well on Instagram and find it frustrating when I see other accounts offering (in my opinion!) less quality content, served less frequently and yet growing much faster than Craft & Thrift. I can definitely see that I have room for improvement, the creative act of taking photographs is not one that comes naturally to me, but on the other hand I think there's a part of Instagram that will remain outwith my control - the algorithm. I was told by a small biz-owning friend this year to think of Instagram as a marketing tool and I found that mindset shift has helped me view it with more objectivity. I think in 2022 I'm going to focus more on promoting myself in ways that feel within my control. Instagram feels like I cede control to an algorithm and I don't like feeling like I'm working hard for no gains. I'll still continue to post rregularly, I think it's important to have a solid offering on social media, but I'm not going to get too hung up on follower numbers. I would prefer to plough my limited time into the newsletter, a promotional tool that feels much more within my control!
I'm still pondering on my goals for 2022 and I'm wondering whether it's worth setting them at all. If last year taught me anything, it's that making plans is not always productive for me and I need to be careful to guard the limited time I have available for the business. I'll check back in the January newsletter with an update, once I've had time to ponder and reflect!