tim

This small business owner interview comes from Indonesia, home of Tim and Diana. As the founders of KayuConnection, they provide customers worldwide with custom wood furniture from small furniture makers in Indonesia. While this interview was conducted over email due to time zone differences, Tim took my advice to "not be boring,", so here you go. Enjoy!

Who are you?

I would have thought that before doing this interview you would have at least done a little research to figure out who I am?! Just kidding, I realize that I’m not that famous (yet)!

All jokes aside - I’m just a regular guy that gets a kick out of coming up with concepts that people are willing to pay me money for. The feeling fulfillment of coming up with a product, concept, or idea that solves someone else’s problem to the extent that they are willing to part with their hard-earned cash for it is simply unmatched. There’s simply no better compliment than that and this is the feeling that drives me every day and defines what I do.

It’s not because I’m greedy, but it just gives a wealth of satisfaction knowing that you came up with something all by yourself that other people enjoy. Really!

I’m originally from the Netherlands, but spend most of my childhood moving from country to country and have since developed somewhat of an unhealthy addiction to moving which is a habit I’m finding hard to kick. At this point I have lived in 7 different countries (including several places in the US), and have visited close to 40 different countries, while right now spending around half of my time Singapore and the other half in Indonesia.

I feel that the exposure I have had to all these different places has helped tremendously in opening my eyes to the world around us, and being able to prioritize the most important things in life – which is to just enjoy each and every second and spend as much time with those that are important to you.

I’m currently engaged to my lovely fiancé Diana, who helps me out with my business and we are due to marry in May of 2015. Exciting times!

While many small business owners fully dedicate themselves to their businesses, I still have a full time job also as a General Manager for a business unit at a large food ingredients company – which is a job that I enjoy thoroughly and which I’m able to draw many life lessons from on a daily basis. I’m a firm believer that as long as you’re able to keep on challenging yourself, and as long as you can continue developing yourself as a person, that it’s time well spent.

What business are you in?

Let me start off by giving you a little bit of background on how I started my business. I already mentioned that I spend a lot of time in Indonesia. Some of that would have been work related, and some of that would have been pleasure related.

Every time I went there, no matter where it was, I always noticed there were a lot of little shops that sold and displayed all types of wooden furniture. More importantly, most of it appeared to be put together by hand and appeared to be of very good quality using high quality wood types. Some of it was in unique Indonesian / Balinese style, but there were also pieces that could fit in anybody’s home, anywhere in the world.

There was so much of it, it almost seemed in oversupply. Then it hit me – why can’t I help these guys get access to a broader market and give them the means to tap into markets beyond just their local towns and villages? I can help them sell their products in developed markets like Europe and the US, while establishing controls to ensure that quality is of an exceptional standard, and even offering a service where customers can request a customized piece of furniture built exactly how they want.
In my eyes this was a win-win. The small furniture makers in Indonesia would see increased sales through gaining access to broader markets and the customers would receive high quality and customized furniture exactly suited to their homes and exactly how they want it.

The only issue was going to be trust. People tend to be extremely weary when ordering expensive items online, let alone if it’s from a foreign country. You need your customers’ trust and I felt that I was in a unique position to deliver that by showing my face on my website, creating a connection with the visitors through our blog, and building relationships with key people in the industry.

The process of gaining trust is a concept that already executed very well in the online marketing niche, but I have seen very little of it in the furniture industry which I feel is a great opportunity for us. That trust, in addition to helping out small business owners in Indonesia, is the unique selling position of Kayu Connection versus other furniture exporters, and that’s how we intend to set ourselves apart from the rest.

Gaining trust: Can you dig a little deeper into this idea? What obstacles have there been, or still exist, between you and your customer's trust? Have you gained any insights into overcoming these obstacles?

There's a number of issues as far as trust is concerned. When you look at a purchase of furniture, it is typically a relatively large expense in terms of financial value. Generally, the more money that is involved, the more difficult it becomes to have someone part with those hard-earned dollars and the more that you as a supplier will have to do to win that customer’s trust. There’s simply more at stake for the customer.

The best way to earn a customer’s trust is for them to see your product physically. To be able to look at it from up close, touch it, try out it, sit on it, you name it. There’s simply nothing that beats that. The customer will know exactly what he gets once he parts with his money and there’s no surprised. It’s a pretty sure bet.

Being a business that largely operates virtually at the other end of the world in a country that many are unfamiliar with, we don’t have the luxury of having potential customers walk into our shop where they can see the product so we have to find ways of overcoming this. This is perhaps the most difficult challenge and still challenges us to date.

There is no quick fix for this, but we are doing a number of things to try to overcome this. It’s a long journey.

One way is by how we try to brand ourselves. We present ourselves as people with faces by putting pictures of ourselves on our website, and with personalities and opinions by sharing our views on our blog (which is still new at this point). This builds much more trust with people than a faceless organization and is still a relatively unique approach in our sector which we feel can set us apart.

We also try to build relationships with key players in the industry and in adjacent industries. One example is a recent expert roundup we conducted on home improvements where we interviewed 45 experts in the interior design and real estate industry to give their opinions. Not only did this give us a nice boost in visibility for our business, it also gave us a reason to publicly network with some key players in adjacent industries signaling trust to potential customers.

Last but not least, you can do all the networking and branding that you want but at the end of the day it’s about delivering on what you promise and ensuring that the quality of the product is what the customer expects. At the end of the day, nothing beats a happy customer as they are often the best promoters of your product.

Tell me about your favorite customer / client?

This is a hard one to answer because the majority of our customers tend to order online so there is little face-to-face interaction and as a result you don’t really establish an in-depth relationship with the customer.

In general terms, however, my favorite customers are those that know what they want and are clearly able to communicate that. That’s how we can best serve their needs and ensure that we deliver a product that they are happy with.

Having said that, it’s our job to make sure that happens and that we are able to guide the customers through that process in the most effective way possible. I have realized that the more you can help a customer decide on what they want, and help them communicate that, the more successful you will be. This goes for all business models in my opinion.

How does your business define success?

Personally I define success as having fulfillment out of what you do on a day to day basis while having enough financial means to maintain a good standard of living, and being able to spend your time with those that you love. This is a mindset that I carry with me on a daily basis, and is one that I transcribe to my business as well.
Having said that, it feels really good to win and I get an enormous kick out of coming up with concepts, ideas, and products that help others to the extent that they are willing to pay money for it, as I mentioned earlier.

We are doing this by being able to overcome the trust gap that currently exists with ordering products online therefore providing enough added value for us to be able to add a slight mark-up to the furniture that we export to customers globally. The more we can do this, the more I will define Kayu Connection as being a success.

What advice would you have given your younger self when you first started?

Just do it, because you only live once. I know those two are clichés mashed into one sentence, but so what? Over the past couple of years I have realized there’s nothing more important than simply taking action. Action is king.

I used to spend hours and hours philosophizing about what the right approach would be when starting my business, and ended up doing very little to nothing at all. I would have been much better off by only having a very rough idea of what I wanted, and just taking action and adjusting course as needed. You’re not going to get it right immediately anyway, no matter how much you plan.

I’m not saying that it’s not important to make a plan when you are starting your business, because it is. The problem is that there are some people that take too much comfort in the planning process and think that it is work. In reality it isn’t. It’s all about execution of plans and ideas that help you get from A to B and that move you forward, not the formulation of them. The hardest part is just to get out of your comfort zone and get started.

Not to get too philosophical here, but the same goes for life in general. It’s ultimately what you make of it. You are the master of your own destiny. If you don’t like your current situation, only you have the power to change it. That’s what makes life so enjoyable.

I realize that that’s easier said than done sometimes, but you always have choices to improve your life. It’s just about harnessing and executing on those choices that will ultimately separate those have what they want in life, and those that don’t. It’s taken me a while to come to terms with this concept, but I think that recently I have finally started to get it!

What do you consider your greatest success with your business?

Earlier I explained that success for me means doing something that I get fulfillment and enjoyment out of. There is no specific event or accomplishment that I would consider the greatest success, but rather the concept as a whole.

To that tune, the greatest success with my business is that I’m doing something that I love doing, which I feel adds value to others also. Even though it’s still early days with my business, for every additional order I receive I get pleasure out of the fact that I’m helping support small Indonesian furniture makers and therefore local communities depend on them. I’m helping them access a market that was previously out of reach.

What’s even better is that I’m able to make money in the process. What better way to than to kill two birds with one stone?

Have you ever wanted to quit, stick with a regular job? Why/why not?

As mentioned earlier, I have a regular job also at the moment.

Having said that, there are advantages and disadvantages to each. I would say that the biggest advantage to running your own business is that you have more say in how you allocate your time. If there is some down-time, you have the flexibility to take some time off at your own discretion. On the flip side, if for any reason your customers need you, they need you. It doesn’t matter what time of the day it is, where you are, or what you’re doing.

In a job setting, as we all know, the hours are more defined and more predictable. Of course, with smartphones and other technology this line is becoming grayer and grayer also, but generally this is the case. This can be a plus for some people and a negative for others. At this point in time, I personally don’t mind either, but who knows, that may change in the future.

Tell me about your typical work day.

I always have difficulty answering questions such as these, because there is almost no such thing as a “typical” work day. Let me try and answer as best as I can.
My existing full-time job requires a lot of travel around South-East Asia so generally speaking I’m on the road. I would say that 4 out of the 5 working days I’m travelling to various countries in the region, while I’m generally home in Singapore or in Indonesia during the weekends which is when I do most of the work on my business in addition to some work in the evenings.

I juggle most of the time that I spend on my business either linking with our existing suppliers in Indonesia to ensure that our orders are progressing as planned, scoping out potential new suppliers, communicating with our customers through email and telephone, or trying to improve our online presence through internet and content marketing. I would say that this occupies around 90% of the time that I dedicate to the business at the moment.

It’s a pretty packed schedule as it stands at the moment, but I’m loving every minute of it. Who knows that may change at some point which means I’ll have to choose between one or the other, but in the meantime I’m enjoying both.

Favorite part of being a small biz owner? Worst part?

As I mentioned earlier, I get extreme enjoyment from being able to solve a problem through an idea of my own and being compensated for it. I would say that feeling is what I enjoy the most about being a small business owner.

The part I enjoy least is that you have to do everything, and I mean everything, yourself. This means anything from doing all your own administration, keeping track of the finances and ensuring there is enough stationary to last for the remainder of the week. The worst part of it is that it’s probably my own fault. It’s something I’m aiming to get better at. I read about many small business owners being able to outsource large chunks of work through the internet, so this is something that I definitely have to start looking into more so that I can spend my time more wisely.

What’s next?

At the moment the business is growing nicely, but I have started to realize that having that accepting customized furniture requests is a lot of work. There’s always a lot of going back and forth with the customer to make sure you understand exactly what they want, and that they end up with a product that they are satisfied with. As a result of this, the scalability of a business model where you do just customized furniture is limited.

I’m currently working on developing a standard furniture offering that I would like to add to our site as well. Given that we are working with a number of furniture makers, we have to make sure that each of them are comfortable with the designs that we put forward so that is a process we are going through at the moment. It may be a little while before all is finished, but I think that it will improve our process significantly, and allow us to scale up to the extend where we can accept more orders.

Aside from that I’m also currently working on a number of little projects on the side also. For example, I also recently invested in a piece of land in Indonesia which I eventually plan to develop and I hope to start covering that process on our blog as well, so stay tuned for that. I feel there’s a lot of opportunity out there in Indonesia, and that the underlying fundamentals look pretty bright for Indonesia to see a lot of growth within the next 2-5 years, so I’ll likely be doing more of that in the future.

stroheim-typewriterThis week's guest post is a good follow up to last week's. You ready to be your own boss? Here's what Hannah Corbett has to say about it. For SBT's perspective and passionate rebuttal, see also "How to Start Your Business the Wright Way" and "Don't Borrow; Sell". Think those articles conflict with some of the advice put forward here? You're darn tootin' they do. Why else would I publish this piece, if not for an alternative to our usual contrarian tirades?

How are you going to get your business off the ground? -Seth-

Starting and running your own business, for many, is living the dream. For others, it is still just that: a dream. There’s a lot of idealism surrounding startup business and entrepreneurship: “dream big”, “shoot for the stars”, etc, etc, etc. But the truth is, “dreaming big” never really got anyone anywhere – good old-fashioned hard work did.

There are a million and one reasons why potential entrepreneurs ‘can’t’ breakaway from their nine-to-fives and go solo – the main one being that it’s unaffordable. While, yes, you probably will need at least some money behind you in order to start up a brand new business, there’s no reason why raising this money is unachievable.

It is possible to start a business with little initial funding – it’s not easy, but it’s possible. You have to be strict, stringent, and resourceful at all times. Don’t let this put you off, though, starting your own successful and affordable business is absolutely achievable – you just have to get into the right mind set. Take a look at some of the following advice on how you can start a business on a budget, and see for yourself.

Budget

Budget gets its own section as it’s one of the most important foundations of any successful business. Everything little bit of your business that you build will need a budget as a platform to stand on. Even elements that may end up being free – such as free advertising for example – still need to be considered by the budget before being executed.

When it comes to your business’s budget, the usual advice is to spend time on your budget, consider all possibilities, be realistic – but really, the most important thing is that you stick to it. It doesn’t matter if your budget is as little as £1,000 – you need to spend that carefully and tactically. Don’t stray either way by so much as a penny – if you can’t stick to your budgeting plans, then you’re setting yourself up for failure.

Initial Funding

Once you’ve got the right budget in place, and you’ve pledged to follow it religiously, it’s time to move on to the question of how you raise initial funds to kick start your business. Traditional methods, such as getting a bank loan or using credit cards, can often be the most expensive in the long run, so consider some of the following options, too.

Crowdfunding – Crowdfunding is a great way to raise funds through an equity scheme, and there are a huge range of websites that you can do this through (Indiegogo, Crowdfunder, and Kickstarter just to name a few). There are a lot of benefits to crowdfunding, but it can also be risky. For example, with some sites, you have to raise 100% of your target in order to get any of the money. So, if you reached 99.99%, well, you wouldn’t get anything. It can also be massively successful, though. To use Brew Dog as an example again, they created their own equity scheme, called Equity for Punks, to fund their business. Check out this guide for more information on crowdfunding, and decide if it’s right for you.

Accelerator This may not be the best option for everyone, but it’s an option worth considering nonetheless. A startup accelerator is an intensive programme designed to get startups off the ground, quick. If you’re well prepared and suitable dedicated, an accelerator could work for your business. Find out more about startup accelerators here.

Partners You don’t have to go into business alone. Going into business with one other person doubles the amount of initial investment money (and doubles the amount of people seeking additional investment). Going into business with three people triples it, and so on and so forth. You might not initially be willing to share your big idea with others, but sharing the workload and responsibilities that come with having a partner could be hugely beneficial down the line.

Friends and family – This is hugely underappreciated by budding entrepreneurs, as many feel embarrassed asking family and friends for help. But, honestly, you can’t be shy. You have to be bold. Maybe your Great Aunt Nellie is a millionaire, or your best friend just got a great bonus at work – ask them if they want to invest it in your business. Worst case scenario is that they just say no, and best case is that your business gets some funding.

Bootstrapping This is, arguably, one of the cheapest ways to start a business, as it requires no external investment whatsoever. Bootstrapping involves using the skill set you already have, and finding a market for services you could provide with those skills. It’s a great way of getting some money under your belt to invest in scaling up your current services, or use as a startup fund for another business idea.

This list is certainly not exhaustive – there are many other ways to fund a startup. If you want to do this in the most cost-effective way possible, it may mean going down unusual funding routes, or combining multiple funding options together to raise your target amount.

Next Steps

Product – For a small startup, you don’t need the ‘big’ idea, so much as you need the ‘niche’ idea. Shooting for the stars is not always wise; when it comes to starting a business, it’s better to take baby steps – well planned and thought out baby steps – and work your way up to bigger things over time. Having a niche product idea is a good way to go about this, as it’s likely there will be less competition in your corner of the market, and (hopefully) there will already be a defined audience and demand. It can be a much easier (and cheaper) win than jumping, head-first, into competition with the bigger companies and corporations.

Marketing – You’re really going to have to think outside of the box with your marketing, especially to keep costs down. As an example, consider the craft beer company, Brew Dog. For this small business, thinking outside of the box is an understatement – they play entirely by their own rules. Their preferred marketing techniques are brave, bold and edgy (see some examples here), which is why they make such an impact compared to other craft ale companies. In an ideal world, you would also be doing all marketing yourself to keep costs down, as paying an experienced marketing expert will be costly.

Saving Money

It’s all good and well starting a company with very little money, but it’s equally as imperative that you keep costs to a minimum once your business is up and running. Remember that reducing outgoing costs effectively boosts your bottom line.

Keep overheads down This is important as it’s all too easy to find that you’re spending a lot of money on rent and bills each month. To start off with, don’t hire - learn to do the job yourself, or get an apprentice or work experience volunteer on board. You could always get a freelancer/contractor in if you have to. Also, you may not need to rent premises initially. Consider setting up in your spare room or garage first. You can move to proper premises as and when you need to. This keeps energy bills and insurance down, too.

Upfront payments – asking your customers to pay you upfront – or half upfront at the very least – means that your costs are always covered in advance, so there’s no way you can be out of pocket.

Second hand Don’t be tempted to splash out on the latest tech or most chic furniture – it’s an unnecessary cost for something you don’t really need. Even customer facing businesses can make the most of second hand furniture and equipment without looking tacky or scruffy. You can find virtually everything you need for your business second hand, or even free on sites like Freecycle.

Always remember:

Once you’ve got yourself into the frugal business mind set, planned the cheapest funding for your business, as well as thought out how to keep day to day running costs to a minimum, there are a few more things that you should always keep in mind in order to keep your startup cheap.

Play it safe – There is nothing wrong with going for easy wins or guaranteed returns to begin with. When your company is bigger and more stable, then you start to take risks. But for the time being, it you do have to take risks, take calculated risks.

Perception is everything – Nobody needs to know that you run your business from your spare room, or that it was funded entirely by your Great Aunt Nellie. Even if this is true for you, there’s no reason that you can’t project your business to be bigger and better than it currently is. Make it what you want it to be, because one day, it might actually be that big, better business.

Sweat equity – Dreaming big does not a business make – working hard does. You cannot be afraid to be hands on and dedicate everything to making this startup work. You are almost guaranteed to fail if you are lazy or work-shy. You have to actively make your dreams a reality, so get stuck in.

To conclude…

The key to starting a business cheaply is to have a little smarts about you, and a lot of dedication. Address the foundations of your startup, your initial fundraising techniques, as well as the proposed daily operations of your business to make sure that all three embody the strict and thrifty mind-set you need to make your business work.

You don’t have to be wealthy to start a business, but you have to have adopt and live the characteristic resourcefulness, prudence and commitment of the entrepreneurial mind-set.

This week's guest post comes with a slick infographic. While the infographic is a fun way to self-assess your own motivation as a business owner, I know serious business owners aren't going to let an infographic push them around. So enjoy the exercise (there's always room for improvement), but don't let it go to your head. -Seth-

ownerSo you want to ditch the nine-to-five life and be your own boss, but how do you know if you have what it takes to be a success on your own? You might be surprised to learn that the deck is mostly stacked against you, but if you have the right motivation you can deal yourself a winning hand.

Since the recession in 2005, self-employment rates have dropped but they are expected to be on the rise again. Small businesses are still the backbone of our great country and most of those were started by the self-employed.

But the numbers are pretty dismal since eight out of every ten new businesses fail in the first two years. Most often they simply run out of money, but often they crash and burn right from the top, self-sabotage through founder dysfunction. That’s right, the boss!

Forbes gives these five reasons why new businesses often end up in the tank:

  1. Not in touch with their customers
  2. Lack of any unique value
  3. Failure to communicate
  4. Leadership breakdown
  5. Lack of a profitable business model

Maybe your boss makes it look easy, but it is actually a lot tougher than it looks especially when you are in charge of yourself. In order to be successful, you must be:

Even if you don’t have all these skills, it doesn’t mean that you are a “bad worker”, some people function better as part of a team. Others are more productive if they are in a structured environment. Some people are leaders and some are followers, not everyone can be the boss.

Much in the same way that some learn better by listening, others would rather read instructions and there are those that like to take a more hands on approach.

So do you have what it takes to be your own boss?

Using the infographic below, you can do a quick tally to see if you are best suited to stay in your current position or if you would be more successful as your own boss. Answer all the questions honestly, keep your score and compare your results with the recommendations at the end.

Be truthful, no one knows you better than yourself. By looking deeper into each of these categories you can better see where your strengths are weaknesses lie. Where do you excel and what areas are in need of improvement?

Thanks to this infographic, designed in part by Gryffin.com, you can take this test to see if you should be writing a new business plan or if you are better off punching a time clock:

 

Great-grandpappy Rasmussen tending to his store

Great-grandpappy Rasmussen with a customer

Editor's note: If you've been following along, then you already suspect what I'm about to tell you, that this is another excerpt from our work in progress. Why else would it have a note from Seth at the head of the article, right?  Right.  

Glad you're paying attention. -Seth


 

So you’ve done your homework, asked fifteen kazillion friends about your big idea, and are convinced that you have a business. Well, you’ll have a business when you get your first customer. Only then are you in business.

Before we dive into all the tactics you can use to unearth your first customer, let’s clear a few things up:

Real Customers Pay with Real Money - no trades, equity agreements, etc… Those can be useful, but customers by definition generate revenue for your business.

Customers vs. Clients vs. [insert noun here] - the definitions here truly don’t matter. The only important thing to distinguish, is that when working larger companies, that you’ll likely have multiple customer/clients, i.e. the woman cutting the check, and the man receiving the service / product.

The Amount of Money Customers Spend with You DOES NOT MATTER - some of my best clients have only spent a few hundred bucks with me in the past 5 years combined. But they referred me $25K+ in new business.

So how do you get your first customer?

1) IDENTIFY THE LOW-HANGING FRUIT

2) START CONVERSATIONS WITH ALL OF THEM

If I were to list off all of the steps required in building and growing a business in sequence, this would be the task that EVERYONE screws up the first time around. Until you’ve put in some heavy repetitions off that first conversation, it will come off as salesy, or weak, or overbearing, or confusing, or spammy, or uncomfortable.

Here’s some guidelines to help take off some of those rougher edges:

  1. CHOOSE THEIR MEDIUM … if you prospective customer communicates with you via LinkedIn Messages, then use that. If texting, then use that. If in-person, then use that.
  2. DEFINE WHAT’S IN IT FOR THEM … this can take many forms: lively conversation, satiating curiosity about ‘what you’ve been up to these past 4 years’, they want to pick your brain on one of their ideas, they want to connect with someone in your network. Uncovering human motivation is art and science - avoid over-thinking it, just remember that have to have a good reason to talk to you - even your mom.
  3. THE GOAL IS RELATIONSHIP … if you open up conversation with a prospect with the sole intent to make a sale, then you will fail, or succeed weakly. The absolute best outcome of any business conversation is creating / strengthening the relationship where that person becomes your biggest fan and top referrer.
  4. BE FORTHRIGHT … even the most dense people can detect an incoming sales pitch. If they ask, “why should we talk?” sometimes the best approach is just to come clean. “Well. 
  5. DON’T SELL ANYTHING IN THAT FIRST CONVERSATION … “Interact first. Sell second.” - Seth Godin
  6. BE HUMAN … nobody cares about “solutions” that you can offer them. They care about you caring about them. I’ve never closed a deal that didn’t include some story-swapping in the initial conversations.
  7. BE VULNERABLE … you cannot expect someone to trust you with their money, buying something that nobody has ever bought before, when you can’t open up to them. If your product was created out of a ridiculous and highly embarrassing incident, then tell them that story. You open up, then they will open up. And when they open up, you can discover what motivates them to open their wallets.
  8. BE SINCERE … if you can’t find something sincere to say during conversation, then you shouldn’t be talking in the first place.

A good default approach, “Hey, Jim. Nate here. So I finally sucked it up and started that ___________ business I’ve been toying with for years. I’d love to get your insight on this - you know, sanity check it a bit. I’ve got some time on Thursday mid-morning. Does that work for you? Thanks in advance, and please let me know how I can return the favor. ”

If it goes well, they will declare, “I can use that … sign me up” … or better yet, “I’d focus more on XYZ. Do that, and I’ve got about 4 folks that could use that.”

That's all for this week.  There's definitely more to this chapter, concerning how you go from conversation to sale, though I plan on omitting it from the blog.  Maybe I'll post it if you ask really nicely in the comments.  Otherwise, look forward to next week's post, which will be about whatever we feel like.  Thanks for reading!

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