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Life & Business

Life & Business: Ten Ways to Bootstrap a Sustainable Business

by Annie Werbler

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

Brooklyn-based architect Emily Fischer founded Haptic Lab — an interdisciplinary design studio focused on using tech for craft — when she felt inspired to create playful, tactile explorations of concepts most often understood visually. Her first quilted maps were designed as wayfinding aids for a mother afflicted with glaucoma; the warm, handmade quality of these tools made them less sterile than other aids for the visually impaired. In addition to the blankets, Emily has ventured into producing kites, furniture, and environments from her signature point of view, all with a strong streak of social responsibility embedded in the process.

Emily used her own resources to launch a company still thriving six years later. In Ten Ways to Bootstrap a Sustainable Business: How I was able to meet expectations, make a living, and not overwhelm myself and others while also respecting fair-trade practices, she shares all the discoveries she wishes someone had told her when starting out. It is the most practical, nuts-and-bolts advice she can offer to solo entrepreneurs taking off on a similar journey toward fair-trade international production, and continuous growth here at home. —Annie

Photography by Haptic Lab

When I started Haptic Lab, I was working around 14 hours a day, seven days a week, because I had built a trap for myself: I made the mistake of undervaluing my own labor, and so lacked the working capital to pay someone else to help me. And I desperately needed the help; I was turning away potential customers because I couldn’t keep up with demand. If this situation sounds unhappily familiar, you need to scale up and out of this maker’s trap — unless you’re one of those self-hating, workaholic types. (I’m a recovering workaholic, too.)

Scaling up isn’t necessarily about making more money or becoming a massive, publicly-traded company. It’s about sustainability and the longterm health of your business, built on your own terms. And it can be done with limited financial means. These are 10 things I wish I had known when bootstrapping myself out of startup burnout.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

1. Define your ambitions and values right away.

Define what makes your work authentic. Recognize if you want to grow your business or not; it’s okay if you want to be a “Small Giant” of one. I am a designer as well as a maker – and the only way I could keep pace with my ideas and be happy in my design practice was to step aside and let others work with me.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

2. Plan for growth, don’t just react.

Have a production plan in place before your work is featured in a design magazine, or if the holiday season is three months away, or if you’ve finally priced your work for wholesale and are attending a tradeshow like NYNOW for the first time. Look for opportunities that give you the most control and fit your values, and don’t do things just to make more money.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

3. Answer the most important question: How much does it cost to make what you sell?

Factor in everything. Most makers greatly miscalculate their own labor costs to stay competitive, and this will kill you when you start trying to manufacture your work collaboratively or add wholesale clients to the mix. When you know what your costs are and what you value, you can make decisions quickly when vetting manufacturing partners or hiring employees. Here’s a great generic “cost of goods” worksheet.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

4. Find the right kind of help for you.

Let’s oversimplify: you have three options. A) You can hire employees and purchase your own equipment locally, B) you can contract work to a factory or small producer domestically, or C) you can work with a manufacturer abroad. Haptic Lab manages a combination of all three, plus several cottage-industry type relationships.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

5. Learn how to be a good boss.

If hiring locally and purchasing your own equipment, work with your local Small Business Development Center office and learn your responsibilities as an employer. (I’ve worked with the SBDC at Pace University in Manhattan — SBDC counseling sessions are free). Set clear, professional expectations about what the job involves. Whether you’ve just hired your best friend or a complete stranger, you’re now someone’s boss and you have to be comfortable with that relationship.

6. Start an internship program.

Network with a local university or school program in your area; most schools have a Career Development office that will help you find the best candidates. Have something to offer and always pay your interns. Get really good at writing recommendation letters.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

7. Work with a local manufacturer.

Let’s say you simply can’t afford the upfront costs of purchasing your own equipment and leasing a workspace; you need outside help. Research local factories using friend referrals, databases like ThomasNet or Maker’s Row, or visit a trade show. I like calling factories and suppliers on the phone. Have an honest conversation about what you’re looking for, and believe me, you’ll know when you’re talking to the right person. Have a list of questions prepared when you request an estimate from any vendor: what are the upfront costs for sampling, what minimums are involved, will you be responsible for purchasing your own raw materials, how long will production take?

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

8. Be skeptical and negotiate.

Your new friends at the factory should share a mutual nondisclosure agreement with you before any money is exchanged. This agreement means they won’t sell your unique product to a competitor, and similarly, you won’t take their samples to a second (cheaper) factory elsewhere. Establish trust first.

A cautionary tale: I was working with a manufacturer in North Carolina and the work was great. I was so happy… until I found the class-action lawsuit online. Several ex-employees had just won a huge discrimination settlement against the management of my seemingly wonderful, family-owned American manufacturer. I was so horrified I cancelled my orders overnight. Make no assumptions regarding a factory’s virtues just because they are located in the USA.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

9. Work with manufacturers in other countries.

It is easier than ever to find manufacturing partners abroad that are ethically responsible and can demonstrate real qualifications that prove it. Radical transparency is possible (I am such a fangirl of Block Shop Textiles), creating a great job for someone in a place like India is possible, but it takes a lot more involvement than a Google search and a few quick emails. Some things I’ve found helpful:

-If you’re just starting out, do NOT use Alibaba. Just don’t. Learn about Fair Trade certifications and use the World Fair Trade Organization supplier database. It is your responsibility to know everything possible about where and how your goods are being made. As my Fair Trade expert in Indonesia told me, “You want to avoid middlemen? I’m a middleman. But I’m the only honest one you’re going to find here.” He posts his company’s balance sheets on a wall outside his office.
If you can afford to, travel. Meet the people you want to work with and develop a working relationship face-to-face. If traveling isn’t an option, hire a consultant (I’ve worked with By Hand Consulting via a scholarship generously provided in memory of Carol Sedestrom Ross while developing Haptic Lab quilts) or work with a reputable sourcing agent. A good agent will serve as an intermediary between you and your manufacturer, and will ensure transparency.
Know your upfront costs. Fair Trade can be a lot more expensive than having goods produced in any other way. I pay my Indonesian kite-makers in full, three months in advance of receiving any kites; I carry the financial burden of production for them. Most manufacturers are paid “ex factory” — once the order is complete but before it is sent to you.
Know the production timeline. If your workers need more time, give it to them; be sensitive to their holidays and cultural beliefs. I once had to delay a critical order for a month because my kite-makers, devout Balinese Hindus, were participating in a mass cremation ceremony in their village (a very happy occasion, by the way). And you know what? Everyone was totally chill and fine with the delay because I had a good relationship with both the manufacturer and customer. Haptic Lab sells out of product all the time because we have strict production caps; I used to work 14+ hour days, but I’d never ask anyone else to.
Establish a reorder schedule. Most overseas manufacturers have minimum-order requirements that can be quite large. These costs can be offset (and minimums negotiated) with a planned reorder schedule. A reorder schedule gives workers consistent employment they can depend on — a very important aspect of sustainability.
Know your shipping costs. Importing goods made overseas is a blog post unto itself, and I’ve made every possible mistake that could be made in this department. I’ve had a late Importer Security Filing, I’ve been fleeced by a company who charged me 3x the annual rate for a customs bond, I’ve had my product end up in other people’s warehouses. Do yourself a favor and work with a shipping agent who handles your logistics door-to-door. I give my highest recommendation to Flexport.

Life & Business: Ten Ways to Bootstrap a Sustainable Business, on Design*Sponge

10. Minimize your financial risk. How do you afford to grow? If you’re bootstrapping, you probably don’t have an extra $10,000 to gamble on a new manufacturing partnership, and factories don’t work on credit. My best advice is to take things slow and keep your order sizes as small as possible to mediate risk. The best and worst thing that can happen is to sell out of a popular design.

Pre-order sales are another critical strategy that has allowed Haptic Lab to grow and become financially stable; almost all of my startup capital has come from pre-order sales and very wonderful, very loyal online customers. Haptic Lab used Kickstarter to fund the production of the first Constellation Quilt design back in 2012, but I had been using “mini Kickstarters” on the Haptic Lab website for years prior. I still use pre-order sales as a litmus test to see which new designs are most popular.

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Comments

  • Incredibly helpful and thoughtful. Too often I find that people are scared to share any resources. Thank you for being so open!

  • This was my all-time favorite interview. As a small business owner I found it inspiring and helpful. I’m going to print it out and save it for reference, thank you for sharing your hard learned knowledge! I also LOVE your quilts, bravo!

  • This is so helpful and encouraging! I always feel stuck between needing to grow and not wanting to suffocate the things that make me love my business. This was a great read.

  • Not only is this the best advice so far in an invaluable series, I cherish my Haptic Lab New Orleans quilt. I love it even more now to learn more about Emily’s business practices.

  • For me, being a maker is not a trap. I’m not a “self-hating, workaholic type” either. I run a growing business and have lots of help in the areas where I don’t have expertise.

    It’s my name on the box, and to me, that means I make it. Perhaps at some point should my company grow like yours, I’ll have part of my line responsibly made as well.

    Being a maker is honorable and it is truly another way to run a succussful business.

    • Hi Sherry! As I mention in the interview, I think it is 100% ok to be a small giant of one, a solo maker. The “maker’s trap” I identify concerns pricing one’s work incorrectly by undervaluing labor costs. I made this mistake when I started Haptic Lab and spent three years in constant exhaustion: running to stand still. As a solo maker, my ideas outpaced my ability to create new work, so I made the conscious choice to grow and work alongside others; I recognize it’s not the right choice for everyone. I love the “Small Giants” book, a discussion of why companies stay small to stay great ;)

  • I’m so glad you posted Emily. There are days when I am frantic from now through the end of the year. You are right, pricing correctly, especially to break into the wholesale market is something we have finally done right. Luckily, I have a great assistant and a marketing manager. So many ways to grow a maker business!

    I will look for that book today, thanks for that and your insight.

  • First of all, your work is beautiful, Emily. Secondly, I love it that you shared so much of your business beginnings and your processes. Seven years into my own business, I’ve learned to raise prices and what makes money, but I still struggle with the ready made items I can stock in multiples that will be consistent winners. My first step will be adding some local help via intrerns, which I’ve done before. Why not again? It was a smart move that for some reason I moved away from when my last intern left. I’ll be reading this about ten more times to let it sink in. Thank you for sharing.

  • This is a wonderful article, thank you so much. I’ve been researching where to have a product of mine made, and kept running into Alibaba when googling questions. So glad you mention “don’t do it”. Pinning for future re-reads. Thank you for sharing. <3

  • This is by far the best interview for the very reasons mentioned by other commenters. One can spend a lot of time and money making mistakes as part of the process of learning to run and grow your product business, so it is greatly appreciated when someone shares those missteps and offers real solutions by mentioning sources that have worked. Not all sources will work for everyone, but it’s good to share the names of the companies that do things well and right, just as you would want someone to do about your own company. Thank you.

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