Turned a hobby into a profitable business 

Delfi.lt, Izabelė Bočkienė 

2024 09 12 

What does it take to start a successfull business? A solid start-up capital, a team of professionals and a well-thought-out marketing strategy may seem like the most important. However, the story of Laurynas, the founder of Soyacandles.lt, is slightly different. He and his wife Egle started making candles almost 10 years ago. In the beginning, the couple did it in their spare time, in the evenings and on weekends, and gave the finished products to friends and sometimes sold them.

"We've been slowly building the business, but the e-shop we launched in 2015 wasn't really very successful. We sold candles online, and then we offered candle-making supplies - wax, wicks, utensils, paints - to customers. We were just selling surplus raw materials that we didn't need," says L. Salys about the start of the business. However, things changed dramatically during the coronavirus pandemic, which "trapped" people from all over the world in their homes. People started looking for interesting activities they could do without having to go out. Making soy wax candles proved to be an interesting and addictive activity for thousands of Lithuanians. The family business started making a solid profit in just a few months.

What is the secret of the success of the business that Laurynas runs? What are the challenges facing e-commerce today? Why is he convinced that a unique idea alone is not enough in business? He agreed to talk about all this.

Sometimes they received just one order a week 

Until the pandemic struck the world, Laurynas and Eglė worked for hire. Selling soy candles and candle-making supplies was not really enough for the family to survive, as they had only a few orders. "For example, we used to get one order a week, and it would come from our friends, colleagues or acquaintances. We didn't buy any advertising and we didn't advertise the online shop itself. Word of mouth spread about our products and candles. Over time, the range of raw materials in the online shop grew, and we no longer produced candles for sale," says Laurynas. Back then, he recalls, there was a lack of information on the internet to make a natural soy wax candle at home. However, he and his wife did a lot of research into the whole production process and continued to look for high-quality candle-making tools in their spare time, which they offered to others.

Everything changed in just one night 

Laurynas tells us that customers started buying soy wax for candles in their online shop in autumn 2020. "It seemed like everyone had closed their homes and started making candles. Even though we didn't buy advertising, the page got a lot of customers naturally. It became a bit of a challenge - we were getting a lot more orders than we could handle in a day. This resulted in a queue of orders that took up to 5 working days to prepare. We also had to review our raw material warehouse and stock levels, as we were running out of products much faster than we could get them from our suppliers," says the entrepreneur. He is happy that they eventually understood the nuances of seasonality and learnt to prepare for the peak sales season in advance.

Expanded range and earned the trust of customers 

The online shop of Laurynas and his wife Eglė was "born" out of their love for soy wax candles. They have always been interested in high quality soy wax, which is made from soya beans. "This wax is biodegradable, completely degradable in nature and free of impurities harmful to the environment and human health. And while soy wax candle-making raw materials are the main part of our e-shop, we also carry ingredients for home fragrances, soaps and perfumes," he says. The entrepreneur stresses that their selection of candle raw materials includes only quality and certified waxes and other products.

"We try to be sustainable in many ways - we work with solar energy, we use mainly paper for packaging, and we sort all operational waste. We also donate part of our profits to charity, support NGOs and social projects," says Laurynas.

He is happy because customers appreciate their efforts and come back to shop again and again. He believes that what sets them apart from other businesses of their kind is that they dispatch orders very quickly, respond to queries quickly and help customers solve problems without delay.

Small businesses face a variety of problems 

And while Laurynas and his wife Eglė's business is doing well at the moment, he says that e-commerce businesses face a variety of challenges. "I would single out the increasing competition in e-commerce. It is becoming easier and easier to open an e-shop and sell any product that might be of poor quality. The owners of such shops may not provide any advice and may not take any responsibility. This makes it challenging for businesses that want to be the cheapest but ensure quality to compete", he shares. 

Small businesses also find it difficult to raise working capital, he says.

"Although we often see advertisements that funding is available, the reality is unfortunately not so simple and beautiful. We are also dealing with state bureaucracy. Small businesses are often unaware of the many requirements regarding packaging management, taxes, different VAT rates for different countries and so on," says Laurynas. The entrepreneur also points out that small businesses usually do not have lawyers or tax specialists who are familiar with the relevant areas. Managers of such businesses have to be knowledgeable in many different areas.

Take the opportunity to seek professional advice 

One person cannot know and understand everything. Laurynas is convinced of this and took the opportunity to consult Swedbank experts about his business and thus learn more about financial management. "Financial knowledge is definitely important. You need to be able to calculate not only how many euros you earn by selling a specific product, but you also need to be able to factor in logistics, advertising costs, fees from paying agents and so on into the cost of the product," he says. 

Small entrepreneurs need to understand how taxes are calculated and how to manage cash flow properly, he says. 

"Knowing finances prevents painful mistakes. When there are no mistakes, you can start thinking about sustainable business growth. During the coronavirus pandemic, our annual sales growth was 250%. Knowing the finances during this period helped us to organise the process and work out when and what payments had to be made, when they could be postponed and so on," says Laurynas.

Professionals helped balance cash flows 

The entrepreneur is glad he took the opportunity to see his business from the outside. 

"Swedbank's consultancy helped us to balance our cash flow between the peak season and the summer period. The bank's representatives offered us some practical tools, as well as reminded us of the well-known, but already forgotten, key financial indicators of a business, their meaning and analysis possibilities. The specialists helped to assess the profitability of groups of goods, which helps to make the right decisions on the necessity and quantity of goods", - says the interlocutor. 

The most important thing is not to be afraid to ask questions during such consultations with professionals, he says. After all, consultants have no intention of hijacking the business. Their mission is to help you grow your business.

Read the original article at delfi.lt.