What I learned from my first business experience

Founding a pop-up company with 5 other students at school was a challenging yet valuable experience. Looking back, many things could have been done differently to make the business more successful. In this post, I would like to share my personal experience as the founder and also the CFO of a student start-up, selling cookies.

Finding a producer

Our first question was — how do we produce? Should we produce ourselves or pay somebody to do it for us? Estimating the amount of cooking and the work, we decided to find a producer. It was challenging in the beginning, as most of the bakeries offered a very high price. Fortunately, an acquaintance of our teammate was a baker at a farm, and she was willing to bake the cookies for us. It was a win-win-win, as the price was relatively low, the ingredients were high quality, and by ordering from her, we were supporting a local farmer.

Selling

Our main selling spots were the Christmas markets, but we were also actively selling our cookies at school. Approaching the customers directly helped us to sell, while the stands of our competitors remained quiet. Passing people usually stopped to listen to the stories about our cookies, and 80% ended up buying.

The flop

The first big selling weekend, we ordered 600 cookies and were waiting for the day of packaging. We arrived at the farm and… oh my God. Half of the cookies were hard, melted in the oven, and looked like squares. We had to leave over 100 pieces there and stay with the remaining ones, trying to hide the fact that the shapes were all different. It was a stressful and disappointing moment.

The bank

There were several difficulties with the bank, causing the opening of a bank account to take 2 months. In the meantime, we had to manage payments privately, which made bookkeeping messy and complicated. This shows the importance of choosing a good bank:)

Mistakes that have cost us profit

Not having a written production contract

The first production ended up being 2.50 CHF per cookie, and we were expecting the same, if not cheaper, for bigger productions. However, the actual bill turned out much higher.If we had a contract with the consequences of failed production, we could have minimized the loss from the first high-scale production. For example, the producer would have been obliged to pay for the unsold cookies and for the discount that was necessary in order to sell.

Not calculating the quantity discount precisely

Our quantity discount was higher than we could afford, especially after seeing the real production costs. This brought our profit down to often 30 Rp per cookie.

Planning

Planning more time before the first Christmas market weekend could have given us the chance to replace the spoilt cookies by new ones. Also, it could have helped us to avoid the stress of packaging, as it took several hours to package around 450 cookies.

Conclusion

Although we had many obstacles, we managed to sell over 1000 cookies and generate a win. This shows that mistakes can be turned into valuable experiences that last a lifetime.

And I’ll definitely take these lessons with me into the future.