For Dubai resident Cholpon Djusueva, skills like saving and budgeting money were gained back when she studied in school in Kyrgyzstan, when the landlocked country in Central Asia witnessed the split of the Soviet Union in 1991.
Her family faced multiple challenges in those times, but her parents involved her in money-related planning and were transparent about the routine money management process.
This entrepreneurial tale starts by saving for studies
"My father involved me in creating the budget for my university tuition fee. He would give me a certain percentage of his monthly salary for my education," she shared.
“My first experience with money and budgets set a basis for my business when I learned that careful planning makes 80 per cent of your entrepreneurial success.” Djusueva launched an organic skin care and hair care business, Foxyskin, in 2020.
Learning to manage money early is key to starting a business
Although money management isn't part of the curriculum in the education system, Djusueva considers it essential for schools to teach financial management basics to children to help them learn basic monetary techniques, planning and understanding basic profit and loss statements (P&L).
"It will equip the new generation with the basics to manoeuvre better in the future," she added.
Start-up fuelled by passion for sustainability, minimising plastic
With a passion for sustainability and minimising plastic usage when it comes to skincare, Djusueva’s business goal was to ensure personal care products carry little to no plastic content and have only natural ingredients, which ultimately benefits the user and the planet.
Here is how she ventured into the entrepreneurial journey using her service industry experience to pursue a career in the cosmetics industry that offers planet-friendly products.
How did you set up the business and fund the venture?
"The business is fully self-funded, wherein the initial investment of Dh450,000 came from my personal savings that was accumulated over my near 20-year-long career,” Djusueva revealed.
The cost to set up Djusueva’s type of business required different types of permits: licensing fee, accounting software, the products registration fees, utilities, accounting and bank expenses; all this accounted for 20 per cent of the business’ initial capital.
"Then for the legal aspect, the expenses include all related costs to our main platform (from set up to payment portal), which cost us an additional 20 per cent of the capital. The second type of expense is operational: cost of goods to acquire, personnel cost, rent, marketing etc," she further detailed.
Here are three tips she shares from her journey of being an entrepreneur.
Tip #1: Examine and control inventory flow to regulate money spending.
"We had to be careful about spending our funds during the initial stage as a product business is a capital-intensive business. Hence we had to take control of our inventory first," Djusueva revealed.
"We monitor the inventory flow using a perpetual inventory system where all the items are registered online and sold items automatically check out of the system.”
Djusueva also performed ABC analysis every three months to identify any movement in the stock and prioritise the slow-moving inventory etc. That's how she eliminated waste and controlled their spending in the long-term run.
Tip #2: Ensure to spend some money on educating the customers about concept and product.
"We started our business in a market unfamiliar with the concept of organic skincare because we felt that this industry of clean beauty and premium organic skincare was still an untapped market,” added Djusueva.
This is why Djusueva spent the most significant part of their efforts and costs on educating the customers about the business’ concept and their products, which required time and more focus on marketing strategies.
"Nowadays, the focus of our expenses is on marketing activities, and we have a few pillars here: brand awareness activities, capturing market share strategies, and products knowledge education."
How did your service industry experience help your entrepreneurial venture?
"I started working in 2002, my first job was at a Netherlands-based airline, and I was hired as a sales agent. Back then, all the airline systems were manual. We used to issue tickets, calculate taxes and fares manually and do daily sales reports.
"There were no easy-to-use tools in 2003, so we used a good old excel table to report. I still use some of those excel templates to make sales projections for a specific brand. However, many processes are automated nowadays, and we use different accounting software in our daily operations.”
Djusueva uses accounting software package Quickbooks as the business’ accounting system now. “However, once we grow bigger, we'll look into more sophisticated systems such as data processing software SAP," she added.
From managing beauty shops in Afghanistan to setting up her own beauty business in Dubai
"My career in the beauty industry began in 2009 when the US Department of Defense deployed me to manage barber or beauty shops in Afghanistan. It was a service business with different requirements than operating a barber or beauty shop in the UAE.
"One of the golden rules in a service business is taking care of the employees, as they take care of your clients. We had a very rigorous training program for our employees to make them comfortable working in a new environment. However, it gave me many insights into operational costs: employees’ salaries, supply chain and logistics, transportation and documentation expenses, and goods and logistics costs."
Djusueva moved to Dubai in 2014, where she worked with different organisations between 2014 and 2020 until launching Foxyskin in 2020.
“I worked in the medical field and was quite lucky to join a new start-up. A start-up is ideal if you are eager to learn about business because you must take over many roles and responsibilities. And here, I had the hands-on experience to manage P&L (profit and loss), ROI (return on investment) analysis etc. It gave me a solid base for setting up my current business, learning how to fund a business and projecting the funds required to run it successfully."
Tip #3: Have a well-planned forecasted budget for your business right from the start
Djusueva considers one primary challenge in setting up a business is going beyond your anticipated time. "Sometimes, it requires more time to get things done and usually, those are circumstances out of our control, which would cost you money."
"For example, it took us longer to set up a bank account than we'd anticipated. Because of that, we had to push back many things we had planned at that period. But it was a good lesson for us, and we were able to concentrate on the products registration, market research and establishing the marketing campaigns while getting the basics right."
Therefore, a well-thought-through forecast is vital for your business. Djusueva made sure she had ready funds available to run a business for the first year, at least. Djusueva has also done a three-year forecast for her business, strictly adhering to it. “That's our main rule."
Tip #4: Proper cash flow planning, quick adaptability to finance vital in managing business operations
"A product-based business requires more capital than a service-based business, so cash management is vital," she said.
"I have a straightforward formula: 80 per cent for spending and 20 per cent goes to saving accounts. Eighty per cent is usually spent on acquiring new products, marketing and operational expenses.
"Sometimes it is challenging to see the entire picture clearly, and you might have unexpected expenses along the way. However, proper cash flow planning, flexibility, adapting quickly and re-adjusting your finances is the way to go forward," explained Djusueva.