Business plan, website creation, first successes and cash flow management... Elsa Madjar, Founder and President of the e-shop “Les Trouvailles d'Elsa.fr”, shares her entrepreneurial experience and tips on how to manage growth.
Elsa, tell us about your business and what lies behind the site www.lestrouvaillesdelsa.fr ?
“The idea behind the site is to find designers or items that reflect our current fashion desires. It's an online boutique for fashion accessories that offers a cutting-edge selection, with exclusive designers.
Les Trouvailles d'Elsa.fr started out (7 years ago) as a shopping guide, featuring the season's must-haves and a few ideas for new looks. It was only after being asked by my friends to go on shopping sprees - they thought I had a great eye for the pieces they couldn't find - that I came up with the idea of sharing it with a wider audience. In other words, to put all my finds online.
A year later, Les Trouvailles d'Elsa.fr became an online boutique. But I still limited myself to accessories. So the idea remained the same: to find the season's leading accessories.”
How would you explain to a young entrepreneur/creator of an e-commerce site what it takes to embark on such an adventure?
“You have to have courage, believe in yourself (without listening to the naysayers) and tell yourself that you're going to have to put all your energy into it.
Next, we need to try and identify the challenges at 6 months, 1 year and 3 years.
To do this, it's important to be able to rely on a Business Plan, challenged by family, friends and loved ones. And, ideally, by several profiles: entrepreneur, salesperson, financier...whatever happens, this BP will probably never be realized, but it will give the trend and, above all, help build the financing plan. And so be able to put the right financing in place... ”
Anticipating cash requirements
“To anticipate cash flow needs, it's ideal to monthlyize your business plan for the 1st year. Particularly for a highly seasonal business like mine.
December, January, June and July are the most important months in terms of sales and cash flow. But the success of these months does not mean that you can live the rest of the year at ease: you have to anticipate the impact of VAT, the first instalments to be paid to suppliers at the January trade shows... etc. Note that I am one of the only sites that buys merchandise from suppliers, and not a market place/deposit site that only pays suppliers if a sale is made.
The difference in cash flow is significant...!”
What have been the key milestones since your launch 7 years ago?
“A 1st version of the site developed at low cost and with only a few brands (Aime, my historic brand). This allowed me to test the idea, the concept and validate certain hypotheses of the BP. It enabled me to get off to a slow start, even though I'd just had my 1st child and wanted to take care of him. When the concept showed conclusive results, a new version of the site was developed, more professional and much better referenced. The effect was immediate and growth was significant over the months of November, December and January (almost x2).
At the same time, I selected many other brands, increasing the choice while the media began to relay my selections. Note that Les trouvailles d'Elsa was the 1st site to be launched in this niche.
1st challenge: financing growth
The difficult part of this growth: it had to be managed and above all...financed. I got a much better grasp of a strange financial acronym: WCR... I then surrounded myself with competent friends and finance professionals who helped me on the subject. I also had a cash flow monitoring dashboard built and special extractions set up on my platform.”
How have you managed your cash flow?
“In my case, WCR management is also a 'must-have'...we need to be able to control it and steer it to enable us to manage growth well.
With customers paying cash, it's important to buy well and keep our expenses under control. Having a cash flow forecast, in addition to a monthly operating budget, has helped us a lot. Nonetheless, you still have to juggle growing cash flow needs, the deposits required by landlords if you want office space, and the reluctance of banks to lend you money as a young entrepreneur... in short, you have to know how to steer your business properly if you don't want to find yourself in a cash crunch.
Inventory and purchasing management therefore become crucial in this context...and this is surely true for all companies in the sector, whatever their size... ”
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