173: Is It Time for a Commercial Space?

Most of us launch our subscription box business from the spare bedroom, the garage, or even the kitchen table. But when do you make the decision to move out of the house and into your own commercial space? On today's episode, I'm talking with Cheryl Hamm, who has been at the crossroads more than once. Come join us as we talk through the challenges she faced as she grew.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams.

Welcome back to the Launch Your Box podcast. I have a triple timer here with me today. This is— this will be her third time to be on the Launch Your Box podcast. And what's so cool about my guest today is that I first talked with Cheryl when she had her very first kind of explosive launch that took her from a couple hundred subscribers to, I think, 800 subscribers or something like that. It was explosive. It was fast. Then I had Cheryl back maybe a year later, and we talked about her growth, and we were talking about how she had been working from her home this whole time. And, and her business is hand-dyed yarn. Can you imagine 800 subscribers, dyeing yarn in your house, and figuring out how to grow? And so I had her back. That was episode 101 if you want to go back and listen to that episode because things have changed. Things have changed for Cheryl. It's been almost 2 years later since that last episode with her, and I thought it would be really fun to have her back again because she's got some great updates. And I think that as we grow into our subscription box entrepreneurship, there's a lot of things that we learn along the way. There's a lot of hiccups, there's a lot of wins, there's a lot of challenges. And I think it's great to hear from people that have gone through those. So if you're going through those now yourself, you might feel like you could relate to Cheryl's story, but I'm just so excited to talk with Cheryl again, to have her on the podcast again. Cheryl, welcome back. Why don't you just give yourself an introduction and do it in a way that where if nobody ever listened to any of our previous episodes, who you are, what you do, and then we'll dig into it.

Sure. So thank you so much for having me back, Sarah. I love chatting with you and talking about my subscription box. So I'm more than happy to be here. My name is Cheryl Hamm and I have a hand-dyed yarn business called Hypnotic Yarn. And my subscription box is called Yarnable. And I started the subscription about 2 years after I launched the e-commerce Shopify hand-dyed yarn business. And that was in 2019. And I met Sarah— you— in 2020, in October of 2020. From the time I had launched my subscription, we probably grew to about 300 subscribers from 2019 to the end of 2020. So almost 2 years maybe like a year and a half, and I was doing everything out of my house like you mentioned. So we were— God love my husband, he is a special man because we did not have a very big house. We lived in a little ranch and it took over every single room, the upstairs, the downstairs, like the bathroom, everything. It was really bananas. And after I met Sarah, we launched again and we did— we doubled. I think we had 350 subscribers at the time and then we doubled to 700 within that like, couple first hours.

It was like a couple days, right? You were ready to shut down the whole launch because you were freaking out.

Yeah, it was like the first few hours I had more subscribers join than I had ever at like one time. And I thought, oh my God, I have to back off. This is too crazy. And you were like, no. You said to me, and I think I say this every time I'm on your podcast, is you said, this isn't happening to you. This is happening for you. And you can figure this out. Like, whatever you're worried about, you'll figure it out. And I did.

Carol, can we pause right there? Because I want people to understand what just happened here. Because sometimes the road of entrepreneurship is a sloth, right? It is slow. It is hard. You're wondering if you're getting anywhere. And if you look like you're— if you look at your first 2 years of being an entrepreneur and really it taking 3 years for you to grow to 300 subscribers, that was probably a pretty steady pace and it was coming in. And then it really took you like literally a day to double that once you've learned the marketing and the strategy and how to properly launch. And so I want everyone listening to really understand that when we do things in the beginning, it's a hard, it's a hard thing. Like it is not an easy thing. It is not a get rich quick. This is not a, I'm going to launch it and I'm going to be a millionaire. That's not what we're doing around here. It is hard. And so being in a group of people that are doing the same things that you're doing, really can change the game for you. And it changed the game for Cheryl so quickly. But if you're in those beginning years and you feel like things are just moving slow, that's how things go. And then something happens along the way, a light bulb switches, an audience triggers, something happens, and you can explode overnight. So if you're in that long road, I've been growing by maybe 5 subscribers a month every month for the last year, keep going because it can happen to every one of us. Okay.

I like to say it was like I was climbing a mountain, right? Like I was climbing this mountain and climbing this mountain and like, but you don't know where the top of the mountain is when you're in a business. It's not like you can just see the top. The top could be tomorrow. It could be in 5 minutes. It could be in a year from now. You don't really know when you're going to get to the top. But when you do, like you said, something happens and then going down is so much easier. Like you're picking up momentum, you're going faster. And I feel like that's exactly what happened. We were like learning little bits and implementing and learning. And then I learned how to launch because I don't think I had done an actual launch before then. I was just selling.

Yeah, we're just selling.

And people would come and then they would sign up and then they would leave. And I wasn't really replenishing people. I wasn't doing anything about my churn. And so then when I would reopen, I would have to backfill like everybody that had left plus get some new people, and it just felt like I wasn't making any progress. Yeah. And so it went really, really slow until I learned how to launch, and then it was like, oh, okay, different. Um, but we're—

so now we have— so now we had 700 subscribers.

Yeah.

You're, you're looking around, and I know you were growing— you grew to 1,000 very quickly after that as well.

Yeah.

And you're like, I can't do this in my kitchen sink anymore, right?

I had a full-time job. I had a full-time sales job up until October of 2020. So the whole time I was also working full-time in like high-pressure sales. So with a family, with kids, a lot. But I also feel like that's why it was okay that it wasn't 100 subscribers the first day I started my box, or two. It was okay that it was slow because I needed to grow. I needed to learn how to do these things, right?

Yeah, yeah.

But then, yeah, and but then it exploded very quickly, and we thought, my goodness, we have to get out of this house. Like, we were packing in the living room. Like, there was— the furniture was just smashed up against the walls. It was bananas. And I knew I needed to start hiring people.

Yeah, you needed help.

I did. And I had a friend who would come help me, and that was great, but I thought, if we're really gonna hire, like, actual people from out in the world, I don't want them all coming to my house. It just— I didn't feel— for me, it didn't feel appropriate where it was really my whole house. So we don't want people walking around and just being random. So I thought, okay, we're gonna find a commercial space. And that was terrifying. And I talked to every single person I knew. And is it— what do you think? Is this too much rent? Is this— what if we can't do it? What if this all goes away? What— I just quit my job and now I'm going to take all my business money and start paying rent somewhere and hire people. And it felt terrifying. Um, which is funny because now I think back to how much I paid in rent for that first commercial space, and it was so little, tiny, such a teeny tiny amount. And I thought, oh my God, that terrified me then. And I think like, what are my decisions that I'm making now that terrify me? What are those going to look like in 5 years from now when I look back on them?

Yeah. So you outgrew that first little space, didn't you?

We did.

How quickly did you outgrow it?

Probably outgrew it Within the first 2 years, we tried to find another space before our lease renewed, and we couldn't find anything around here at the time. So we renewed our lease, but we were— the problem was the space was so small that even if I wanted to grow bigger, we didn't. We just didn't have any room.

You didn't have the capacity.

And now we could hire people, but where could they go? There was nowhere to put them.

This is one tip that I want you to hear from this podcast is when you are looking for a warehouse space, commercial space, workspace, I want you to always get bigger than you think you need. Because once you have room to move and spread out, you're going to grow quicker and you're going to need more space, and you're going to need space for things you'd never thought of before. When I purchased this building that we're in right now, in my warehouse, it was so big and it was so empty, and it was like echoing across the warehouse. And now every inch of it is full of things that we need to make us more productive and grow— machinery, boxes, all the things that we've got going on. It just makes us more efficient because we have more space. So I want you to think about that as you're planning to get a commercial space. Okay, so we're 2 years in, we're outgrowing. Tell me what's going on.

Yeah, so we have had several launches while we were in the new commercial space, and we grew very quickly. We— I think, I want to say, I think we got up to 1,600 subscribers at that point. And it was like we were launching every, I think, 3 months, and we were bringing in like 400 new people every time. And we were at that point backfilling monthly. So this wasn't— we had lost 300 and we brought in 4. We were like really growing. And so we grew from that 350 to about 1,600 in like a year or about a year, about 12 months, which is why we filled up that new space so fast. And then we decided we've got to go. And so we started looking. We signed a lease in the spring of this year on the new space that we're in now. And it is 8,000 square feet. It is bigger than we need, but not as big as I would have thought 8,000 square feet is.

We managed.

We were crammed so compactly into that old space that We really filled up a lot of this new space. We have 2 warehouses, like 2 loading docks. We have offices. We just, we have all the space to spread out and have everybody has a place and everything has a place and it's amazing. But we really only finished our move like last weekend.

Okay.

So it took us quite a while to actually like transition the whole thing. We did a full outfit. We did like full plumbing. We took walls down. We built a lift system to get to the upstairs. Like We did a lot of work, but the good news is we weren't super rushed because we had this other space. But I was terrified to rent this space because it is quite a lot more than our current lease, and we had to carry our, our old lease for a while as well. So, so once again, I was absolutely terrified. And one thing I was talking to a friend that I feel like I learned in this process is that scary doesn't always mean bad, right? Like, I feel like our prehistoric brains think if something's— if we're afraid of something, it's protecting us from, like, danger. But what I've learned as a business owner is, like, I'm afraid of a lot of things. There's many decisions that scare me, but all it means is that it's scary. It doesn't mean that it's bad or that it's the wrong choice.

And I always say, Cheryl, if it doesn't scare you, you're not dreaming big enough.

Yes.

Uh-huh. And so if things just feel easy, you're playing too small. If it doesn't scare you, you're not dreaming big enough. So I love the fact that this scared you because that meant it was— it's a big deal, it's a big dream, it's a lot of logistics, right? Yeah, like you've got a lot. You've got more overhead, you've got more inventory, you probably have more employees. Like there's a lot, there's a lot going on here. And when we're small and we only have to depend on ourselves and we only have to pay our own mortgage and not other people's mortgage that work for us, things don't have to be as big and bold and scary. But now we're responsible for other people's livelihoods, along with some more bigger expenses on our part. And that does feel scary.

It does. And I think every time you change something, or at least for me, I have to learn like a whole new process on how to do anything. So like the way we did things in my house was different than the way we did them at our smaller space. In our smaller space, we didn't have a loading dock. We just had a door. We had to break pallets down outside, like in the winter, in the snow. Just the whole team came out and we like huffed it all and it was terrible, but we did it for years. And now our local post office can't handle the number of deliveries because we're in a new town.

Okay, let's talk about this because you mentioned to me in our pre-interview stuff that you had to work with the post office differently.

Yes.

And so talk to me about what's been different as you've had the growth, because there are a lot of people in our community that have challenges with their local post office. And it doesn't seem like— to me, it doesn't seem like there should be. Like, they should want your business, right? They're going— they're getting guaranteed recurring revenue from you, just like we are from our customers. Why wouldn't they want our business? And why wouldn't they work hard to take care of their customers, us? But we don't find that's that's actually true in a lot of areas. So you moved to a different town. So this space is in a different town, right? Okay, so talk to me about what happened with the post office.

So the post office was picking up from us. They were coming and doing a pickup just for us, and they had these big vans, and they would come with an empty van and take all our packages, and that was great. This new town, they are— it's small and they don't have these vans. All they have is the little local post truck, and they had The first pickup we did here, I called them before and I let them know, hey, we're here, we're this business. This is what it looks like when you come do our pickups. Are you going to be okay? Do you need anything from us? I always try to reach out and make sure I don't want to surprise anybody with all these packages. And they said, no, it's fine, it's fine. They tried to do our pickup and I think it took them like 4 hours of somebody loading up that little mail truck and driving back to the post office and coming back. And they were like, this isn't going to work for us. And And I'm like, yeah, it's not going to work for us either. And then they wanted us to schedule daily deliveries or pickups rather. And I'm like, we really want everything to go out at the same time because our packages are mysteries and we don't want everybody just getting it at random times of the month. Something very interesting happened. And this all stemmed from a meeting that I had at Sub Summit a couple of years ago with the post office. They were there, they had a booth, and I talked to them and they said Oh, did you know we have reps? We have local reps. And I said no. And they said, we'll have your local rep reach out to you. And I said, okay, great. And they did. And I never followed up. Just never followed up. This whole debacle was happening and I sent an email out to this guy who I had never met and I said, hey, this is our situation. He said, oh, let me come right down. And he did. And let me just tell you, if you have a certain amount of packages that you ship out every month, Not everybody qualifies for a local rep, but if you do, it is the best thing you could ever have with the post office because you get a different level of service. You get like an individual person that helps you. But also like we have a dedicated customer service line that is not your normal customer service. If packages go missing, like anything, like they call you, they follow up with you. Like it's very different than dealing with the normal post office. And they do not advertise that this is an option. So I asked my rep, hey, like, how do people get like you in their area? And he said, you have to call the 800 number and tell them you want to meet with your local rep and then they'll decide if you qualify. So I would just throw that out there that it's definitely worth doing. Yeah. So they ended up setting up a different pickup. It's a third-party contractor that picks up from us now that the post office pays for. And they bring us all of the equipment that we need. We have like a special ordering system for these pallets and they call them Gaylords or these like huge boxes. And they come, they deliver them, we set them up, we put all our packages in, then somebody comes on like a big freight truck on a scheduled day every month. I don't have to schedule it constantly with them and they just come and take them all away and then they do it again next month. And it's so much easier.

That's amazing. I love that. Yeah, I don't even have that. I've been shipping most of mine FedEx, but we've been shipping a lot post office lately because the FedEx rates have hiked really high. So I'm definitely going to have to look into that for us too, unless we go back to FedEx or UPS. Yeah, so that's amazing. Tip from Cheryl: reach out to the 1-800 number on the post office and ask if you can talk to a local rep. And see if you qualify for having a local rep. That's something really good. That's very valuable.

Yeah, if I need to do anything, he just comes right down to my office and sits with me at the computer and will walk me through how to do things.

Like, and how does he live in that town that you live in?

No, he lives in the state over. Like, so I'm in New Hampshire, he's in Massachusetts. So I think it's like a regional.

Okay, a girl from Texas, we don't just have people come over from the next state over because Texas is real. So how far is this person from you? Like, give me a—

he's probably like 45 minutes.

Okay, 45 minutes is not even the next town over in Texas, okay, let alone another state. I love it. I mean, it takes me 9 hours to get to South Texas, let's just be honest. So you have to put this in quantitative analysis for my Texas brain here. That's really cool that he is willing to just jump in the car and come handle things. Yeah, yeah. Okay, so we're in the bigger space, we've got shipping figured out. It's clockwork. It's easy. It's no longer a hard thing that gives you heartburn every single month. Talk to me about what else has been a change in your business.

Yes. So we've had a lot of changes with employees and hiring, and that has been— it's been interesting. I've learned a lot. It's been a little rough, but we So we were a team of, let's see, 1, 2, 3, 4, I think 6. We're like a team of 6, I think 6 or 7. And we had 2 people leave in the spring back to back. They gave their 2-week notice back to back that we weren't expecting. And then another person left just this, like, I don't know, a month ago to go to college, like a cross-country. So everybody left for good reasons, nothing bad with that, but what I realized is we were really running very like lean and mean, right? Like we didn't have people that were just sitting around. Like we were still at max capacity with the people that we had. And so when they left, it really hurt. It hurt very badly. And we had a hard time hiring. And part of that was because I hadn't figured some things out yet about how to get the word out and how to— because my audience is worldwide. We're not a local like store. So, I had to figure that out. And also, it was bad timing because I think we work part-time hours like mother's hours basically. And our employees generally come to us when they have kiddos that have just reached school age. And now, all of their kids are out of the house and 9 to 2:30, 4 days a week is like a perfect schedule for them. And we were hiring in the spring going into summer. And nobody I think was going to give up their last summer with their kids right? And so we couldn't get anybody for these couple of months, and it really hurt. But like, we had no interest when we put the word out in the spring. However, we did just do it all again about a month ago, and we had, I want to say, like 20 applicants. So it was like such a huge change. Um, we posted on Indeed, we ran an ad this time to our help wanted Nobody that we interviewed had ever heard of us, whereas before it was all coming from my audience, which I think is good. It's a great place to start. And when I did it that last time in the spring, I guess I didn't realize that's not the only way and that there's other ways besides just the people that know me. Like, I can branch out. And so we did, and we hired— we just hired 2 people. So one just started and the other person's starts tomorrow.

Awesome. Yeah, awesome.

So we're excited.

Like you're getting through all of the challenges.

Yeah.

So what's next for Yarnable and Hypnotic Yarn? Like, what's, what's next?

So for us and where we were headed before we lost these employees was we were really doubling down on our Hypnotic Yarn Shopify site, the non-subscription side of our business. We were growing that to like multi-six figures from really being very low because our focus had been on the subscription box. But then we lost the people. All of our momentum kind of died with that. And but what we did instead, which I thought was really great and something that I feel like there's always a lesson to be learned, right? Even when things aren't going our way, we ended up doubling down on what we do really well in subscription and applying that to our non-subscription website, which is doing these one-off kits, these one-off really fun sets. So like tomorrow we're launching— you can see, uh, you're listening, you can't see it, but I have all these Halloween decorations behind me.

What you— yeah, what you can't see is it looks like Halloween threw up behind her. It is everywhere. I love it.

We're doing a Halloween knit-along, and we took pre-orders earlier in, uh, the spring for this, I think back in like April. And tomorrow we're going to kick it off with a Facebook Live and everybody, we have a pop-up Facebook group and they all bought these special kits from us. And we're going to do this mystery knit-along where every week they knit a very specific piece of a pattern. They don't know what it's going to look like until the end of the month. We're doing a lot more things like that where we're creating these like really cool experiences for our customers, but selling them as a one-off product instead of as a subscription. And I think that. Has been a game changer to realize, wow, people really love that from us and we already know how to do it and we already have the resources to do it and the contacts and the connections.

And you can do it on the off weeks that you're not fulfilling the subscription. So I love that too, because like for us, we're really busy the first 2 weeks of the month and then we're like hanging out and we're fulfilling an order, daily orders, but really not enough for everyone to just stay busy until we start prepping the next subscription. So we have this weekend in the middle of our month that we're— it's low-key, but that's where we could really put something to maximize a lot of things. We can maximize our sales, which also helps with cash flow, which also helps with overhead, which also helps with payroll, right? So if you have like— it's like, I don't know if you watch Bar Rescue, but he talks about when he goes into these bars that are just failing they have to maximize their open hours, right? You're going to have to pay that rent to that warehouse or that facility no matter how many hours you're opening. So if you can maximize what you're— what's coming in, that will— your fixed cost is there. It's not going to change. So all we have to do is change the amount of revenue that's coming in to help us cover all those fixed costs. And I think you found a great way to do that here with the one-off kits. And what those one-off kits are going to do is they're going to help convert to subscribers because we know one of the biggest ways to convert someone to a subscriber is for them to get a package from us, to love it, to have a good experience with that, and then they're going to want it more and more and more, right?

Absolutely. Absolutely. And I think that's why we've done so well. Like our current subscribers know that they already love what they're getting and so of course they're going to buy it. And then the people— and then it generates this buzz and the people that didn't buy it like last year are now like, oh my God, I need to try this. And they're buying it and then converting over to the subscription. So it's like this, it goes both ways. It's flowing both ways. And it's been really great. So yeah.

Cheryl, what advice would you give for somebody that's listening? Maybe they're at a point where they just got to get out of their house, they need space, but they're at a point where you were terrified of the additional commitment and cost. What advice would you give them?

So I think that with a bit of planning, like, we can mitigate some of the risks, right? And I think that just if you're a business owner, you're already taking risks. And so there's always going to be some amount of risk. We're never going to not have that in our lives. But I think we can do a bit of planning, we can mitigate those risks, and then we just need to get comfortable being uncomfortable. Like, because you're just going to be uncomfortable all the time. And I feel like if you can just get right with that feeling, it makes those decisions a lot easier because you separate— like I said, that feeling of fear doesn't mean it's bad, it just means that it's new and scary and it's fine to move forward. So we have to have a little bit of faith in ourselves, right? Because we don't do things that we don't believe we can accomplish. If we don't think we can accomplish it, we're not going to do it. So we have to have that faith. We have to get comfortable in that, like, awkward, scary feelings that we have, and like, and just do it anyway.

And once you get yourself into the new situation, for me it was like it opened up all of these new possibilities. Like, when I would walk into my warehouse, it's big, it's vast, but I just felt like I had the freedom to do whatever I wanted because now I had space to do whatever I wanted. And it was like this newfound freedom to just go all in with whatever I was doing. I think when your, your home is filled and you have stuff everywhere, it feels like it's closing in on you. So you don't— it's a different feeling when you're walking into this space that, okay, we can do more, I can have more, I can produce more. And I think once you get your mind out of, okay, there's stuff everywhere, I have no more room for anything, to I have room to do whatever I want, it's a game changer for you.

It really is. That is so true. It really is.

Awesome. Cheryl, it's so good to catch back up to you. Let's not let 2 more years go by before we do another episode update. Good luck on your launch tomorrow. I'll be watching as always, and thanks for coming by and chatting with me again today.

Thank you so much, Sarah. It was awesome to be here.

All right, we'll be back Next week with another great episode. Thanks for joining us on the Launch Your Box podcast. If you're looking to grow your audience, head over to launchyourbox.com and grab the 10 Steps to Help You Start Building Your Audience guide. It's packed with practical tips to help you connect with your future subscribers. Until next time, keep launching and growing on your subscription box journey.