How I Built My Subscription Box Business from Scratch

Good morning, happy Monday. I am back from kind of a crazy week of traveling, um, so we're going to talk a little bit about the beginning stages and the messy middle. And the truth is that really, um, it starts from your kitchen table. And I was having a conversation with my fiancé yesterday, and that's what sparked, um, today's live, um just about how things got started. And I kind of shared with him about my beginning, and he was like, people need to hear that, people need to know that. So we're going to talk about that today. Really, it's like from the kitchen table to building a multi-million dollar subscription box business. So we're going to talk about that today. I'm going to pull back the curtain for you today, and I want to really— I want to— I want you to participate in this live today. I want you to tell me where you're at on your journey, because we're somewhere in the stages, the messy middle, or we're feeling some sort of success right now. And I want you to understand that a lot of you see me at this stage, but you didn't see Sarah 12 years ago. And so we're going to talk about that today, and I'm going to give you some— I'm going to give you some tips today to go along because I want to make sure it's actionable for you. I'd love to say hi to you in the chat if you are here, whether you're watching me over on YouTube or or Facebook, let me know that you're here so I can say hi to you. The team is also in the chat with me this morning. Good morning, Wanda. It's good to see you. I see that Dana's here. Good morning, Amanda. Hey, Meredith. Good morning, everybody. Good morning. They're here with me on YouTube. They're here with me on Facebook. They're all over. They're all over the place. Good morning, Carolyn. Good morning, Sue. Good morning, Shakira. Good morning, Chantel. Good morning, Kara. And I see Elizabeth is here. 3 weeks in, Elizabeth. Let's, let's talk about it because, girl, it's going to feel painfully slow for a little while. And I'm going to talk about that with you today. So I want to start by just kind of cueing you into that conversation that my fiancé and I were having last night. He was showing me a picture on his phone. And it was of a friend of his, and it was this line around the parking lot of his food truck. And he was telling me about— he said, I used to literally go to this man's house and buy a plate of food. Like, I, I'm so proud of him. Like, to see his food truck wrapped around the corner of this parking lot, like, there were probably 100 people or more in line for his Mother's Day whatever he was doing for his food trucks. And I said, you know, that's, that's kind of how I started. I was making door hangers from my kitchen table, and people would come pick them up at my house. I was selling them on my Facebook page, and people would just show up and pick up their door hangers from my house. And that's literally how we— I started this business. And I talked to him about how Um, it was that situation. I was just— it was a side hustle for me. I was still working my 9 to 5, and I was making, you know, $30, $40 apiece on these door hangers that I was making. And it was good money. Like, I didn't have extra money then. Like, we talked about this time, like, this period of my life when I would go to the grocery store with a calculator because I only had a certain amount of money in my wallet, and I couldn't afford to just buy whatever I want. Like, we go— I go to the grocery store now, and I can just buy whatever I want, right? It was— it hasn't always been that way. And, um, when I started this business, I was definitely like the calculator at the grocery store kind of girl, um, and I was just trying to make some extra money. And then I also told him, you know, how I— how it propelled me. So I signed up to do a vendor booth at a Christmas show, and it was $550 for this 10x10 booth, and I didn't have $500. Like, $500 to me back then was so much money that I couldn't risk. I didn't understand the ROI I was about to have on that booth. And so what happened was another, another small business entrepreneur and I, we went in and halfsies on this 10 by 10. If y'all have ever been in a 10 by 10 booth, it is the smallest dang thing. Can you imagine halving that with somebody? But we didn't know any better. We didn't, we didn't have $500 laying around that we could just invest in our business at that time, or even know what the outcome of that $500 was going to be for us. But I'm telling you that that $500 changed everything for me. So we signed up for this booth. I was making door hangers, I was making frames, I was teaching a painting class at this event. And so I had just hoped that I could get people from the class to my booth to buy a frame or a door hanger from me after I taught this class at this event. And, um, and the week before, the person I was going in halfsies with said I'm sick, I can't do this event. Um, my half is already paid, but you're gonna have to fill the whole space. And I was like, oh my goodness, I don't know. I was nervous and I did it. And that weekend I made $5,000 and, um, that was it for me. That's what sparked my entrepreneurial spirit. I really didn't have that before. I had always worked for another company, um, and I— that was it for me. And I started my business legit immediately after that. I ended up getting my first brick-and-mortar location 6 months later. I'd used the money I'd made for that weekend to invest in having a location. I had been working at my kitchen table, and I was still working my full-time job, all even while I got my, my, um, even while I got my first retail location. And so, um, I want to share this with you because I know some of you are still in that beginning stages, and some of you can't afford that $500 booth rent. I was there too, and I want to take you on this little journey with you today, um, about what you can't see right now and where this journey is going to take you. I didn't start with a team of 16 people. I started with me. I was everything. I was the shipper, I was the customer service, I was the designer, I was the person that checked you out. I was everything. And a lot of us start that way, okay? I didn't have a warehouse. I had a kitchen table, and then I rented a tiny 600-square-foot location, and that was my first real place. And it was shortly after I opened my brick-and-mortar store, my little 600-square-foot location, that I became busier and busier. And I want to show you this little graph, okay? I want to show you, um, what growth takes, how long it takes, because I think you need to see it. Because like Elizabeth told me when we first got started, I'm 3 weeks in and it's painfully slow. And then I'm going to give you some tips that I've learned along the way to help you accelerate, accelerate your growth a little bit faster. Okay, so I'm going to pull this graph up really quickly because I want to share this with you. Um, okay. We made this little graph for an event I was speaking at last month in Denver, but I just wanted to pull, I wanted to pull a couple slides out because I think the visual of this is so powerful. And I'm gonna also just like backtrack just a little bit here. You're seeing 2015 on this graph, okay? And I've gotta take it back to 2013 because that's when I started my business. 2013. I started from the kitchen table, and that year I made $19,000. Y'all, $19,000, it was so— is so much money. I made $19,000 in 2013 as a side hustle for my 9-to-5. Do you know what $19,000 did for my little family? I have little kids. It allowed us to purchase things that were not everyday, like, you know, not everyday groceries and clothes. Like, I could now purchase things. I remember buying my kids a season pass to the water park here in our town, and that was a big deal because it was a lot of money to me. I remember us going on vacations where we couldn't really go before. $19,000 was so much money to me, and it just allowed me to relax and allowed our finances to not, you know, just hurt us so much. Like, we were living paycheck to paycheck, and we had great jobs, um, but it was just one of those things that you get in this rat race of living paycheck to paycheck. So $19,000 to me my first year of business had me hooked. That included that $5,000 I told you I made in that one weekend. So for the rest of that year, I only made $14,000, and then I made that $5,000 in a 3-day time period, and I was Okay, something is here. I can do this. 2014 is also not on this graph. Um, in 2014 I made $32,000. I'm still working my full-time job. I'm side hustling it. I'm working at night after the kids go to bed. I'm working on the weekends. Sometimes I would get up early in the morning, um, before the kids would go to school, and I would work for a few hours, get them ready for school, get them to school, change, and get ready for my 9 to 5. But I was hustling and I was dedicated and I self-motivated. And I did $32,000 in 2014. And then 2015 happened. And, um, and this, this changed for me. I've got the brick-and-mortar store open now. I opened that in mid-2014. It's the little— it's— I called it a closet. It was so tiny. Do you even understand what 600 square feet is? It's not much. And so, um, I pay like $500 in rent and opened that store and I was my only employee. So if I went to grab lunch or if I had to go to the bathroom or if I needed to pick my kids up from school, we were closed. And that's how I ran that business. And, and it was fine and it was great. And then 2015, I made $75,000 and that was more than I was making at my 9 to 5. And that's when I knew, okay, I've tested my idea I've made income from my idea. Now my, now my idea has made more revenue than I make in a year at my 9-to-5 job, and it's time for me to go all in. 2016 comes along, and I open a bigger, a bigger brick and mortar. I open up a 4,000-square-foot brick and mortar store, and I almost double my revenue at this point. And so you can see right here that I did $142,000, but now you're looking at— I have a lot more costs, so there's a ton of overhead. Um, Wanda said, is that cost or profit? This is just revenue totals. Okay, um, I'm highly profitable when I'm working off my kitchen table, and that was something that I had to really adjust when I went to the brick and mortar because now I have this overhead expense. Now I have rent. Now I have utilities. Now I have all of this going on. And I didn't have that when I was working off the kitchen table. But I also needed the space because my business grew from the kitchen table down the hallway into the kitchen, into the, into the formal, formal dining room, which turned into an art studio. And so it was just, it was outgrowing my house at that point. So now I have a bigger brick-and-mortar store. I have lots of costs. Like, I probably 5x'd, 10x'd my cost, um, in 2016, my overhead costs. So that $142,000 looks really good on paper, but I have a lot of costs involved now. And now I have an employee that I'm having to pay regularly. Um, and so this was really a challenging year. I feel like I was profitable and I had a lot of money in my pocket, and now my cash flow is really dipping because I have these extra expenses with growing the business. And so then in 2017, I decided this is the year I'm going to start my subscription box. Okay, so this revenue here is from my Etsy shop and my brick-and-mortar store. That's all I had. I didn't even have a website at this point. And so in 2017, I decided I'm going to start my subscription box, and I do that in April of 2017, and that generated another $64,000 in revenue on top of my store sales. My store sales are growing and it's really awesome because most of my subscribers at this point are local subscribers. So they're coming into my brick and mortar shop to pick up their box and they're also spending money in my brick and mortar. Do you see how I go from $142,000 to $221,000 in that next year just in my store sales? And so this is really a game changer for me. Starting this subscription box was really a game changer for me because it allowed me That overhead, like, let me, let me help you understand that. When you have this overhead, all your money, the first money that you make goes to your overhead. You're not even profitable until you pay the overhead. It's just like my salon, you know. We, when I bought the salon last year, we weren't even having enough appointments booked to pay the overhead of that business. So we never got to the profitable stage because we didn't have enough appointments booked to even pay the rent, the utilities, the payroll, and my royal royalty fees that I pay to the franchise. So we were negative every single month when I bought the salon. And that's, that's where we have to— we have this hump we have to get at. We're making great side hustle money, but side hustle money has to translate into really legit business profit. And when 2016 was a hard year for me because I was growing, but I also was growing in expenses too. And so by 2017, by adding that subscription box to my business, it helps so many things. It helps me be more visible, It helps me make these extra $64,000. And now, because I'm— 95% of my subscribers in 2017 were local, they were coming in my shop every month. I was bringing foot traffic into my brick-and-mortar store every single month, um, to shop and buy more things. And so now we're seeing this 2013 to 2017, we've 4 years here and I didn't even quit my 9 to 5 until 2016. Okay, so it takes time for this to happen. So then I'm like, okay, this subscription box is legit. Let's go all in. Let's start really making my business about the subscription box. And so by the start of 2018, I knew that the subscription box was something that I wanted to make the main thing of my business. You've heard me talk about this before and I'm going to show you what happened when I made it the main thing in my business. And this was something that my mentor had— had my business mentor had told me. He's like, if you want that recurring revenue to be the main thing in your business, you have to make it the main thing in your business for it to become the main thing. I can't just keep operating like I have a local brick-and-mortar store and this cute little subscription box is kind of the side thing. I have to treat the subscription box like it's the main thing, and I just happen to put it together in my brick-and-mortar store. And so So that had to— that changed my mindset. I was advertising locally. I was talking about the things in the store locally. Well, that was hurting me because I wasn't able to grow online because people saw me as a local store. I needed to be seen as, as, you know, countrywide. I needed to be seen all over the country. And I was focusing on that $220 and not the $64 because that was making me a lot of money. But I wanted to flip this. And so I— that's when I started to go live. That's when I started to, um, you know, I started to, uh, talk to people that were outside of my area. I started to get everything online. And what changed for me was in 2018. Um, let me change the view of this real quick. I'm gonna pull this up so you can see it a little better if you're on. What changed for me was now my subscription box became the main thing of my business and it outperformed my retail store in 2018. You can see that it shifted. I did $187,000 in subscription box sales. I did $164,000 in retail sales. So I had $350,000 that year that I did in business, but now my business started to shift And that's what I want you to see. Like, if, if I focused on that $221,000, I probably would have made another $220,000 that year. But I really needed to focus on this subscription. I needed to get outside of my local area, and that subscription box was going to do it for me. And I went all in and I kept growing and I kept launching. And then what happened in 2019 was everything is growing. I did $384,000 in subscriptions in 2019, and I did $207,000 $7,000 in my store. You see this pattern? This really— this— the turquoise line is going to be pretty even here, but this pink line is the line that keeps growing. The pink is the subscriptions. So while I did, uh, almost $600,000 in 2019, um, it was now most of my revenue was coming from that subscription box. Um, and then it happened for me. It happened for me and it exploded. But I want you to see, before I show you the explosion, I want you to see how long it took me to get there. And it's okay that it took me that long to get there. It is not overnight success. I didn't start my subscription box in 2017 and make a million dollars. I started my business and I had these local customers and they would grow and grow and that's who— that this $64,000 right here, they were all local. It was customers in my town. I didn't just wake up one day and make $64,000 in the entire United States. It was people from here and here. And the $32,000 and the $19,000— sorry, I keep hitting that. Um, but I was growing, and I was growing at a steady pace. And then And it hit, it hit like a lightning bolt. And I made $1 million in just my subscription box alone in 2020. And this is what happened. I leaned into advertising. I leaned into who I was as a business. I leaned into going live and showing up for people. And people showed up for me. And this continued. I now made a, I made $1 million I made $1.28 million, like almost $1.3 million in 2020, almost tripling my sales from 2019. And had I not had that subscription box, do you see where my growth would have leveled out? Around that $200,000 to $240,000 is all I was ever going to do from my brick and mortar because that was all I was ever going to reach. My reach with my subscription box became substantial. And that's what I'm trying to share with you today. We have to keep building. And once you shift your mindset to making the subscription box the main thing in your business, it's going to become the main thing in your business. And if you want that recurring revenue to keep growing, you have to keep growing. You have to keep evolving. You have to keep learning. You have to keep marketing. You have to keep trying new things. You can't get stuck. If I got stuck with just selling my subscription box to my local audience like I did in 2017, I would have never had the growth that I had in 2019 and '20. And so it didn't happen overnight. It took me 7 years to make my— have my first million dollar year. Um, it took me a long time, but I never gave up. I always I just felt like, okay, there's another way, there's another path, and you're gonna see— you'll see this evolution within your own self. But for me, I told you I was making frames and door hangers. My subscription box has neither in them. I started somewhere and I kept learning what my customers want, and I kept pivoting what my customers wanted, and I kept figuring out what gap there was in the market and what I could fill. And that's how I became successful with And I go on and on, and I make $1 million a year for multiple, multiple years. But it starts with that $19,000 that I made. That's $5,000 that I made in that one weekend sparked something in me that I could never get rid of. And if you've not had that spark for you, I want you to know that it it's coming, and it's going to take time, but you have to take those opportunities. If I would have not gone in halfsies on that 10x10 booth with someone, I would have not had that $5,000 infusion in cash. I didn't know that a $500 booth would result in a 10x ROI. I didn't understand that then. I didn't know that if I put $30 into a Facebook ad that it would result in $300 in sales for me. I didn't understand that, and I was scared of that because my money was precious. I told you I went to the grocery store and used a calculator because that's all the money I had. So spending $500 on a booth rent was so outrageous to me, not knowing what that ROI is. But I kept leaning into the opportunity, and I want you to lean into the opportunity. I just had a sold-out subscription box launch. In the middle of an economic crisis, in the middle of a tariff war, in the middle of all this uncertainty, I just had a sold-out subscription box launch. Y'all, there will still be— there's still opportunity. When you think that this is not the right time, when you think that you don't have it in you, when you think that you can't do this, We are still doing this. We are still doing this. I just talked with Scale Your Box a couple of weeks ago. Jenny just added 300 subscribers to her subscription. Like Betsy just added, I don't know, 100 subscribers to her subscription. Like we're still growing because we never gave up, because we don't look at what's happening in the world and saying, I can't do this. This isn't the right time. Maybe I shouldn't be launching right now. you absolutely should be launching right now because you know what? There's a whole pool of people right now pulling back as business owners, and that means we need to be pushing forward. If you're at the beginning stages like Elizabeth, yes, I'm saying you need to be more patient. It's going to come, but you have to allow the opportunity for it to come. It's not going to come if you sit on your heels. Someone's not going to knock on your door and say, hey, Will you make me a subscription box? You have to put yourself out there, and you have to keep growing, and you have to keep testing, and you have to keep experimenting, and you have to keep fighting through all the negativity that's popping in your head about, can I do this? Am I worthy of this? This is too hard. It started with that $19,000. How many of you here in the chat would $19,000 change your life right now. It was life-changing to me. And I think that we tell ourselves, I can't make $19,000 extra, Sarah. That doesn't seem possible. It didn't seem possible for me either, but I just did it $40 at a time. And that $40 allowed us to eat out one night. That $40 allowed me to buy a little something extra at the grocery store. That next $40 allowed me to put some more gas in my car. And it starts with that $40 purchase. And when you do it with recurring revenue like I showed you on my chart, it compounds because I'm not having to chase that one-time $40 sale anymore. That $40 sale is hitting my bank account every single month. I have to sell it one time and it keeps coming back. Like, oh, how did that happen? It just— I got it again. Oh, and they gave it to me again. And here I am on month 17 and I got it again. And that's what's possible. Businesses right now without recurring revenue are struggling because showing up and selling the things one time and one time and one time and one time time is hard and it's costly right now. But selling your subscription one time and nurturing them and retaining them and giving them a great experience is what I'm talking about. And that $19,000 turned into a million dollars in 7 years, and it's life-changing for me. I just got back from a week of traveling to California and Mexico, and I think about, you know, the flights and the meals and the things like that, and it's all work-related for the last week. I wouldn't have been able to afford that without my subscription box, without that recurring revenue. I wouldn't be able to just jump on a plane and make last-minute flight decisions and eat wherever I want to I would still be the girl with the calculator at the checkout. It's life-changing. It gives you time freedom. It gives you location freedom. It gives you financial freedom. But it takes time, and I want to encourage you to keep going. And if it's the first $40, get— talk about the next to get to the first $400 or the first $4,000 or the first $40,000. Don't, don't think about the first $4 million. Think about a more doable number, because when you think about $4 million, that thing's— that feels really hard and undoable. But if I think about how do I get to $4,000 this month, how do I get to $4,000 in 3 months, how do I get to $14,000 by the end of the year. You start doing the subscription box math. How many boxes a month does it take? Let's just do some math. If I wanted to get my first $14,000 and I had a $40 subscription box, that's 350 boxes. That's 29 boxes a month. And no, that's not all profit, and this was not all profit to me, it was revenue. Get to that 29 subscribers. How many of you believe I can grow by 29 subscribers a month in the next 3 months? If you believe that, tell me in the chat, I believe that I can get 29 more subscribers in the next 3 months. And if you wake up with that goal of, okay, I got to get 29 subscribers in the next 3 months. That's about 10 subscribers a month. And then I got to keep them. I'm going to try to get 12 a month. That's my goal. How do I get 12 subscribers this month? That's what you have to focus on. Don't focus on the million. Focus on the 29. Focus on the 12. Let's get going. I just focused on them one subscriber at a time, 50 at a time, 50 at a time. That's what I focused on to get from 0 to a million. We can do this. We can do this now. We could do this back then. We can do this tomorrow. People are still buying. All right, people are still buying. So that's my encouragement for you today. Success did not happen overnight for me or most anyone in this room right now. If you're at the beginning, if you're somewhere in the messy middle, maybe you're at that cash flow where you're— you want to grow but all your cash flow is gone like I was in 2006. 16. We just have to keep going to get over that hump, get to those first 29 subscribers, then get another 29 subscribers, and then get another 29 subscribers. And that recurring revenue is going to keep building for you. All right, I want you to have a great day. Um, I want you to think about this, and I want you to do some math. Put your goal your financial goal on a piece of paper and do the subscription box math. How many boxes do I need to reach this number goal? And let's start dipping that out. Let's start dividing that out, dissecting it, and start getting one subscriber at a time. We're going out— I don't know, let me show you my— no judgments on my messy office desk slash all the May boxes are heading out the door right this week from my sold-out launch in the middle of this economic weirdness, in the middle of a tariff war, in the middle of uncertainty. If I can do it, you can do it too. All right, y'all have a great week, and I'll see you soon.