Two years ago, entrepreneur Jess Thomas had a business idea with no plan and only the proceeds of the sale of her 2004 Toyota Corolla for funding. Today her business, Health Lab, has 3500 stockists in Australia and a growing international market.
How did she do it, and what advice does Jess have that might help you launch your side hustle? Jess has some sweet advice that might just hit the spot.
You were working in the corporate world in marketing before you started Health Lab. Where did the idea come from?
The ‘lightbulb’ moment of Health Lab is a rather simple one to be honest. It was during my earlier corporate days that were filled with long hours, back-to back meetings, slamming down desk lunches and then finding myself with a serious case of afternoon sugar cravings, procrastination and 3.30itis. One Monday afternoon I bought out a batch of homemade protein balls at 3pm to share with my rather ‘hangry’ team. They were a total hit and the concept really rolled from there. I was inspired to create actually healthy, but also delicious snacks for other busy women just like myself. So I launched the first 100% natural protein ball with absolutely no added sugars into the market. It’s almost funny to think that it was just over 2 years ago that the “healthy” option available at most cafes and retailers was either a piece of fruit or some sugar loaded banana bread.
Did you have a startup model in mind when you launched?
To be very honest I had no start-up model in mind and no business plan but I knew I had an amazing idea and there was a clear gap in the market. I sold my 2004 Toyota Corolla and put the cash towards a very basic set-up. I was literally hand rolling the protein balls myself and selling them to one local café in St Kilda East, Melbourne. The business model, distribution channels, product portfolio and strategy have continued to evolve and change as we have grown quite rapidly in the 2.5 years. I think if you are very set on a specific start-up model or business plan before even starting, it could limit your ability to be flexible and maximise the new opportunities that arise along the journey. In reality, so much comes up that is completely unplanned. The main things that remain since launching is our clarity on our target market of women, our commitment to creating natural products and that we are still a self-funded business.
How did you identify new clients in the beginning and convince them to stock your product?
Back when I first launched Health Lab into the café and fitness scene, it was very good timing. I had minimal competition and I was bang on with the growing health trend so most stockists I approached could see the opportunity. Plus, we ticked a lot of boxes: our margins were good, we had a high quality product, we focused on marketing our product for them and we made business easy (e.g. direct store delivery and online ordering which was fairly innovative in the cafe scene at the time). So I was really successful at landing a lot of stockists very quickly. Plus, I was so confident in our products that if I had a really tough customer I would offer them Sale or Return on their first order within the fortnight – so they really had minimal risk in taking us on. Also, as I was very clear on who our target market was, identifying appropriate stockists was really just working out where our customers shopped and gravitated to, and making sure our product was available there for them.
You have a marketing background. How much has your experience there benefited Health Lab?
Yes I was extremely lucky to have such a good foundation in two highly successful businesses that were heavily marketing focused; L’Oreal and then Retail Zoo. My marketing background has definitely worked to our advantage in building the business, and really helps us differentiate our brand in the market. Plus, it’s meant we have always been extremely consumer centric and built our products from what the end customer wants. Tangible products are fairly easy to copy these days, but it’s much harder to copy a unique, engaging brand customers are loyal to. Customers are savvy – they see through any brand that is unauthentic, disingenuous and simply copying.
Are there any areas of the business where you’ve found your knowledge was lacking and how did you combat that?
To be honest I entered the food industry with very limited knowledge. I think that actually worked to my advantage as I approached the industry with a fresh perspective and focused on what the end customer wanted, rather than simply following how food branding and manufacturing had traditionally worked. So for instance, when it came to the stage where we were manufacturing our protein balls, manufacturers told me it was impossible to make a 100% natural product without added syrups. From a commercial, shelf life and manufacturing perspective it’s much easier to add in preservatives, sugars and fillers. But I wasn’t going to build a business on what products our manufacturing partners wanted us to create, but on what the end customer wanted. In the end, it was possible and provided us with huge differentiation in the market. I truly believe that sometimes lack of knowledge combined with innovative thinking can be a great asset. Plus there’s always Google if you don’t know something :)
The business grew quite quickly. How did you handle scaling up?
Yes we’ve grown to 3500 stockists in Australia alone in 2 years, so scalability has been a big focus and part of our business. I think to scale successfully you need to have really solid business relationships and partners that have the capacity and skill set to scale with you. We actually moved manufacturing partners quite early on in the piece, as we knew we needed to find partners that had the capacity, mindset and skills to grow with our business and at the rate we were growing. Other key decisions we made were bringing on team members and implementing distribution and logistics with a 3PL (third party logistics) partner, all of which allowed us to better focus on working on the business and playing to our strengths, rather than in the business. Now in everything we do, we always think big, think ahead and do it properly to ensure it’s sustainable and scalable.
Health Lab products are now stocked by the likes of Woolworths, Coles, Virgin Airlines and David Jones. How do you approach large corporate clients and what kind of work is involved?
What I’ve learnt now is that these major businesses have set range review periods once or twice a year depending on the category. If you miss that period for a potential stockist, it can literally take over a year until you can present your products to them. It’s important to be very aware of these key range review dates. In terms of our approach, we definitely customise it for each client and a lot of work goes into preparing for any presentations or meetings. You often only get one opportunity, so you need to make sure you put your best foot forward as these are the clients that can transform small businesses with the volumes, brand awareness and relationships you have the opportunity to build.
With a couple of years’ experience behind you, what are the biggest things you’ve learned? Would you change anything?
God, I have a very long list of the things I have learnt and my biggest lessons have always come from my “mistakes”. What I’ve totally come to realise are that there is always a hidden gift or opportunity in any mistake or obstacle. I think it's important to celebrate and own your mistakes as much as your wins, as it is proof we are taking risks and getting out of our comfort zones. As long as you learn fast and don’t repeat mistakes. The only thing I would change is taking the time to celebrate the small wins, as they are such important milestones that sometimes you don’t appreciate until you look back.
You started Health Lab with the help of friends and family. Was it important to you to involve the people close to you or was that a necessity of starting small?
I definitely couldn’t have grown Health Lab to where it is today without the support and help of my friends and family. In our situation, they became involved out of necessity in the beginning, mainly as the business was run on the side of my corporate career for around 6 months. I had family and friends helping hand roll the balls and my father in law helped with deliveries! Now, my husband Matt has joined the business full time as Managing Director – so we are very much still a family run business. I think small business and entrepreneurship can be extremely challenging at times, so surrounding yourself with a strong and positive support network will make things a lot easier.
What would be your best advice to people looking to make the leap to business ownership?
My advice is relatively simple, just back yourself and start. You work it out as you go. I don’t believe there is ever a perfect time to start a business and the world doesn’t wait for you to be ready, so just take the first step, even if it’s small.
Finally, your Health Lab hashtag #babeswithballs is a little cheeky. How important is having a sense of humour in business?
Haha I think it’s essential! Besides a sense of humour and relatability being a key brand differentiator for us in the market compared to other Health Food brands, I think you need a sense of humour to help move through and keep things in perspective with the many challenges you face on the entrepreneurial journey.
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