Fayt has made $2 million less than last year... But that's not all!!!

[Music] Hi, I'm Brittany Saunders and welcome to Big Business. The place where business is far from boring. And today I'm recording on a what-be-cool land. Now, I somehow managed to build an empire from the garage underneath my house. And I'm here to share it all with you. From the winds, the mistakes, the challenging times, and the funny moments in between. So whether you're in business already, perhaps you're not in the game at all. Maybe you're just looking for some info or you simply just want to hear the tea. This is the podcast for you. Well, well, well, it is that juicy time of year again where I tell you how much it cost me to run a fate in this last financial year. It's a new financial year. And if you listen to the pod often enough, you will know that I did the same episode as this at the same time last year. So if you want to hear last year's fake costs for the year, by all means, just scroll back to this time last year on the pod and you'll find the same episode if you want to hear that. But because I did that episode last year, I have with me our profit and loss statement from last year as well as like this financial year. So I can do some comparisons for you of, you know, what we've spent in this past financial year versus the one before. And, you know, what's gotten more expensive for us or what we've saved money on because that's a big one for us in the last year. AJ has been working very hard to try to bring down our costs. In certain areas, just trying to save money wherever we can. Not because we want to take money away from anything or whatever, but it's really important when you have a business and it's growing, you know, bigger and bigger, you're spending can become out of control and you can be spending money on stuff that's costing you so much. And it's really important to know your numbers. Like you always hear people say that. Know your numbers and know what you're spending money on and always look at, you know, every single thing that you're spending money on and try to figure out, you know, can we save a little bit of money here and there because every dollar adds up. Now, before I get into this episode, if you didn't listen to last year's one, I want to talk about why I do these episodes. I don't do these episodes to brag in any way. I'm not going to sit here and be like, we made all this money and look, we spent all this money on marketing. It's not that's not the vibe of these episodes. I think pretty often when women especially talk about money, it can be seen as taboo and like, "Oh, like, you know, jarring to hear women talk about money." And I think I just like doing these episodes to number one, normalise talking about money, talking about the costs of things. And also, I think it's just really interesting and a bit juicy at the end of the day for me to be able to share this information to, you know, tell everyone, "Hey, a business of fate size, this is how much we spend in a year on everything from shipping to wages, superannuation, insurances, rent, all our bloody warehouses and our shops, how much money we spend there, marketing and everything." Because it's interesting, you know, I don't talk about this very often. And so I feel like I get to do this fun little episode once a year and tell you what we've been up to and what's changed. Have we gotten ahead, have we fallen behind? And it's just to normalise talking about money. So I'm just going to get straight into it because I'm sure you're all dying to hear the numbers. So let's just get straight down to business. Okay, so I want to start out with probably the most interesting part of this financial year that has just ended like the last year and the year before. And that is we have had lower revenue. And I know when you first hear that, like you immediately be like, "Oh, no, you know, especially if any of you are in that like scale era, you know, where you are focused on revenue, which I want to touch on a little bit, as business owners, we can get so fixated on revenue. But if there's something that I've learnt in this last financial year that I'm reflecting on today, is that, you know what, I no longer give a shit about the revenue number. Now look, I do care about the revenue number. And if you don't know, revenue is just like your total sales, like the amount of money that comes into your business before you have paid for anything, right? And when you're a business owner and if you're chatting with a lot of other business owners, you can often find yourself in a bit of a revenue trap where you really care about the revenue number. And it's good to have goals, right? Like let's say you make $100,000 in your first year of business. And you're like, "That's amazing." And again, that's in revenue. That's not in like profit. And then you get obsessed with that. So you're, "Okay, next year we want to double it." And we hope to do 200 grand in sales in the next year. And you find yourself becoming obsessed with that revenue number. But if there's something that I've learnt in the last year, and I've spoken about it recently on the pod, when I spoke about, you know, a few brands that I've noticed that are posting different things, like in episode talking about like the breakout hack and stuff, how they said that they are going to have a bit of a shift and they don't mind if their revenue drops because they feel like they've lost their sparkle. Anyway, that's besides the point. What I've come to realise is that I'm kind of done thinking about revenue because you will always be chasing that next number. But for what reason really, you know? And as everyone knows, like the bigger your revenue gets, the bigger your business gets, the bigger your costs get, and the bigger the stress. Like that's just plain and simple the truth. So this financial year, 'Dun dun' fate has made $2 million less than we did in the last financial year. And now, if even me a year ago had heard that, that we would have a year where our revenue dipped lower, I would panic. And the reason for that is because I have always wanted to have higher revenue every single year because I would attribute that to growth, you know? Because if we're making more sales, then we're making more money. And if we're making more money, we're making more profit. But also if we're making more sales, our costs are going to be higher. And so I know longer, like, look, I still do care about revenue because if we're making $0 revenue, we're absolutely fucked. But I'm done chasing these numbers in terms of revenue. And you can get so obsessed with it. You can be like, I want to own a $100 million business. But I don't care about that anymore. We have made $2 million less in sales in this last financial year. But I'm so happy about that. And do you want to know why? And also, I know that's a fucking crazy amount of money. I'm so happy about that because, first of all, if you listen to my podcast often enough, you will know that like 2025 and going into 2026 for us has been a year of not scaling. You know, I've done those episodes saying we're not opening any new stores. We're choosing to stay as we are and like build strong foundations and make sure everything's in line. Like I've done, I feel like two or three podcasts about that like a year ago. And we have done exactly that. Now, as a result of that, us choosing to not continue scaling, which we've done every other year, you know, open and stores doing this, doing that, doing the other. We have made $2 million less in sales. But guess what? Because we've been focusing on the inner workings of our business, we have remained the same with our profit, which is just bloody awesome. So despite us doing $2 million less in sales, because we've been putting such a huge focus on all the behind the scenes of our numbers from systems how we can save money, looking at what we're spending money on, investing in new processes and systems to make our workplace operate better, our profit is the same as it was the year prior when we made $2 million a year more. So I'm just absolutely stoked with that. And now I'm going to get into telling you all the juicy numbers. But I wanted to start with that and I just wanted to have a little reminder here that it's not always about the revenue. What you really need to be focusing on is the profit, because that's what you're left with after everything, right? It's great to, you know, do $100,000 in sales. That's amazing. But as we all know, that $100,000 isn't yours. You know, after you've paid for your stock, paid for your staff, paid for your packaging, paid for your shipping, marketing, this, that, the other wages and super and everything insurance, how much are you left with at the very end after you've made that $100 grant? Because that number there, your profit, that's what matters the most. That number needs to be the healthy number. Not the revenue number. We could do $100 million a year in sales, but if our profit is fuck all, then we've got a terrible business. You know what I mean? So that's my first little bit of this episode. Now, let's get on to the numbers and talk about what we've spent this year. And if I'm being honest, it's pretty interesting in comparison to last financial year, and I've got some comparisons for you year on year so that you can see what we've done to try and help keep our profits at the same level, but we have made less in sales but reduced our costs. So the same as the same episode last year, I'm just going to go through each category and tell you what we spent. And again, I'm not bragging about this, okay? This shit is expensive. I wish it was less if I'm being honest, but you know, I've built this business to this size, and these are the costs that we then entail due to how bloody big this business has gotten. So here we go. The costs of running fate. I'm going to start with, I think it's our second biggest cost. Oh, I don't know because they've got these all written all out of order. So I don't actually know. I think our biggest cost is stock. But anyway, let's start with wages. So last financial year, we had spent $2.92 million in the year on our staff wages. Absolutely insane. This financial year, we have spent $2.91 million. So a difference of about $9,000 less. We've saved nine grand on wages compared to last year. Now I know what your immediate thought may be. Oh, if they've saved nine grand on wages in the year, then that means, you know, no one got a pay rise, and they've cut corners. And that's not the case whatsoever. I think a big reason why it's stayed basically the same as the year before is because again, we haven't opened any new stores in this whole financial year. When we have previously opened stores every single year, we're obviously hiring a whole new team to come on board and it increases our wages because we've done a store basically every single year for every year before that. So we haven't had that bump in our wages due to not bringing on a new retail team and bumping up our wages a lot. And another thing that we have done is we have been a lot more careful with our rosters. And again, this is when I go back to talking about like every dollar counts. We have closely looked at in the last year, just our rosters. When you have a lot of stores and a warehouse operating, you know, with lots of employees, you've obviously got full-timers, maybe some part-timers and casuals. Doing your rosters is so important. And you know, we sat down a while ago and kind of went through all of our rosters and, you know, had a look at every single store and how much it costs us to operate each store each day. And then you look at that versus your roster and work out, you know, how much we need to make in a day to cover wages XYZ. And so we've become really on the ball with our rostering and making sure we're only rostering on who we need at times we need because it's one of those things in business when you have like lots of retail stores and you're just growing, growing, growing over rostering can be something that you so easily do where you've just got like way too many people on the floor. And sure, you might just think nothing of it. But then if you do that a hundred times in the year, you've got more people working, especially in a store on days when they don't need to be those costs like every dollar, every hour, it can really add up. So I'm pretty happy with that. Wages have stayed quite literally the same and that's not because no one got a pay rise. It's just because we've been more clever with the way that we have scheduled rosters at fate. Okay, the next one, a big one for us every single year, freight. This is freight shipping out everyone's orders to their homes. And in this cost, it also includes us shipping stock to our stores because all of our stock comes to our warehouse first in Newcastle and then it gets distributed out to our five stores and that's like a pretty big cost for us as well. But I'm really happy with these results. Okay, so in the last financial year, not this one that's just gone, we spent $1.86 million in freight wild. And yes, sometimes our customers pay shipping, but we have like a threshold on our website. And when customers spend over a certain amount, they get free shipping. So a lot of these costs we are paying for ourselves or absorbing the cost if we are offering the free shipping, but we will get the customers that will spend, you know, under the amount and then they will pay shipping. So it does absorb a bit of that amount as well. So it was 1.86 million last financial year. And this year, we spent significantly less. We spent 1.40 million. So the difference of around $420,000 less, which is a huge saving for any business. It's a huge saving for us. And this goes back to what I was saying at the beginning of the episode where we have made $2 million less in sales. And because of that, that means we haven't shipped out as many orders. So we have spent less on shipping. And that's honestly a positive for us. Now we haven't negotiated any lower shipping rates or anything to save that $400,000. The way that we've saved that $400,000 is we have sent out less orders. Because as I mentioned, we have done less revenue this year than we did last year. And I'm honestly seeing that as a positive. Because I think more isn't always more. That's my new way of thinking in business. Okay, this one might shock you as well. And it definitely shocks me. But I knew that this was going to be the case advertising. So all of my paid ads in the previous financial year, I spent 1.18 million. And this financial year, I spent 1.03 million. So this is another area where we have spent less. We spent about $150,000 less on ads. I have definitely done this intentionally. I've lowered my meta ad spend. Because again, I think it's one of those things. If you do your ads yourself, you can get kind of almost addicted to upping the budget and going further and further and further. But I'm truly, I think this is all part of like the shift that I keep talking about in previous episodes. I'm feeling a shift in business. And I have this mindset of less is more, you know? So I've like restarted my ad account in this last year. I've turned off a lot of my like main ongoing campaigns that were spending thousands every day. And I started again from just a few hundred bucks. And again, we're trying to be more efficient as a business. I don't want to be spending more and more on advertising every year, all just in, you know, the name of wanting to grow and scale because you can get obsessed with it. You know, I'd rather spend a little bit less on ads and tone it down. And then maybe come up with more clever ways to try to increase sales myself organically. And it's done exactly that. As a result, I've spent 150 grand less than I did last year, which again is an amazing saving. But we have kept our profits the same by working more effectively. Okay, the next one, one of my most hated ones, rent. Rent this year was more expensive than last year. And that makes sense because rent goes up every year. And that's just one of those things that we cannot save money on. So in the last financial year, we spent 1.18 million. And this year, we spent 1.28 million. So the difference is around $100,000 more than last financial year, which makes sense because it's just part of having a lease that every single year because of inflation, your rent goes up. So the next time that you walk into a fake store, just know that it costs us over a million dollars every year to open those bloody doors. But it's just part of it, you know? And we obviously have our leases and sign those dotted lines knowing that it's going to cost us that much money. Next up is another juicy one, our cost of goods. So how much we spend on production? Every week I see people on TikTok come after fashion brands saying all these fashion brands are just making their clothes for fucking five cents. And I always just laugh. Like I've never made any videos about it or anything because it's just like, I feel like it's not my job to educate people on the true cost of manufacturing. But I always just see that. And I go, first of all, I wish, I wish our, you know, stock was cheap to make. But then I don't because what would I be getting made? What would be the quality of what I'm getting made? Like production is one of the most, well it is the most expensive part of our business. So what did we spend? In the last financial year, we spent $5.37 million on stock. And this financial year, again, I'm really proud to announce we have spent less. We have spent $5.02 million. So a difference of about $350,000 we have spent less on stock. And again, why have we done that? Because we have spent the last year focusing on the foundations of fate. And maybe not everyone listened to that episode. And I never remember what it was like maybe at the start of last year, but I spoke about how I wanted to kind of put the brakes on a little bit. And I said, I'm not opening any more stores. And I really want to focus on the foundations of fate. And I feel like all of these numbers that I'm running you through are examples of us doing exactly that. You know, we've not put the brakes on, but we kind of have. We put our foot down on the brake a little bit. We've said, okay, let's not keep scaling the way that we had all the years prior. And let's work really hard for a year or now it's been like a year and a half of us doing this. And let's work hard on our foundations. Let's work on our systems. Let's work on the way we operate. Let's work on the way that we spend money on rosters and scheduling. Let's, you know, look at everything that we're doing and figure out how we can do this more efficiently. And again, as a result of us doing that, we have spent less on our goods, but kept our profits the same. And the reason how we've done that is by being more mindful with the way that we are ordering stock. Again, you can get so obsessed with scaling and growing and you can get into a pattern of like wanting to order more and more and more because you kind of get like almost cocky about it thinking, yeah, I'm going to order more and more and more and sell more. Whereas instead, I have this new mindset that I guess I've been working on for the last year where, you know, I'm going to be more clever with the way that I order stock. I'm not always going to have a big head with the way that I order everything thinking that I can sell, you know, heaps of every single thing. I'm going to be more mindful with the way that we do it. We're going to be more mindful with the way that we launch our collections and how many pieces are in each collection and how many units are going to be spread across all of our sizes. I've been mindful of that and as a result, I have spent less on stock, but we have kept our business healthy, which to me is the biggest win. If I heard myself saying this like two years ago, would it be like, what like the numbers aren't like going up everywhere in your revenues, not going up, but like I'm just seeing things so differently now. Moving on, technology, website costs pretty much exactly the same. In the previous financial year, we spent $76,000 on website costs and this year we spent $79,000. So $3,000 more, which makes sense because, you know, naturally the cost of everything goes up every single year in our website costs 80 grand a year to run. Another one which I'm so proud to say the cost has come down and like take notes everyone like when you're in business, even if you've got a massive business, you still need to focus on saving money and reducing costs. It's so important. Subscriptions, we have so many subscriptions and in the last year again, we've done a big overhaul. And in the previous financial year, we spent $211,000 on subscriptions, just all sorts of fucking subscriptions. And this year we spent $172,000. So we have made about a $39,000 saving in our subscriptions. Okay, now onto one that is completely different. I know a lot of these I'm talking about how we've saved money, but this is something that we have spent money on, but it in the long run was an investment and saved us money. Okay, now last year we made the decision that we were going to invest in a full warehouse software. And if you follow my socials, you would have maybe seen when I did some Instagram stories about this ages ago. Now this is a software that I would only recommend to businesses of our size. Like we have not had this up until this point, right? We've done it all kind of manually up until now, which is crazy. But we got a software program called Indigo 8. You can look it up if you want to suss it out, but it's basically an entirely different back end to your Shopify that runs your warehouse in terms of the entire back end. It's actually so in depth that I don't know how to explain it. And if I'm being honest, I don't fucking understand half of it because our team looks after it and AJ does. But it's the back end system of our warehouse every single thing that you can think of like it will be able to tell you if you need to find a box of axle jeans that we haven't launched yet. It will be like it's on rack 10, three rows up like you know, it's that kind of thing. And it's the same system that our team now use where they push around trolleys and they've got an iPad and it tells them go to this aisle and this box and then put it in this part of the crate. It's like a really technical system before that we never had that which is wild that we got to the size that we did without a software system. All we were doing last time was printing out everyone's packing slip and then manually going around and finding every item and knowing where every item was which was crazy. Now this was a huge investment for us. I can actually see that we paid a little bit of it in the previous financial year 10 grand and then in this financial year. It cost us $142,000. So all up we've spent about $150,000 across the two financial years on this new software system and you would think oh that's bad though because you know you've now got a new 150 grand expense in your business. But sometimes your expenses on these kind of things go up because you're looking at being more efficient and that warehouse system has made us operate so much better. I can't even begin to explain and Indigo 8 isn't the only one out there. There are so many similar software's out there. And yes it's an expensive investment but again it makes you operate more effectively and a business of our size we need that. It makes us pick faster it makes us pack faster get orders out the door quicker and it organises the entire back end of our business. So it's an expensive expense but it makes us work more efficiently as a business so that's worth the investment. Also it's not an ad for Indigo 8 by the way I just realised it sounded like an ad. Now I'm getting more to like the little more nitty gritties and in the episode last year I didn't go through every single thing because there's so many line items that are like 5 grand on this 10 grand on that there's lots of little ones. We saved around $36,000 this financial year and by the way I also just want to stress when I'm saying we saved $36,000 it doesn't mean that it's $36,000 in my pocket. It just means the business had one less you know of a $36,000 expense compared to the last financial year. So on our national travel this year we spent $148,000 and the year prior it was $184,000 so we've been more mindful with our travel traveling around to our stores and have again like our teams operating more effectively. Therefore as a result of that we're not spending as much money on traveling around to all of our five different stores and then as a result of that we are saving costs. Insurance another fun one that's gone up again one of those things that you cannot avoid this year we spent $108,000 on insurance and the year prior it was $77,000 so we spent about 30 grand more this year on insurance. Repairs and maintenance we got stitched up with this one. We actually spent double in repairs and maintenance this year again another one of those business costs that you would just never think about when you're going into business but when you've got so many different stores warehouses so many electronics and equipment it's one of those things that you're going to spend money on. So this year we spent about $88,000 on repairs and maintenance which again I know is bloody crazy it makes me want to pass out and the year before it was around 40,000 so our repairs and maintenance costs doubled. Another juicy one content creator payments we saved money again and again like I just really want to stress this is all part of us kind of putting our foot on the brakes you know a good year and a bit ago and being like let's look at what we're spending money on and seeing where we can be more clever with how we spend. So this year we spent around $70,000 on influencer paid posts and collaborations even though fate isn't a brand that's like known for doing paid posts with creators we absolutely do we just mainly work with smaller creators so this year we spent around $70,000 and in the last financial year we spent around $122,000 so again we have spent less on influencer marketing the same way that I have spent less on my meta ads. And instead we've focused on working more effectively doing some more organic stuff seeing if we can get away with you know spending less on you know those costly marketing at the end of the year. avenues and do more of it ourselves. So we've saved around $50,000 on influencer ads. Whoa, I could keep going because there's a lot of things in here cleaning, all sorts of stuff. But I think to wrap up this episode, what I can say based on looking at these comparisons is whilst fate didn't grow in this financial year, you know, we can't say that we went from this amount of revenue to the next amount of revenue. Yay, that's amazing. We can say we actually made a little bit less, but guess what? We became a more disciplined business, which I think is so much more important, especially now, you know, given the economy and the way that everything is changing and happening and things seem to be crumbling around us, we became a more disciplined business within the way that we operate and our costs, which is far more important to me to keep my business stable and solid, rather than always being focused on more, more, more. And trust me, I've scaled this business from nothing, literally in my garage, you know, into what it is now, which is a crazy sized business I never could have imagined these kind of numbers, like I could never imagine me spending $3 million on wages in one year alone. We have scaled and scaled and scaled and scaled and when you're in my position, it's very easy to want to keep going, you know, and we see lots of businesses go humongous, you know, and then they have $500 million business, which is wild to me. And I don't think I ever want to get anywhere near there because I'm loving where we are at right now. Even if it means we make a little bit less, if our business is healthier, if our costs are healthier and we're selling products and everyone is happy, that is what matters to me. I've really, that's been my biggest, biggest learning in the last year and I always do a tip of the week at the end of every big business episode. And this is my tip of the week for all of your business owners out there. More isn't always more. I think what matters more is your business being healthy. You get obsessed with growing and hiring more people and flashy job titles and more, more, more if you're not a disciplined business. That is my biggest lesson that I have learned this year. And even when our businesses are big and successful and growing year on year, which fate has grown every year on year. This is our first year where we haven't grown and we've done it intentionally. You know, it's easy to like not look at your numbers because if you think you're doing well and you're making millions in sales, like you think you're doing great, but it's really important to always go and look at your numbers. And even if you're doing so well and orders are flying out the door, always go and look at all those costs because even a business of our size, we've spent the last year in a bit doing that, looking at what we're spending money on, seeing where we can save money and as a result of that, we have remained stable. So I'm really happy to have reported this in this year's end of financial year fate report. You know what? It's kind of bloody scary doing these. I know I've only done these episodes twice now, but I can only hope that I will have this same sort of positive news next year. If I don't post the episode, you know something's gone wrong. Oh well. As always, thank you for listening to this episode of Big Business and listening to all the juicy numbers. I got to wrap this shit up because I've been talking for like 35 minutes straight at this point. I feel like I'm running out of words. But that's all from me in the meantime. Feel free to keep up with me on socials. Follow us on Instagram, Big Business, underscore podcasts and send us a question if you ever have any questions, any topics, any scenarios, anything you want me to talk about on the pod, but I always do those in my bonus episodes every week, send us a DM and give me a follow on my little business Instagram account. I'm loving the podcast Instagram account. I'm trying to do a bit of a mini rebrand and making it more than just an account with like videos of my podcast. If you know what I mean, anyway, go chuck me a follow there and remember to chase after your dreams as if they owe you money.