For the past year, my subscription box business, Dapper Black Box, has been a great creative outlet for me to satiate my entrepreneurial urges, support a cause I care about, and generate some residual income while I pursue my doctoral degree.
This post is meant to provide some general guidelines to starting a subscription box business based on my personal experience with starting one last year.
So, here goes. I’m going to infuse stories from my personal entrepreneurial path to add some color to this list. Keep in mind, though, that your journey–should you choose to take it–will undoubtedly have its own twists and turns that make it unique. My general guidelines are meant to help you plan for some of the major hurdles that I’ve experienced.
Click here to skip to the full list without my rambling.
Pre-Step: Get Your Money Right
Every business has costs. Anyone who tells you different is trying to hustle you.
When I say “pre-step,” I mean that having your money right is something to consider before you seriously think about starting a subscription box business or any business for that matter.
To “have your money right” means one of two things in my view:
- Save some of your own money over a period of time and call it your ‘personal equity in an untitled business endeavor’ and/or
- Have your plan in mind to raise money to fund your business endeavor.
A good friend of mine and fellow Kelley grad always talked about new business ideas together. We joked a few times that we had laughed away many ideas that had eventually gotten XX million dollars in venture capital. One day, I had enough. I told my friend, “I’m tired of watching other people develop businesses that we came up with. The next idea that comes to mind, I’m going to just go for it.”
One day, I had enough. I told my friend, “I’m tired of watching other people develop businesses that we came up with. The next idea that comes to mind, I’m going to just go for it.”
Step 1: Have a Great (read: Specific) Idea
Success in the subscription business is all about specialization. I think that people subscribe to any service because it fulfills at least one specific need. Dapper Black Box hopes to fulfill our consumers’ specific need for an easy way to support black-owned businesses. It also helps our subscribers enhance their dapper lifestyle with new accessories and personal care items every month.
Take some time to think about your businesses mission and core goals. Try to envision who the ideal subscriber might be. For Dapper Black Box, the ideal subscriber is my brother-in-law, so I reached out to him when I was developing the idea to get a sense of what he would look for in our kind of service and why he would subscribe and stay subscribed (besides being my bro).
Step 2: Claim Your Territory
As soon as I brainstormed enough names and settled on one, I immediately claimed the digital real estate by purchasing a web domain and locking down all of the relevant social media handles. I wanted to make sure that my business name was distinct from other players in the landscape, so I looked into other subscription companies directed at black people and men. I noted what I liked and didn’t like to clarify my positioning in the market.
Sidenote: I just recently protected Dapper Black Box by applying for a trademark. You may want to do that a little earlier than I did, but there are several much smarter people who can advise you on this specific topic. Just Google it.
Step 3: Put Out Some Feelers
As I mentioned in Step 1, I reached out to my brother for feedback because he was my target consumer. Before that, I called a few friends in the fashion industry to get a sense of whether an idea like this would be well-received. Their feedback continues to help shape Dapper Black Box into what it is today. In addition, by including the right friends and potential suppliers in my developing stages, I began building a foundation of future supporters to help spread the word.
I also used this time to build a presence on social media platforms. Instagram is my favorite, so I spent most of my time there. “Building a presence” for me meant posting, following, liking, and commenting on posts that were consistent with my mission. I wanted to be recognized by others who were also a part of the collective economics conversation.
Step 4: Make It Official
Set a launch date and make a plan to achieve it. For Dapper Black Box, it was many months from when the idea first formed.
It made sense for DBB to form an LLC and file EIN paperwork. Your business will likely have similar formation needs. Check out your local secretary of state for pricing. I formed my LLC in Indiana because it was cheaper and I have access to a home address.
Step 5: Plan Ahead
You want to make sure that your business has at least a few months of suppliers lined up. Don’t put off coordinating your curations until the last minute. Your suppliers and your customers will thank you. With Dapper Black Box, I planned out the first 6 months of suppliers and when I would reach out to them because I had a lot of other things going (e.g., wedding, honeymoon, 2nd year in the Ph.D. program). It helped relieve my stress and keep the early hurdles relatively low.
Step 6: Collect and Reinvest
I think one of the smartest ways to fund your subscription box is to solicit pre-subscriptions. It’s a simple idea really. Ask your most loyal followers to sign up for the inaugural subscription box by a pre-determined cutoff date. Use your social media accounts to drum up some drama building up to your date and allow the rest to fall into place. Make sure your website has been pretested so that there aren’t any hiccups for your first (and likely, longest) subscribers. to build cash reserves and initial purchase quantity. Made a cut off date to build a sense of scarcity.
Pre-subscribers are great because if you’re disciplined, you can use the upfront cash to fund nearly your entire operation for the first few months. In our case, we used the pre-subscribers’ money to purchase the first month’s items and shipment supplies.
Step 7: Continue to Innovate
I know it’s easy to think that the hard work you did in Step 1 was innovative enough. In the words of the poet, Khaled Mohammed Khaled, “Don’t play yourself.” Try not to stagnate your own progress by getting complacent. This has been my personal challenge area.
Continuing to innovate has been my personal challenge area.
The doctoral program provides a great excuse, but my business and its subscribers don’t care about that. Your subscribers won’t care about your excuses either. Take some time throughout your process to think of new ways to wow your subscribers and grow your business. I’ll let you know when I come up with a good way to do that with regularity.
Executive Summary
Pre-step. Get your money right
- Have a Great (read: Specific) Idea
- Claim Your Territory
- Put Out Some Feelers
- Make It Official
- Plan Ahead
- Collect and Reinvest
- Continue to Innovate
Continue to strive, as you have been my brotha. Keep God in the plan and it shall not be broken.