This week has been a little bit manic and I am looking forward to getting Sunday off and relaxing. The good thing is the business is growing all the time and that is what this is all about. Two weeks ago we had not started the punch bag business and now it is part of every day life like we had been doing it for years. This was a business I have had my eye on for over 5 years already biding my time for others to mess up which they did.
These bags will all be weighed and checked before having their final packing sleeves in place ready for dispatch. Namibia left yesterday and Cape Town left this morning and will be in stores tomorrow. The rest of the country leaves this afternoon along with local deliveries being done today and tomorrow. 14 tons of material was used on out first order and this client represents around 25% of the total market.
During the week someone suggested we tap into the knowledge of a previous supplier which I thought was not a great idea and told them so. We have been doing this literally for 1 week and what we have done in the last 7 days they never achieved that in 10 years. How could anyone run a business and not improve the quality looking for something better. You would have to be brain dead to stick at doing the same thing for so long and not seek to improve your product.
If the previous company had used river sand like we are as one of the fillers their profitability would have doubled. This is just commonsense and having some foresight not being stuck in your ways. This is probably why it is always good to bring someone from outside to bring a fresh perspective and look at the business from another angle.
The work is never done and I am constantly thinking and working on ways to improve the product and increase the profitability. Working smarter and buying smarter is how the business will grow so the more you learn and become an expert at whatever you are doing the quicker you will achieve what is possible.
Yesterday I managed to find a supplier for river sand that will reduce the purchase price by around 62%. This was kind of expected as I was buying from a local hardware paying retail prices and it suited our needs at the time. This saving will increase the entire punching bag business profitability by another 20% which is huge.
I do think there is some other areas that I can reduce the price, but these will be minimal savings so will hold off for now. The product quality at the end of the day is what counts and that is how the volumes will increase through more sales. The local market is not huge, but if you have 100% of the market share then you cannot ask for more. I would say we have about 90% right now and we are expecting the remaining 10% to be agreed within the next few weeks.
I have already changed how I see this business now and think in tons and not the number of bags. My costs are all calculated by the kilogram covering every detail that goes into the filling process. Within 1 year we estimate we will be processing around 50-60 tons of material each month so the numbers should be continually increasing.