1. May 17th 2010
Little Black Dress Conference
Building and Empire – The Power of YOU.
45 min presentation by Cindy Luken
(Right click to play if there is no player on the animoto file inserted.)
WOW – that was 15 years of my life flashing by in a minute. The hardest part
of that presentation was working out what to put in from a resource library
of 50K + pictures and slides......that was exceptionally challenging as half
the „stock library‟ were our family pics from 18 month living on an old Dutch
barge in France and I got lost in the memories.
So, why am I here? I guess I have a story to tell, to share with you on how I
built my first (mini) empire, took genuine time out to relax and re-charge,
have a family (2 little ones) and now via the world‟s slowest startup
carefully shape a business for launch in Spring this year so I am in a position
to „build‟ my next empire and LIVE the life I love.
And why are you here? I am guessing you want a successful business - a
„vehicle „ so to speak that enables you to tick the boxes on your personal &
lifestyle desires or you are already in one and want make it easier or grow it
bigger!
Let‟s go back in time, to 1996, to the baking days of Luken & May biscuits -
for those you who have heard this story – my apologies – for others it is
amazing what got packed in. It‟s been a trip down memory lane writing this
talk. I look back and think it was all a dream but I have a few trophy‟s, a ra
ra resume and fabulous life long friends…not mention freedom!
Where do I start?
I always wanted my own business, I had aspirational dreams as a teenager
and saw it as the only way forward, somewhere off in the distance. We lived
comfortably, both my parents were teachers/ lectures and had a love of
„collecting old things and restoring antiques‟, we had strong family values –
we were always together.
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2. I always loved food, eating. cooking. I new I wanted a career in that space –
I wanted to be a chef but I wanted to go to Uni. So applied science - Food &
Nutrition it was.
Out of uni I worked immediately with Norma Willis of Just Nous catering in
late 80‟s to really „learn how to cook‟ – the food scene as we know it today
was emergingin Australia – eg Neil Perry open Rockpool.
I took the cooking experience back to manufacturers of food products – to
Sara Lee in NPD – creating, project managing. I had a foot in the factory,
the LAB and consumer kitchen.
Just as I was about to marry (commit 24/7) to Master Foods (Mars Group
companies) I met my husband to be …..that was the biggest eye opener and
most pivotal time of my life. He had so mastered living I knew I had
something to learn – he loved sailing , had his own business, and worked his
butt off 9 months – but the other 3 he was sailing maxi yachts in Hawaii and
Sardinia, or trekking in the Himalayas. I had NEVER imagine that you really
had choice in life or could create or control your future to the extent he
did.
A simple decision was made. Don‟t take the new position, move to Sydney,
and „design alife I love‟ by starting my own biz. Needless to say we
marriednearly 20 years ago and have had a ball ever since!
In 93 Luken & May started as a corporate catering biz with my partner friend
Sally May. She had 2 under 3 – it was tough with a conservative husband. I
saw what she would go thru to get to the kitchen or a job. I knew she felt
guilty not being able to be there 100% for everyone.
By 96, I knew a „service‟ business was not for me‟ and that I wanted to sell
a product off the shelf – something that could build sales without me being
involved every step of the way ….when everyone else was playing! And
biscuits it was – Bite size Butterburst Biscuits - a less sweet alternative to
Chocolate to serve at boardroom lunches. Biscuits as a product were a low
risk, high consumption offer. Idesigned and had made to my recipes and
specs sweet & savoury versions in catering trays and gift tins for the retail &
food service markets. At the time everything was really boring or it was
made in a kitchen without quality standards. So market dynamics, skills and
passions played into my hands.
A private investor approached me, my partner was bought out and that was
it. I still remember asking my accountant why I would need an investor and
he said …..To grow quickly & reduce your risk. And grow quickly we did
doubling out sales each year after achieving $450K in year one from a
standing start! I achieved my goal of turning over $5mio in 5 years – I still
wish I was money savvy enough to have set the BHAG as the bottom line not
top line! (but back then you don‟t know what you don‟t know) My husband &
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3. I had simply worked out a number that would put us in a position of choice,
I was young – so that seemed like a good idea.
The „out-sourcing‟ business model I created back in 1996 was beyond it
years – but it was built out of a shear lack of capital and to manage risk –
our small team focused on what it did best, spotting opportunities in the
market place and developing a range of over 80 products in close liaison
with customers, we out-sourced manufacturing to 3 sites & “delivered it”
via third party warehouse better than anyone else did.
We had a multi-channel sales channel – nearly a third of the business was
with airlines, we turned over more than a mio in food service to hotels,
convention centres, executive meeting rooms – places where our product
was given away. Here we just had to sell in – we did not have to create
consumer pull. We also were the queens of gourmet gifting at Christmas
time, we were renowned for our beautiful packaging, we were the #1
gourmet packaged brand in DJ‟s – one line alone, a little red cylinder sold
50,000 units pa. We also exported to the Singapore, Hong Kong and the UK -
Harvey Nichols & Selfridges and to Sainsbury and Tesco. We were sending
container loads into The major supermarkets DC, we ran consumer
promotional campaigns from Sydney. I once calculated that we had made 30
mio biscuits a year
We used technology and market intelligence to its best advantage (palm
pilots, internet, CRM, keeping close with customers and constantly providing
new and innovative products and services. Our business was all about the
customer and WOWing them. Processes and systems were the backbone of
the business. Innovation, agility & speed to market meant everything. We
had a finely oiled guerilla marketing / in –house PR machine working – we
built our reputation and credibility rapidly. Writes, buyers, consumers
believed in us and our story. We attracted good staff - the most
people/employees we ever had in the office was 12.
After 7 years L&M was sold, we knew we would always exit with a trade
sale, but this sale was not fully planned. I had 2 main brands L&M and Bite
ME and be Spoilt – it was the supermarket brand that I wanted to sell as it
was time consuming to manage, I really did not like dealing with the buyers
or selling to the UK as we always had so much money outstanding or tied up
in stock and the numbers did not stack up as well as we would have liked
becausewe outsourced our manufacturing & merchandising and in that
channel it‟s dog eat dog.
We sold to Stuart Alexander, a 120 year old company that owns, imports,
markets and distributes a portfolio of food and tobacco brands such as
Rosella, Mentos and Tabasco. They were cashed up and wanted to reduce
their biz risks by owning brands rather than just representing them. They
wanted the whole biz + me so we sold.
Timing was ripe as I was pretty exhausted and had no idea how I was going
to manage to have kids + run a business. I lasted just over a year not being
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4. suited to the „corporate‟ employee environment; the brand has since been
sold to Byron Bay Cookies. It has not moved much.
My focus in running L&M went through stages and each of these occurred at
a different revenue level and hence had different needs. My fundamental
skill/role was being visionary in leadership & customer marketing. I pushed
QA never settling for anything but A1 product – it worked – our brand meant
everything. I taught myself accounting from ground up and celebrated the
day I put on a commercial manager. I was an operations nut having manuals,
& reporting systems to standardise operating procedures (SOPs) making it
easier to work in. I loved “getting on the road” where I worked closely with
end users & stakeholders to identify innovative „quick to market‟ product
and business opportunities.
Whilst doing all of this I sat on various advisory committees & councils
including the National Food Industry Council & Innovation Committees
providing input on strategic and future issues. I was a member of the Small
Business Advisory panel to the Reserve Bank Board and have been an active
public communicator in the media, at business forums, and in the education
and science industry sectors in general, having built my credibility thru
hands – on experience. My foresight to combine my love of food with science
& business was rewarded with an Honorary Master of Science from the
University of Newcastle. Our businesses unique skills – a combination of
creative flair and analytical skills won us over 20 export, entrepreneur and
business awards including Jaguar Gourmet Traveller award for Excellence in
Produce, the Australian Business "Success thru Innovation" prize and 19th &
20th spot in BRW‟s Fast 100.
These are the visual things – the things the person outside the biz see that
built my empire…..they created connection, introductions – they gave us
credibility…and ultimately SALES.
What is critical in this story is ….
EVERYTHING STARTS AND ENDS WITH YOU. THAT IS THE POWER OF YOU.
It‟s the way you think, your attitude, how you approach the job at hand,
how you bring it together, how you feel about what you are doing. Your
response to hitting hurdles, how you shape your organization, how you keep
it in order, inspire your stakeholders, those around you.
You probably know by now, I have a simple philosophy
LIVE THE LIFE YOU LOVE
So I have 5 simple but powerful thoughts on what kick starts your Empire.
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5. 1. Recognise what you love what you do
Why – you’ll be good at it!
2. Focus your efforts
There are too many distractions. There is not enough time.
3. Do it well
You‟ll stand out & get „runs on the board‟ When you‟ve done it well –
you‟ll know - congratulated / praised / +ve feedback
4. Reap the rewards of confidence
That you are on track. Makes you feel good.
5. Passion exudes
It‟s a circle …keep feeding / building on in
To summarise the L&M years into a simple recipe ….these are my 10
delicious take outs.
1. Clear Vision
Simple and motivating. Well communicated. Never assume anything.
2. Business Model & Strategy
Fundamental to develop the „perfect & profitable‟ company and operating
structure.
3. Core attributes and Competitive advantage
A business must know what it is good at &
protect its space in the market.
What differentiates it, is it sustainable?
4. Management & Communication.
A strong boss leads & builds a strong team (internal &/or external)
and together they make it happen.
Build and use uniform and agreed methodology, processes and reporting
systems.
Have the right people doing the right job – incentivise team.
Ensure the team think and act like business people.
5. Resources
Good set-up and management of time, cash, people.
Eg Centralise critical departments at source ie finance but
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6. outsource non core activities to provide agility / simplicity / expertise
It is not always about resources …focus and prioritisation is fundamental to
getting the right job done on time and on budget.
6. Innovation
Whether it be products, services, technology.
Continually develop the businesses innovation capability.
Be first to market and ensure it can be funded continually.
7. Market Knowledge
Know your stuff so you can easily make decisions.
Competitors. Sales History. Players. Customer/Channel/Market needs.
Market Segments. Consumer needs. Drivers.
Have mechanism/system for continual update and sharing info.
8. Reference Sites / Credibility (+ now, Social Media)
Build upon successes (yours or others) to create a strong brand image.
Knowledge, customer wins, awards, PR, referrals.
Give better service than your competitors.
Guarantee your products unconditionally.
9. Strong sales and market potential
A market exists for you to generate revenue objectives
and has room to expand without sacrificing profit.
10. Sustainable Growth
Core proposition has good profit profile and
margin structure from day one.
Business has access to goods and services with minimal stock holding.
Let‟smove forward ….
After selling the business, I took a year or so off but kept dabbling and
writing business plans for my next venture. I was going to do this then that
with this person & that. I was bit of a lost sole….my whole life was gone.
I knew I should start having a family but my heart was not in it. Instead I
re-connected with a woman, Jane McKellar whom I met whilst running L&M.
Whilst she was running Elizabeth Arden she‟d ask me to general manage a
boutique brand she was keen to buy – the delightful bodycare brand
ARNAUD. I did and opened my eyes to the word of the beauty care
industry…..the margins and creation of consumer experiences.
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7. It was during this time that my son, now 5 was born and the first seed to
create a lipstick from skin nourishing food was planted. I put my food
science hat on, researched extensively about how lipsticks were made, their
ingredients and roles and started to experiment and formulate in my kitchen
using the beautiful foods we eat as ingredients.
Because of the vast quantity of lipstick we apply and consume in a lifetime I
wanted this range to taste amazing, like nothing you‟ve tasted before and
at the same time be good for you – like fresh& healthy balanced diet. I
wanted to differentiate my range, share my love of food and beautiful food
experiences, I wanted it to sit in the world of food – of chefs, & deliciously
moor-ish and healthy ingredients, not a glossy, gossipy over work celeb
space or confusing and emerging organic – good for you, the world not to
mention the done-to-death ingredient story etc.
As I never wanted to work full time when I had little ones I took on the role
of mum with gusto, I‟d worked during sleep time, and 9 months later #2 was
on the way. So was our plan to live on boat over seas for 18 months.
When Ciara was 10 months and Karl 2.5 years we disappeared to France to
live on an 85 foot, 85 ton,100 year Dutch barge so we could be together as a
family as just live day to day… rather than racing around in the rat race. We
wanted to created a warm loving, explorative environment to bring our
little ones up in…..not to mention mummy & daddy having a wow of time.
Before boarding the boat I had scoped out a „brand proposition‟ of “beauty
from food”, created the logo luk (from my name –nice personal feel) and
convinced Australia‟s top colour cosmetic company to make the range for
me. Packaging was sourced out of China via the manufacturers suppliers ( I
did not want something off the shelf – it had to be unique), my formulation
concepts were developed, the flavor menu that I created from pure food
oils applied, colours mixed off my colour spec and voila – first samples
made. The range was put into stage 1 testing - packaging compatibility and
stability testing …..all before we were on the boat! Talking 2009
I had these wild dreams that I would „work‟ at night whilst the kids were
asleep – what else would I do moored up alongside a canal on a balmy
summer evening. The work I‟d do was build a website, create marketing
collateral, organize production, outsourced logistics, social media,PR and
start selling softly softly. ……Funny thing tho, that mobile internet
connection was not fab barging thru the Loire or moored beneath Sancerre
nor did the packaging pass its tests (& we could not figure out how to fix it)
and who would have thought we would be exhausted at the end of the day
after steering the good ship Imagine thru 10km and 10 locks, cycling 10km
to get food with a 10 month breast fed baby on your back and coming to
terms for the first time in 20 years with having to clean!!…..not to mention
finding it alittle challenging barging into a lock with 15cm of clearance on
either side. Think parking car at speed in garage with 15cm clearance to the
brick walls on either side.
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8. To cut a long story short, after a few months of hopelessly co-ordinating
DHL couriers & HK suppliers and Melbourne manufactures enroute with the
next batch of failed samples…I gave in. Put my dreams on hold and did what
I should have done from day 1….had a bloody fabulous time.
Turn the clock forward …to Feb 2011, we are home and its time for me to
pick up the lippy pieces but having a 2 and 4 year old in my full time care
and my „can do‟ feeling a bit shot to pieces after being out of the game for
so long….I sat down and mustered as much determination as I could to plan
how I could build this empire and still be there for my kids. So I started a
blog so I could take the time to pull everything together.First step was
getting some time for me to think & plan and do. … first task complete - the
kids went into in pre-school for karl - 2 x 6 hrs pw + Ciara to montesorri for
are you ready 5 x 3hr slots. Hmm. As the saying goes …I am making my bed
so I have to sleep in it!
Now I could really get start….and let‟s put this in perspective I use to work
12-14 hr days at least 5 days a week! So, shared online my business plan as I
write it – with the hrs I was „working‟ it took a couple of months, obviously
at the same time I was „fixing‟ the lipstick packaging issues ….but let‟s not
wreck a good story! You won‟t find in a textbook or online a version of a BP
like the one I wrote . If you are interested - it‟s on my website
…www.cindyluken..com!) I also set myself some goals like meeting Julia
Bickerstaff of The Business Bakery and reconnecting with Suzi Dafnis. I new
from experience if I did this – doors would open and I would start to feel like
I was taking baby steps in the right direction. And it worked – I was a panel
member on Koche‟s biz boot camp tx to Julia and Suzie did a video
interview on In her Shoes‟.
I did bucket loads of webinars and listened to podcasts to get up to speed
on the online world – social media, ways of working smarter, web building
etc. helped my girlfriend set up her business …all whilst sorting the
packaging issues that took the entire year to fix.
It was during last year whe all of this was happening that I realized it is all
very well to „Style your own dream biz‟ - work from home, sell via the
online marketplace, outsource your key biz functions but it can be ….very
lonely despite you never seeming to have time to yourself as a mother. You
write something and guess what – there is no one to critique it let alone
implement it besides yourself. So I started the Table of Fabulousness for
like-minded small biz owners and to be honest I have never really looked
back….but that is a story in itself.
But I talk about all those people working form home because I think we are
living in a magical period of time for creating a new business…especially for
„small fry‟ startups. The opportunities are endless because technology has
opened up the sales channel direct to the consumers door. Not only to
communicate with (to inform, educate, get feedback, spread your brand)
but to ship goods cost effectively. For a long time the brand creator has
been at the start of the chain – many steps away from the ultimate end user
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9. – selling via wholesaler and retail doors…locked into seasonal windows,
forced to dice and slice their A+P spend in a certain way, picking up Sale or
Return policy. On the flip side, the competition is and will get tougher as
the entry barrier is lower and it is harder to build credibility, not to mention
single rather than bulk orders – the latter is managable tho by having a
multiple channel strategy.
With this short direct sales channel we also have cost effect ways of
reaching our consumer via social media, using amazing and cheap pay-by-
the-month (if at all) online tools such as CMS or Social CRM, Google Apps, e-
mail marketing providers like e-weber and mail chimp, websites created in
minutes, and busy connecting destinations like Pinterest, You Tube,
Tumbler, etc etc. And not only can we outsource manufacturing and
logistics, we can outsource ANYTHING from design to virtual assistance.
All of this is relatively easy to use but it can be a time waster and just
because you are at your computer all the time it does not necessarily
reflect in interest or sales being created. There are many many business
that have a fab „shop‟ fronts or followings that are NOT making money.
AS you can tell - the circumstance under which I create my next business
have changedsubstantiallyto those of the Luken & May days. I am creating
this biz with my eyes wide open and my check list in hand, I know what I
need and what I am good at, what I don‟t want and what I am rotten at.
I have a short term goal it‟s simply do what makes me happy, gives me
confidence and sets the wheel in motion. It‟s not a huge goal like $5m in
5yrsit‟s just to…..
create a small business that runs profitably on 15 „child free hrs‟ pw with
<$2000* start up fund netting $1000pw by end first years sales.
That‟s it – the stick is in the ground, I can manage this. (and just so you
know – that equates to 100 lipsticks pw with an annual GSV of $250K.)
The first step of building an empire is ALWAYS to work out what you
personally want ….in dollars, time and circumstances. This shapes the size
of your business, what you sell and how. With young kids not yet in school I
knew I needed to phase the business,
Phase 1 - set thisrealistic first year goal– to work 15 hrs a week, be there for
the children, to keep the stress levels low so I am a happy mother and wife.
Phase 2 is when both kids are at school can ramp up and
Phase 3 is all about having a business that allows my husband to stop being
hands on his businesses.
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10. The over riding need at any stage is to set up a business that can be run
from anywhere in the world ..so we as a family can do what we want
…where we want. In other words freedom.
What‟s key therefore is the setting of the circumstance to build the
foundation and framework for the business so you can grow.
When I wrote my business Plan I put down 14 key business objectives.
To:
1. obtain gross sales of $250K year 1 with a net profit of 20% - in other
words pocket $50K after tax.
2. Find a product / sector where COGS run below 25%. ie gives room to
move / promote / sell via second party or give deep discounts to
drive volume.
3. Enter a sector / industry with high sales potential – ie sell product
that is in demand.
4. Breakeven on startup or @ latest within 3months and produce
residual income
5. Stage business growth and investment with potential to achieve $10m
gsv pa
i. Stage 1 ( year 1) $250K - self funded & managed,
organic growth, key accounts &/or sell direct
ii. Stage 2 (2-3 years) $1m
iii. Stage 3 (3-5 years) $10+m
6. By think this far ahead it means that the business has the potential to
grow: to increase the return, sized to sell or able to license the brand
7. How? Build a strong & flexible business model & product offer /
contract manufacturer that scales up easily.
8. Keep product range simple – limited number of SKU‟s or categories &
NPD if possible…the latter can be pushed back to the manufacturing
lab.
9. Stock – keep at minimal levels – which means small production runs.
<10% turnover. Stock turns at 10 pa
10. Have a product with a Min 12mth shelf life
11. Cashflow: ideally get paid b4 shipping stock – hence attractiveness of
selling direct to consumer. This can be balanced with some chunky
sales with terms of<30 days. Push for Creditors > 30days on
12. $2000 start up kitty. Hence need to pre-sell. (note am stay-at-home-
mum- don‟t want to put financial strain on family with my desire to
run own biz). I have already broken this objective by purchasing
packaging stock before pre-selling…but my samples were too woeful
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11. to be calling on corporate promotional & gifting companies and 5 star
hotels/ spas.
13. create an outsourced, streamlined and easy self managed business
that can be run without regard to location
14. never compromise or fail on quality, reputation means everything.
Service better than competitors. Build success on success of others.
Reward those who help.
Further on during the planning I added that ideally my biz will also do the
following things…
1. Sell products not services:
Why? Input hrs don‟t limit sales potential. Can easily systemise sales
process and scale up.
How? Design unique product/s and have them contract manufactured
2. Have no employees:
Why? Need flexibility & privacy to run home biz, keeps overheads &
headaches down!
How? Outsource services when needed – pay for what‟s needed.
3. Can be run from anywhere in the world:
Why? Gives flexibility, not tied to desk. Very practical & inspirational!
How? Utilise online technology – orders, communication, stock control
etc, Outsource key functions and ensure sales service is not physical.
4. Will operate in the Food, Beauty, Health &/or Wellbeing sectors.
Why? This is where I have experience and can LIVE WHAT I LOVE.
How ? Hunt for gaps/opportunities.
So in a nut shell MY Business strategy is to….
set up a home office with a local, outsourced virtual assistant or office and
by outsourcing the infrastructure cost, risks and constraints in
manufacturing, build an easily scalable technology & marketing savvy
business that focuses on building intimate and purposeful relationships with
consumers.
And my Brand offer, launching in Spring 2012 is a reflection of my belief
that if you feed your body with delicious and healthy food „inside out‟ why
not look after your skin „outside in‟ and use products made from the food
active goodies your skin craves….starting with your lips. My first collection
is …..
A delicious menu of 7 creamy soft demi lip colours and lustres that nourish,
hydrate and your protect lips. The range has been inspired by the beauty in
food – it sensory, nurturing and nourishing qualities. It‟s a collection for
woman like me who care about what they put in and on their bodies and
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12. don‟t have time to apply lipstick in front of the mirror….. but they still want
to feel good and be seen totake care of themselves.
It is a delicious guilt free treatto be used at least 50% of your „lipstick‟
wearing time because it tastes, looks & makes you feel beautiful…it‟sa
„quick lick‟ of colour and gives you a healthy, fresh-faced effortless look!
The base recipe is packed with essential fatty acids, vitamins A,C and E &
antioxidants to keep lips smooth, soft and illuminated. The flavours or
tastes such as Orange & Juniper, Lime, Ginger & pink Grapefruit are made
with pure food oils, expertly blended and the shades are soft, mellow pinks
and browns made from all natural and healthy enough-to-eat colours –
there‟s no carmine, no tin, nothing artificial, no preservatives. 100% natural
& lip delicious.
My beauty philosophy is simple…. food is the essence of a beautiful woman –
it gives you that secret ingredient to feel, look & be fabulous in the skin
you‟re in. I have started the luk beautifood „beauty kitchen‟ where I share
how to cook for beauty wellbeing so you can be inspired and find easy ways
to care for your skin from inside out through the foods you eat and cook – so
please pop over to my “beauty Kitchen” www.beautykitchen.com.au
Thesticks be available online direct to consumers or via variousbeauty &
gourmet food / cooking portals. The stick price will include P&H. It will be a
beautiful experience whenit arrives in the post. As I mentioned I am
approaching corporate gifting companies, 5 star hotels so I can get some
chunky „trade‟ sales. I am not doing retail doors at launch or in the early
years – so please if you can introduce me to anyone or are interested in
running a promotion please let me know.
To entice consumers to buy, I have created a Tasting Plate of 6 items off
the menu. In your goodies bag there is a card with the beautifood.com.au
address to please sign up so these can be sent to you in Spring. The
information I am sharing is limited because I want there to be a surprise and
delight factor! Go to www.beautifoods.com.au
So that is it….pop by my blog and get behind my kitchen bench with me and
see what happens in Empire #2!
Thanks for listening to me, I hope you got a few tasty take outs! And thank
you to Janine and the Little Black Dress Group who invited me here today.
Cindy Luken
CEO (Chief Everything Officer)
luk beautifood + Table of Fabulousness
www.beautykitchen.com.au
www.lukbeautifood.com
www.tableoffabulousness.com
www.cindyluken.com
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