Suzanne Siemens is the co-founder and CEO of Lunapads International, a Vancouver-based enterprise with a social mission of producing sustainable washable and re-usable cloth pads and underwear for menstruation and bladder leakage. As a Chartered Accountant, Suzanne partnered with Madeleine Shaw, a fashion designer from Vancouver and combined their diverse set of skills to launch Lunapads in 2000. Together, they have built a successful company with global sales, diverting 2 million disposable pads and tampons from landfills every month. Here, Suzanne shares her financial acumen as well as valuable insights from 16 years of running Lunapads.
Pinkfolio: How did you become a partner of such a creative business after working as a corporate controller?
Suzanne: Because I was looking to make a change in my career that was based on putting my values and family first, I realized that entrepreneurship was a way to create the kind of life and career I wanted. I met Madeleine in a leadership course and helped her with business planning and financial projections, as she was in the process of raising funds for Lunapads. During the process, I discovered we shared the same values and that my business acumen complemented her creativity. From there, I committed to join Lunapads as an equity partner.
Pinkfolio: Did you face any challenges with startup finance?
Suzanne: With our combined skill sets, we successfully raised funding from angel investors who believed in our vision for environment-friendly and women-oriented products. We were very fortunate in that our shared vision with our investors allowed us to grow Lunapads organically, without significant time pressure. However, in the early years, we took pay cuts to finance our operations. In my case, I had savings from my previous job and was supported financially at home.
- Angel Investors and Venture Capitalists differ in size, stage, and time frame of the investment. Usually, Venture Capitalists seek for faster growth. Read to this article for more.
- Before your business make sales, the most common way to raise funds is through friends and family.
Become profitable and international
Pinkfolio: Growing a business is hard. What helped Lunapads to become more profitable over time?
Suzanne: For Lunapads, the breakthrough point was investing in e-commerce. The wholesale model of selling to retail shops is not always ideal for new brands: while you gain exposure of your brand through their distribution channels, your brand equity needs to be strong to survive. Furthermore, this model means you forgo some margin and need to withstand the cash flow challenge of providing 30 day (and often more!) payment terms.
By adopting an e-commerce model, you get immediate cash flow as well as valuable direct customer interaction. For example, you get immediate information about what products are moving, you can directly communicate with end-users to get feedback about products and learn what other products they are looking for. With the rapid evolution of social media and online advertising, we can immediately measure the effectiveness of our campaigns.
Pinkfolio: Would you offer any advice for startup founders with little personal or corporate financial background?
Suzanne: My advice for founders is to be committed to your vision and purpose, as it will get you through the tough times; your business will rarely go as planned. That said, it is important to get basic financial training to ensure you have the vocabulary and skills to pay attention to the financial performance of your business. Without it, you are not going to be making good business decisions for today and the future. Make sure to find a mentor with financial skills to give you confidence and advice about your business too.
- Founders need basic training in both personal and corporate finance. In fact, your personal finance is closely linked to your startup finance especially at the beginning (e.g while applying for business loans, clarifying liabilities, etc).
Startup finance and exit plan
Pinkfolio: What would be the realistic advice for business owners for their long-term financial goals such as retirement?
Suzanne: You can never be certain how your business will evolve or pivot. The early years can be tough and it often takes longer than you expect. Ideally, strive to set aside a bit of a nest egg/retirement fund in years where you are financially healthy. Always track your financials and pay extra salary when the business is making more money. Then, use those extra funds to contribute to your retirement account.
It’s also worth thinking about the value of your business and to consider an exit plan. It may seem far away, but understanding how to exit is important if you are thinking about retirement. What might be a more practical advice, especially for creative entrepreneurs, is to think about exit as a way to free yourself up to explore new business ideas.
When you are ready to think about an exit, engage an accountant to help you with tax planning to make sure you’re structuring and planning the next few years as smartly as possible. As well, consult with other financial planners and mentors on how to structure your business to be easy-to-sell.
- Retirement for business owners: A third of current retirees did not choose to retire. Often, there is no other option for health or family reasons. Even if you plan to keep working, create a retirement plan based on realistic assumptions.
- Understanding how to exit a business is as important as setting it up. Read more on this 6 exit strategies and check out this page for Canadian businesses.
Read more about Lunapads and their story from: