You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.
Carolina Acosta was busy building her client list as a self-employed designer when a trip to South America changed everything. “For a long time, I never really outwardly identified as Latina or Hispanic, because growing up in the U.S., I felt more American than anything else,” Acosta tells Create & Cultivate. “It wasn’t until I experienced South America for the first time that I reconnected with this identity and also met my business associate, who introduced me to this idea of a cultural drinking game,” she explains. “I was so excited because I personally love tabletop games and hadn’t realized till then that there weren’t a lot of products in my life that spoke to my dual identity.”
The experience had such an impact on her that she decided to launch Tragos, a party drinking and card game that celebrates and embraces shared Latino cultural norms and traditions, so that others could see themselves represented in a way she hadn’t for so long. “Once Tragos was launched, it was amazing to see just how many other Latinos had very similar experiences and could relate despite having different backgrounds,” Acosta tells Create & Cultivate. “Seeing the joy and connection with others in the community is one of the most rewarding things Tragos offers me.” And it’s safe to say the game resonated almost immediately. A few months after launching, Tragos went viral and Acosta and her team went from receiving about 10 orders a day to a thousand orders overnight.
Ahead, Create & Cultivate caught up with Acosta to chat about how she’s sustainably scaling her rapidly growing business, hiring the right people to join her team, and paying it forward in the process.
Tragos has made more than $1 million since launching two years ago (congratulations!). But take us back to the beginning—What inspired you to start Tragos and pursue this path?
My family still finds it hard to believe that the most non-Latina in their family ended up making a drinking game for Latinos. For a long time, I never really outwardly identified as Latina or Hispanic because growing up in the U.S., I felt more American than anything else. It wasn’t until I experienced South America for the first time that I reconnected with this identity and also met my business associate, who introduced me to this idea of a cultural drinking game. I was so excited because I personally love tabletop games and hadn’t realized till then that there weren’t a lot of products in my life that spoke to my dual identity. I had to play this game!
It was funny because in creating the content for Tragos, I realized I had definitely grown up within my culture without realizing it, taking references my mom would say all the time, laughing at card ideas my friends would come up with. Once Tragos was launched, it was amazing to see just how many other Latinos had very similar experiences and could relate despite having different backgrounds. Seeing the joy and connection with others in the community is one of the most rewarding things Tragos offers me. I see for myself just how many game nights, birthdays, and family gatherings we affect across the country. It’s a wild and gratifying feeling.
You launched Tragos while you were working full-time as a product designer for a fintech company. Would you recommend starting a business while working a full-time job?
At the time I launched Tragos, I had actually recently transitioned from full-time designer to independent freelancer, which gave me a lot more freedom with my schedule and much better work/life balance. With the particular full-time job I had, I was always so stressed out and working more than 40 hours a week. I think that major transition is what helped me realize my potential as an independent creative, and also forced me to continue the hustle through a (side) business (or so I thought).
I would recommend starting a business no matter what as long as you’re passionate about the business idea, understand the market demand, and start small. Even with a full-time job, your business idea could be just one product or service, just one client, etc. I would also say there are ways to streamline your main job so you free up mental capacity and stay energized to continue “working” your evenings and weekends. I’ve seen moms with full-time jobs launch successful brands, so if they can do it, I think anyone can.
You started Tragos with just $500 and you’ve remained wholly self-funded since launching two years ago. What are some of the pros and cons of being self-funded, and would you recommend the self-funded route to entrepreneurs starting out today?
I was very lucky in that when I launched Tragos, I didn’t realize just how powerful the demand was for products that spoke to an under-represented audience. The virality that Tragos took on in the first couple of months made our business scale at an unprecedented rate. With this growth, I continued to feel there was no need for funding. The biggest pro of being self-funded is that the business is 100% yours and you have full executive control on any major decisions. The con would be having to balance cash flow more carefully and stress priorities a lot more in your product roadmap. Any investment mistake (there have been many!) you feel immediately on your business.
A couple of months after launching, Tragos went viral and you went from receiving about 10 orders a day to a thousand orders overnight. What has been the biggest challenge in scaling so rapidly?
The biggest challenge during our rapid growth stage had to have been getting a team quickly together to work in sync, quickly and remotely. In a short amount of time, I had gone from spending maybe 20 minutes a day on my business to eight hours plus! Getting a team together was difficult but, in all honesty, running the team has also been a major challenge for me, since I’ve always preferred executing over managing. It’s required constant learning every day, which I’m still in the process of.
What advice can you share for fellow small business owners on how to scale quickly and sustainably?
I would say consider the talent you have on your team. You can’t do it all, but if you find top-notch employees or contractors that know a department better than you, then you’re making major strides and easing up a lot of work for yourself.
A percentage of each Tragos sale goes to charity, and since its inception, the brand has donated $20,000 to various non-profit organizations that give back to communities in the U.S. and Latin America. Why is paying it forward so important to you and your business, and what advice can you share for founders who want to build giving back into their business model?
Giving back is a large part of our mission at Tragos. It all comes with the Latino identity, understanding what our parents did to give us better lives, and knowing there is a huge need for empowerment and aid in the Latino community in Latin America and the US.
One thing I was very excited about in launching Tragos was the idea that we could be an additional brand voice for Latinos in the U.S., and potentially create bigger opportunities for students, entrepreneurs, and neighborhoods. We don’t have an annually set business model, however, we do multiple campaigns and initiatives that tend to be very reactive of the times, aiding those in the most need in that moment (i.e. COVID relief).
Understanding your bottom line will be the most important factor in tying in proceed donations and knowing just how much you can give back. It’s also important to make sure your brand aligns with the organization/cause you choose and the model is sustainable to your business year-round.
What was your first big expense as a business owner and how should small business owners prepare for that now?
The first “big” expense was our paid ads on Facebook. However, this was because my business associate was well-versed in paid ads. I’m not sure I would’ve done this right away with no experience myself in this advertising channel. I funded the ads with a credit card, panicking as I saw the spend go up every day while orders slowly trickled in. However, over a couple of weeks, we got our first 200 preorders.
The sales proceeds from the preorders allowed us to pay for inventory so that kept our financial risk relatively low. I would recommend a preorder for any business that can offer it and make sure you are very transparent to customers about the wait time. I would also suggest creating an email list of anyone that wants to wait till the product is ready to ship. In a similar way, this allows you to secure your investment on inventory by guaranteeing your initial customer demand.
What are your top three largest expenses every month?
Top three largest expenses in order of largest to smallest: marketing, payroll, fulfillment.
Do you pay yourself, and if so, how did you know what to pay yourself?
I pay myself enough to basically cover my expenses at the moment. Year three for Tragos has been nothing short of an enormous learning experience, with a lot of expensive mistakes made. It’s impossible to want to pay yourself when you see funds needed virtually everywhere else in your business. But, it’s necessary, otherwise, it leads to looking for work elsewhere which would surely dilute your focus on your company.
Would you recommend other small business owners pay themselves?
I, of course, would recommend small business owners paying themselves to cover their living costs, at least. That said, I’m coming to terms that as a business owner, sure there is sacrifice to be made, but there is also a work/life balance to uphold so if you’re not paying yourself the amount you want from your business, then you sure as hell shouldn’t be the hardest worker.
That’s not to say don’t give it your all, but do your best to work as smart as possible, and don’t work just to work because there will always be something to do for a new business. It’s your job to prioritize what it is you do every day to make the most of the maximum amount of hours you’re willing to work for the pay you give yourself.
How did you know you were ready to hire and what advice can you share on preparing for this stage of your business?
In my experience of hiring freelancers, the need for them was super loud and clear as I saw my orders scale through the roof from one day to the next. The most immediate hire I needed was a customer service rep because it was so tedious and emotionally draining. I was very cautious with all my hires as well, considering initial hours and a trial period of one month.
My biggest advice for hiring is, again, to look for the best candidate that is better at the role than you are or could be. I think this is very important for a startup. Otherwise, you end up spending a lot of time teaching and fixing mistakes rather than actually running your business. I would also always start with freelancers but would discuss W2 employment with an accountant to learn more on the requirements and benefits of going that route when you’re ready.
Did you hire an accountant? Who helped you with the financial decisions and setup?
I did hire an accountant to help with taxes more than anything. When I launched Tragos, I had no idea what I was doing (financially)! Because business did so well at first, I just saw a surplus of revenue and I knew we were good. However, I have learned, especially in this year, how to oversee the bottom line and shift budgets accordingly, with the help of my head of sales. Soon, I would like to better streamline my budgeting decisions and business projections, and be able to back up my decisions a lot more with data.
What are some of the tools you use to stay on top of your business financials?
Currently, we only use very well-formulated Google spreadsheets to track everything, while accounting uses Quickbooks. Any other suggestions?!
Do you think women should talk about money and business more? Why?
Absolutely! I strongly believe these topics should be taught in high school to make it clear to everyone that anyone can do it. The fact that women are naturally less risk-averse than men might be a reason why money and business are not as discussed as often as they should. Yet, in this technologically advanced world we live in, starting a business isn’t as risky as it used to be. And with women becoming independent now more than ever, of course, we should be talking about money so we can learn to make the most of our financial freedom.
Do you have a financial mentor, and do you think business owners need one?
I don’t necessarily have one financial mentor, yet I lean on a few individuals from time to time to help me make decisions. I think having any type of mentor, including a financial advisor would be extremely helpful! It is very daunting to have to make executive decisions, especially ones that cost obscene amounts of money you never even considered making or spending! I’m currently looking for a mentor and networking more as a result, which I think all entrepreneurs should prioritize.
What money mistakes have you made and learned from along the way?
Where do I start? Haha.
#1 Major Mistake: Getting into two contracts around the same time that locked me into a six-month agreement, the other for 12 months. Both services/memberships didn’t pan out the way we expected and resulted in tens of thousands of dollars negative ROI. I’ve learned to read the fine print more closely and ask as many questions until I’m 100% sold on something, even if I come off as annoying. Even the slightest doubt in my gut will now make me turn down opportunities, whereas before I was like an eager puppy, jumping on anything just because I had the funds.
#2 Major Mistake: Transitioning to a third-party fulfillment warehouse. In doing so, I doubled my fulfillment costs and added a million headaches in the process. I strongly believe that any small e-commerce business can handle its fulfillment better than any third party. There is just so much more control when you know the team handling your orders every day. It is also wayyy more affordable.
#3 Major Mistake: Changing the material of our games from regular paper cards to a waterproof PVC material. Thinking this would enhance the gaming experience because the cards wouldn’t get ruined by spilled drinks at the end of the night, the slightly increased cost seemed reasonable. I didn’t take into account the new material would also weigh more, resulting in 30% higher postage costs, hurting our bottom line a lot more than I had predicted.
These are all things a close financial advisor might’ve forecasted had I bothered closely looking at our expense projections for any of these decisions.
What is your best piece of financial advice for new entrepreneurs?
My best piece of financial advice for new entrepreneurs is to watch your bottom line as much as possible. Even in good times, capital should be treated as gold, and investments should have a 100% or close guaranteed return. Yes, there will be risks but there are many ways to mitigate them as much as possible. A CFO or financial advisor looking at your day-to-day financials would be key.
Anything else to add?
My journey has had very high highs and pretty low lows so I’ve tried my best to soak it all up and learn from both the good and bad. Some days, I have felt super grateful for the opportunity to call myself my own boss. Other days, I feel terribly trapped in this role I’ve created. I think that not always being your best self is normal, and I’ve learned to try and prioritize my family and my health over my business most times. This has helped me make better decisions in the long run and keeps me from burning out.
I think if there’s any additional advice to give to new entrepreneurs is to create a process for anything you do and document what works. It makes automating things a lot faster, reduces repetitive tasks, and makes for faster decision-making. I’m in the process of doing this (better) and I already feel a lot lighter and more confident than I have since starting this journey. Thanks for your time if you got up to the end!
Photos: Courtesy of Carolina Acosta