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.
Giovanna Campagna, a born-and-bred New Yorker, was visiting her mother’s native Colombia when she had an “aha” moment. “I thought to myself, here I am in the most biodiverse region in the world surrounded by the most incredible nature,” Campagna tells Create & Cultivate. “Moreover, everything I’ve learned about beauty is from the Latin women in my life and their rich beauty culture. How are there no brands speaking to this?” Given her extensive experience in fashion media and marketing, a growing desire to connect more deeply with her Colombian heritage, and a vast network of contacts to tap into, Campagna set out to fill this glaring gap in the market. The result is Joaquina Botánica, a clean skincare line that celebrates Latin America’s powerful botanicals as well as its deeply rooted beauty philosophies.
Campagna launched the brand with a single product—the Orquídea and Vitamin C Hydrating Glow Oil, a facial oil that boasts a potent blend of superfruits (including cacay, camu camu, and maracuja) and antioxidant-rich extracts from Colombian orchids—with plans to add two more products in 2021. Although Campagna started her career in fashion at Vogue and W Magazine and later co-founded a marketing agency to help Latin American fashion designers expand their reach to international markets, in many ways, her shift from fashion to beauty was generations in the making. “My great-great-grandmother founded one of the first apothecaries in Cali, Colombia in 1875,” says Campagna. “I actually named the brand after her as I am so inspired by her story. Celebrating vibrant, passionate women, and supporting female entrepreneurship is a core pillar of the brand, so Joaquina made the perfect namesake.“
Ahead, the beauty entrepreneur fills C&C in on how she took her idea from concept to company, including how self-funding her business has pushed her to be more creative and why she believes paying yourself is something to be proud of.
What inspired you to launch Joaquina Botánica and pursue this path?
When I had my aha moment, I was actually working in fashion. I started my career at Vogue and W Magazine and went on to co-found my first business in 2014, an agency dedicated to launching Latin American fashion brands in the international market. I grew up in New York but always had an inclination to get closer to my mother’s Colombian roots. Around that time, Colombia was experiencing a kind of renaissance and there were incredibly talented designers coming out of the region. However, the U.S. and Europe were still the hegemonic centers of the fashion world and it was a difficult world to break into. I realized that I could use the connections I had built at Condé Nast and in New York to help these brands succeed on the global stage and set out with my partner to do so. At the same time, I loved that my work enabled me to connect more deeply with my Colombian roots and celebrate them with the world.
It was through that journey that my idea for doing something similar in beauty began to crystalize. I was spending more and more time in Colombia, while also becoming increasingly interested in clean beauty and wellness. My lightbulb moment came when I thought to myself: Here I am in the most biodiverse region in the world surrounded by the most incredible nature. Moreover, everything I have learned about beauty is from the Latin women in my life and their rich beauty culture. How are there no brands speaking to this? So I set out to create a line that would share the region’s incredible botanical beauty and its deep-rooted beauty philosophies. We launched with one product—the Orquídea + Vitamin C Hydrating Glow Oil—and are releasing two more this year.
Although I did not start out in personal care, I have family history in the industry. My great-great-grandmother founded one of the first apothecaries in Cali, Colombia in 1875. Her husband passed away when they were very young, and she ran the business on her own until her son was old enough to take over. I actually named the brand after her as I am so inspired by her story. Celebrating vibrant, passionate women, and supporting female entrepreneurship is a core pillar of the brand, so Joaquina made the perfect namesake.
You decided against venture capital and opted for the self-funded route instead. Talk us through your bootstrapping process. Why did you self-fund and would you recommend that route to other entrepreneurs? Is venture capital in the future for Joaquina Botánica?
I chose to self-fund because I established that I had enough resources to develop and produce our first products, achieve proof of concept, and meet my growth targets for the first few years. There are definitely pros and cons to bootstrapping and going out on your own, but I appreciate that I can maintain complete ownership and control of the company and grow purposefully in a way that is true to my vision.
Deciding which route to take is extremely personal to your situation, goals, and the capital requirements of your business, so it is difficult to say what I would recommend. What helped me to decide was listening to the experiences of other entrepreneurs. The narratives of those who bootstrapped resonated with me more; they were scrappy, purposeful, and creative with their opportunities and capital allocation. They built profitable businesses that felt true to themselves and their core mission. Without a budget for hiring, they started out managing every aspect of their business, learned each area intimately, and were even more equipped to delegate when the time came. That being said, I have founder friends who do not find these stories appealing at all, and have opted to look for funding from the outset!
Bootstrapping has definitely made me extremely purposeful with my spending, and I believe that a lot can be achieved by being resourceful. Having a more limited budget has pushed me to differentiate our brand and create something special in ways that more money can’t necessarily buy. I believe this has led to a more authentic product and voice than what could have been.
I would not rule out fundraising in the future, but it would need to be with the correct strategic partner who would contribute more than just financial support to the business.
What advice do you have for people who want to take the leap to start their own business but are worried about the financial risk?
If you can start developing your business while still in a paid role or freelancing, I think it is wise to do so. Mentally (and financially) it can be a relief to have a stream of income while you are only seeing money go out the proverbial door on start-up costs. You may also find that you have time on your hands while things are in gestation. At least in beauty, developing original products takes quite a long time (it took us roughly two and a half years), and I sometimes found myself with not much to do while waiting for things to come together.
I did leave my previous role to start the business, but I was pregnant and gave birth to my daughter during this time, so it worked out perfectly. I dedicated my free hours to my personal life, and by the time the business launched and I began working “full-time” again, she was about eight months old (highly recommend this timeline for any moms/soon-to-be moms out there!). Had that not been the case, I definitely would have had time for other projects for at least the first year of product development, and I think I would have appreciated it. Of course, some businesses may take up all of your time from the get-go, so it takes some analysis of your specific situation.
What was your first big expense as a business owner and how should small business owners prepare for that now?
There were several large expenses at the beginning, from formulation costs to investing in a product developer (fairly predictable costs for a skincare brand). However, one of the first large expenses that I was not expecting was the legal fees for securing our trademark. I was not fully aware of this before, but once you narrow down potential brand names, you need to enlist a trademark lawyer to conduct extensive research on each to make sure that there are no conflicting trademarks or brands out there. I think about four of the brand names I wanted came back with conflicts after a search, and each round was a financial outlay. When I finally landed on a name that the lawyers deemed viable, I faced additional fees for the trademark application. That first application was actually denied, so I incurred those costs twice!
If you feel that owning the trademark is important to the value of your business—as it definitely is for consumer products like beauty—I would recommend budgeting for this from the get-go. You can begin by speaking to trademark attorneys and finding one who can provide an estimate of fees that fits within your budget.
What are your top three largest expenses every month?
Inventory, PR, and future product development.
Do you pay yourself, and if so, how did you know what to pay yourself?
I do not pay myself yet but plan to begin by the end of our second year in business.
Would you recommend other small business owners pay themselves?
It is hard to say, as it depends on so many factors. For VC-funded brands, it is common for the founder to receive a salary. If you have a service-based business, it also may be easier to pay yourself sooner as you are lighter on assets and do not have to reinvest in expenses like inventory. It also depends on your goals for the company. If your goal is to sell your business after a short time horizon, you may not prioritize a salary and be even more focused on growth to reach that payout.
For me, it is important to factor in my salary to our financial goals, as I plan to run the business for the long term. I know that it will be incredibly rewarding to live from the work that I love, and it will only make it more viable for me to put all of my energy into the business. However, I am initially prioritizing our growth and reinvesting our revenue until we reach certain milestones.
Photos: Anita Calero Courtesy of Giovanna Campagna
Where do you think is the most important area for a business owner to focus their financial energy and why?
Maintaining a healthy cash flow is crucial; more so than profitability when you are starting out. Focus less on breaking even at first and more on your ability to generate positive cash flows.
Did you hire an accountant? Who helped you with the financial decisions and setup? Are there any tools or programs you recommend for bookkeeping?
I work with an accountant on my tax returns and currently manage the monthly bookkeeping myself. I recommend using Quickbooks for bookkeeping.
I was actually pursuing an MBA at Columbia Business School at the time I committed to launching the business and used virtually every resource available to establish my financial model. I took several courses in entrepreneurship and conducted an independent study with a professor, during which I defined the business plan and launched into product development.
I also did extensive research by speaking to more seasoned beauty entrepreneurs, founders, and friends with applicable experience to understand the costs and where they experienced the best return on their investments.
What apps or software are you using for finances? What’s worked and what hasn’t?
Currently, I am just using Excel, which has worked well for me.
What are some of the tools you use to stay on top of your business financials? What do you recommend for small business owners on a budget?
Our online store is on Shopify and they provide a great suite of analysis tools that help you track how sales are going as well as manage inventory.
How did you know you were ready to hire and what advice can you share on preparing for this stage of your business?
Currently, I am still the only full-time employee. I do feel like I have a “team” because I work with several outside consultants and freelancers in product development, formulation, graphic design, etc. Once it becomes clear to me which area of the business needs more support in order to keep achieving our growth targets, I will begin the search for someone with that expertise. I am happy to have a “lean” operation while I learn more about our customer and market and the best way to connect with them.
Do you think women should talk about money and business more? Why?
Definitely! I think being fully aware of your financial situation, both personally and professionally, is hugely empowering. Money can be tied up with a lot of emotions for some. When I was younger, I sometimes avoided looking closely at finances out of some kind of fear. But I have found that normalizing conversations about money, knowing your situation and your options, actually makes you feel very empowered. Numbers don’t lie, which can actually be very comforting in a world with a lot of grey areas!
I have also come across some women who don’t necessarily feel comfortable saying that they are going into business with making money as a primary goal. I have, personally, come to see business as an incredible way of exchanging energy with the world and creating value for our communities and others. Receiving financial compensation as part of that, which can, in turn, enable you to support yourself and your family, should be something we are proud of.
Do you have a financial mentor? Do you think business owners need one?
I often ask fellow entrepreneurs for advice, but ultimately make most financial decisions independently. As I don’t have a partner, I often talk through them with my husband, who is a wonderful sounding board.
What money mistakes have you made and learned from along the way?
A great piece of advice I received is to always get three quotes for a job before moving forward. Early on, I ended up paying way more than I needed to by going with the first vendor that I came across.
What is your best piece of financial advice for new entrepreneurs?
Arm yourself with knowledge. Talk to anyone and everyone who can give you insight into your industry. Make projections of your expenses to the best of your ability, and then add a 20% cushion to that figure.