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. For this installment, we tapped Kiku Chaudhuri, the co-founder of the buzzy hair care brand SHAZ & KIKS. Ahead, Chaudhuri shares what inspired her and her sister, Shaz Rajashekar, to launch an Ayurvedic hair care line, how they self-funded the business, and why it’s worth spending money on QuickBooks.
Tell us a bit about your career background and what you were doing professionally before launching SHAZ & KIKS.
Before starting SHAZ & KIKS, I was working in the digital analytics and strategy space for over 10 years in various industries. Right before launching SHAZ & KIKS, I was working at Condé Nast for Vogue and GQ, leading the digital strategy team. I moved up as the director of digital growth and innovation across all 20+ brands at Condé Nast.
What inspired you to start SHAZ & KIKS and pursue this entrepreneurial path?
SHAZ & KIKS is rooted in sisterly love and our love for our Indian heritage. Our parents are immigrants from India and we spent all of our childhood (and many adulthood) summers going back to visit family, primarily in the northeast part of India, in the foothills of the Himalayas.
As big practitioners of Ayurveda, our grandparents taught us how to take care of the entire body by harnessing the power of Earth’s natural ingredients. Dadu (Grandpa) had the green thumb and Didu (Grandma) took the greens and created nourishing beauty products for the entire family. These formulas and rituals were passed down from many generations of South Asian women and the recipes and traditions stayed within our communities.
A few years ago, we saw a boom in wellness trends, many coming from ancient Asian cultures. But… many Asians were not a part of this boom. So, we made moves. We created space. As South Asian founders, we wanted to bring accessibility, share with integrity, create responsibly, and celebrate cultural stories all while having fun in the process!
Your grandmother used natural ingredients from her garden to create a number of beauty remedies rooted in old Indian Ayurvedic practices. How did seeing her create these concoctions from a young age influence your interests in beauty?
Growing up learning Ayurvedic practices with our grandma from the time we were born, beauty has always been a holistic practice. Beauty went beyond just physical care and there was more emphasis placed on how one takes care of their body and mental health. In terms of taking care of our hair, our grandma would put equal importance on the different oil mixes she would create to massage into our hair as well as educating us on what we should be eating to build hair health from the inside.
Using natural ingredients, both inside and outside your body is a celebrated practice amongst South Asian women. The herbs and plants used in South Asian culture all have such rich histories and stories, and you pay respect to them. Our upbringing and experience with holistic wellness have led to a very positive impact on our perspective of what beauty truly is.
You source some of your raw ingredients directly from small, sustainable Indian farms and artisan collectives. Why is this such an important part of the business you’re creating and the legacy you’re building with the brand?
This is a big part of our business and core to the SHAZ & KIKS mission. One of our main goals with SHAZ & KIKS is to bring integrity and correct attribution to our Indian-rooted brand. Unfortunately, a lot of South Asian ingredients have been used in the Western World with much of their history erased or not correctly shared. These highly nutritious plant ingredients have been used for centuries in beauty formulas and come from ancient cultural traditions and rituals.
An important part of the process is to source them from where they are grown indigenously, from farms that use sustainable and regenerative agricultural practices. Buying our ingredients directly from small, sustainable Indian farmers allows us to support the traditional communities who have kept these practices alive for centuries, and in return, our customers get to benefit from the highest quality ingredients.
Another added benefit of Ayurvedic plant ingredients is that they are incredibly eco-friendly plants—low water footprint, durable, short harvest cycle, fast-growing. Besides honoring these plants, we want to build a responsible cycle of production that is gentle on our planet, reliable for our farmers, and nutritious for you!
How did you fund SHAZ & KIKS? What were the challenges and what would you change?
We have self-funded the business thus far and launched by pulling our savings together. This initial funding helped us get through pre-launch and through the first year. We launched in 2020 with a small quantity of only two SKUs. Our first year acted as a “proof of concept,” making sure that there was a place in the market for us, customers enjoyed our products, and we could feel traction to be a successful business. We put funds towards branding, packaging, design, and purchasing a small amount of inventory that we needed to launch. We kept our vision super lean and focused in the beginning as we started to figure out our place in the wellness industry.
As we finished our first year, we felt more comfortable going out to start fundraising with a friends-and-family round. Now, we are currently in the middle of our Angel round. We have dedicated a lot of our time to collecting data and projections that make us confident in taking external funds from outside investors. If you are able to self-fund for at least a short period of time at the beginning of building your business, I would highly recommend it. It allowed us to build the foundations for launching a successful business. It has made fundraising a lot easier as well. Now we have a year’s worth of sales, a solid product pipeline, retail partners, etc., and all of this has garnered a lot of positive feedback from investors.
What were your first big expenses as a business owner and how should small business owners prepare for them now?
Inventory. Always negotiate your MOQ (minimum quantity order) with your manufacturer. We took our time with finding the right manufacturer to find one that believed in our vision and was open to accepting a lower MOQ. When first starting out, you don’t need to have multiple SKUs. Sometimes, it’s best to pick one or two SKUs and really focus all of your efforts on perfecting these products. Test out the market and then build out from there.
Branding. We spent a lot of time and energy, and money in finding the right designer who helped us create our entire visual language. If you are building a consumer good, experience is key. And that starts from your color palette, typography, packaging, etc. In this competitive landscape, it’s crucial to stand out and create your own space.
Save, apply for grants, look into debt financing for buying inventory.
What are your largest expenses every month?
Inventory. This is not a monthly cost item, since we are not in production every month, but when we do, this is our biggest line item.
Marketing. Besides the two of us, the only other person we have on our team is our creative director!
Do you pay yourself, and if so, how did you know what to pay yourself?
No, we do not currently pay ourselves. We plan to start by the end of our second year.
Would you recommend other small business owners pay themselves?
Everyone’s situation is different so it really depends. If you do need to pay yourself in order to sustain your livelihood, then raising external funds in a pre-launch round should be considered.
However, if you are able to defer payment to yourself, I would recommend that. As a small business, it is really hard to be generating enough revenue within the first few years to be putting money back into the company while also paying yourself.
How did you know you were ready to hire and what advice can you share on preparing for this stage of your business?
For the first full year, we did not have any FTE (full-time equivalent) besides myself. My sister Shaz still has a full-time job and works on our business outside of that. Luckily, there is a wonderful world of freelancers, consultants, and agencies that you can tap into. This is typically a lot easier than hiring someone for your internal team. Over time, you will realize what part of your business needs the most love and attention. Once you identify this, you can hire someone to fill that need. But to start off, I would recommend working with freelancers and if the role starts to grow, you can turn to hire them full-time which is a nice transition.
Did you hire an accountant? Who helped you with the financial decisions and setup?
The first two people we established working with were an accountant and a lawyer. Unless your founding team has these skill sets, it is essential to make sure those two elements of your business have a strong foundation from the very beginning. If not, it can be a lot more of a headache and costly down the line.
My co-founder/sister, Shaz, has a financial background so our accountant helps us with taxes, general bookkeeping, while my sister runs our finances and operations.
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?
QuickBooks is a must. There are other tools out there, but QuickBook is a good go-to to start off. If you’re on a tight budget, you can set up an Excel sheet but you have to be very detailed and thorough. From my experience, QuickBooks is worth the cost.
Where do you think is the most important area for a business owner to focus their financial energy on and why?
Continuing to work towards profitability. It may not be in year one or two, but this is where your long-term focus should be for the business. Managing your cash flow, honing in on your customer acquisition costs, optimizing margins—all of those things will help keep you stay cash positive (or close to it) and lead you down the path towards profitability.
Do you think women should talk about money and business more? Why?
Yes, absolutely! In my experience, I did not grow up in a household that openly discussed finances (my parents thought it was bad manners), but I think that ultimately hurt me as I entered adulthood and was really shaky with money. Especially amongst women, money is a topic that is shied away from but the more we educate ourselves, and have open and frank conversations, the better and stronger it will make us out in the world—both personally and professionally.
Do you have a financial mentor, and do you think business owners need one?
Lucky for me, my co-founder has a strong financial background and is well-versed in running the finances of a business. If it wasn’t for her, I would have definitely turned to a financial consultant or mentor to help me. If you are a business owner but do not have much knowledge or experience with finances, it’s an area you should focus on learning more about. Whether it’s through a mentor or consultant, it’s essential to your success.
What money mistakes have you made and learned from along the way?
The first accountant we started with was not the right fit. She wasn’t an expert in small business and gave us some advice that cost us down the road. Once we realized this, we switched over to someone that had more experience with small businesses. Always make sure that who you are working with is the right fit for your business and business goals. This idea can be applied across multiple parts of the business.
What is your best piece of financial advice for new entrepreneurs?
Be scrappy in the beginning. Focus and hone in on a small number of SKUs or a specific service. Try to keep costs low and put your business out in the world, and then see what the traction is. We’ve had a better experience with fundraising after one year’s worth of sales and a solid “proof of concept”—that’s helped us find the right investors and also raise in a way that’s been beneficial to us.
Images: Courtesy of Shaz Rajashekar and Kiku Chaudhuri and SHAZ & KIKS