One Cigarette, episode 3.
Hello, it’s me again, The Fool from Easy Knowledge Channel. In part 2 of the “One Cigarette” series, I talked about the first high note in my startup career, through a business plan called “Selling Flowers on November 20th.” After that event, I’d saved up my first bit of capital: 3 million VND.
After posting episode 2, I noticed a lot of you commenting and asking questions like these (showing the questions).
So let’s break down together what happened to my business journey after I got that small 3-million-VND capital. Was it another high note, or would it be followed by a sad low? Let’s follow along with The Fool from Easy Knowledge Channel — a guy who never quite grew up, wearing every title from…
After getting that first 3 million, my college life drifted along quietly like any other student’s — still buried in studying and working, setting aside about 1/10 of my savings each month. After 3 years of steady saving (sometimes even more than that), I’d built up…
Lesson: if you’re running a business with no capital or very little, learn to combine working and saving with opening up a new line of business (and remember: don’t repeat my mistake from episode 1 of “One Cigarette” — not saving up capital to expand your business).
Back to the story — that year was also my final year of university, when I had to write my graduation thesis. Digital marketing was hot at the time, so I decided to take a further 2-year course at FPT Polytechnic in that field, and started a new business venture in September 2017: opening an online shop selling parts…
The thing is, I got to know another guy (who showed me where to buy components at wholesale price — notably, even buying just one unit got the wholesale rate, and buying more got you a steeper discount). At that point, I got straight to work on a very detailed business plan, including:
1. Capital-use and sales plan
I planned out the use of 20 million in capital over 1 year, from September 2017 to September 2018, split into:
· 40% for marketing and branding costs — 8 million VND (for both wholesale and retail customers),
· 50% for stocking popular components (a reserve for wholesale orders; retail customers got the wholesale price on a single unit thanks to a supplier discount, so no extra cost there) — 10 million VND
o customers would pay a 50% deposit before I shipped, and pay the remaining 50% on delivery,
· 10% for other costs (shipping, warranty, etc.) — 2 million VND.
This capital-use plan was paired with a clear “Revenue, Cost, and Profit Tracking Sheet” so I could check and pin down exactly how much profit I was bringing in after a while of doing business.
Revenue, cost, and profit tracking sheet.
2. Marketing plan
I decided to split my customers into 2 segments:
a) The wholesale customer segment
My strategy at the time was to thoroughly research internet cafés and newly opened phone-accessory shops across Ho Chi Minh City and nearby provinces, through the SWOT analysis I covered in “One Cigarette, Episode 2,” which is showing on screen now.
I decided this was my big customer segment, so I put 70% of my marketing budget into it — equivalent to 5.6 million VND.
At the same time, I researched the right cost and selling price for them, using my 4P marketing strategy.
What is 4P in marketing? That was explained in the clip in the top-right corner, showing the 4Ps illustrated through the movie “Eyes of Innocence,” through the Easy Knowledge Channel team’s playful analysis, along with a few articles about the 4P and 7P on the Easy Knowledge Channel blog, which I’ll link in the…
Specifically for this Big E Gear business plan, the 4Ps in marketing for the wholesale customer segment were:
· Product: gaming gear components including mice, keyboards, headphones, mouse pads, and a few other mobile accessories. Since capital was limited, I didn’t actively sell higher-value components like monitors, CPUs, graphics cards, etc., unless a customer requested them with a 50% deposit upfront.
· Price: split into 3 fitting parts
o 80% operating cost, including:
§ 50% product cost,
§ 30% marketing cost,
§ and technically 10% sales commission (but since I was the salesperson myself, I could cut this cost and turn it into a promotion budget instead) — so this part was effectively close to zero,
o 10% other costs (warranty, shipping, etc.),
o 10% profit.
· Place (sales channels):
o Online orders (for internet cafés in the provinces) via e-commerce channels (wholesale pricing could be set depending on the quantity a buyer wanted), as well as the Fanpage or Zalo,
o and going in person to internet cafés or newly opened component shops to pitch, if they were in Ho Chi Minh City.
· Promotion: use that 10% sales commission to run promotions for internet cafés (could be an extra discount).
b) The retail customer segment
I also put together a fitting retail plan, building a brand image across every e-commerce channel (which was trending in the market at the time).
The 4Ps for retail customers differed from wholesale only in Price, Place, and Promotion.
· Price: split into 2 fitting parts
o 50% operating cost, including:
§ 30% product cost,
§ 20% marketing cost,
o 5% other costs (warranty, shipping, etc.),
o 30% profit.
· Place: online orders through e-commerce channels, as well as the Fanpage or Zalo.
· Promotion: discounts for retail customers of up to 15%.
One notable point was how I ran an SEO campaign to get my products ranking on marketplaces in a fitting, low-cost way.
You can also learn about keyword-SEO methods on e-commerce marketplaces through the articles on Big E Co.’s website, which I’ve linked in this video’s description and comments.
Lesson: when starting any business venture, you need to put together a concrete marketing plan for it, including: customer analysis, SWOT analysis, the 4P or 7P in marketing, along with a marketing budget that fits the budget you calculated beforehand.
3. Assuming the worst-case scenario
· Scenario 1: no retail customers at all
If there were no retail customers for a whole year, I’d lose
o 30% of the retail marketing budget — equivalent to 2.4 million VND, a 12% loss on the initial 20-million-VND capital.
· Scenario 2: no wholesale customers at all
If there were no wholesale customers for a whole year, I’d lose
o 70% of the wholesale marketing budget — equivalent to 5.6 million VND, a 28% loss on the initial 20-million-VND capital.
· Worst-case scenario: no customers at all
If not a single customer bought anything for a whole year, I’d lose
o 100% of the marketing budget — equivalent to 8 million VND, a 40% loss on the initial 20-million-VND capital.
Lesson: when starting a business, you must clearly calculate the worst-case scenarios that could happen to your operations, so you can plan a pivot or a Plan B once that business plan is no longer effective.
Another high note in my career: I brought in a profit of over 80 million VND (10 times the total 8-million-VND marketing spend), over 80% of which came from wholesale customers. So I hit the 100-million milestone after 4 years on the startup path.
THE FOOL — EASY KNOWLEDGE CHANNEL