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#MyStartupStory: I Fought the Pivot and the Pivot Won

5min read
Business

Pivot: the word every entrepreneur dreads. When a business owner thinks of the word pivot it brings immediate anxiety and stress. Even before we made the decision to pivot, whenever an entrepreneur would tell me that they had "pivoted" I would congratulate them externally but then begin to judge. I would feel, obviously, bad for them because in my mind I viewed it as a failure.


Why does one pivot? One pivots because either what they are doing is not working at all or simply not growing fast enough to reach the next stage in the life cycle of business. Many times, entrepreneurs don't pivot fast enough because they're so in love with their original idea that they can't see the forest from the trees. I get it. It's your baby, your dream, your company. The market should want it. Right? Customers should buy it. Right? You should experience explosive growth. Right? Yes and no. Yes, if your timing is right and all your stars are aligned. No, if you're fighting against the stream wanting the market to listen to you when you are not listening to the market. You know that children's song, row row row your boat gently down the stream? That's a metaphor on life. You want your business to go with what the market is telling you and not against it. Row your boat gently down the market stream and you'll get there much faster.

Before I get into our pivot, it's important to explain how we got there and how our journey began. I had a long career on Wall Street, but I always longed for my own business. I just wasn't sure what that was going to look like. One night over drinks my best friend Leslie and I were discussing the ridiculous amounts of money we were spending on our hair extensions. When I mean ridiculous, I am talking either pay your rent or get your hair did ridiculous. I always say we were so skinny back in those days because we were more likely to spend money on hair than food! But then the lightbulb went off. That's how Lux Beauty Club was born.

We thought, "We're smart, we can figure this out." We started sourcing our hair from various suppliers in China until we found a consistent one, and then we were off. We started selling it to our friends and salons around the city, which then grew to a full-blown side hustle. We had people coming at all hours of the night to our apartment for hair emergencies. I think our landlord must have thought we were selling drugs! Thankfully he was kind enough to simply leave us alone. A few months later we put up a website and we continued growing organically at a steady pace, and once we got on Amazon our sales doubled. We were rocking and rolling until two very significant things happened. Well, three really. Competition got stronger with every influencer "owning" their brand of extensions, Amazon allowing the Chinese to flood their marketplace and most importantly, our consistent quality suppliers started to cut corners and dilute the product. We had been watching a competitor raise millions from venture capitalist firms and, of course, the company was run by three dudes selling weaves to black women. But they, too, started to have major problems with their sources from China. They were getting crushed by terrible reviews, at that moment I knew we had to make a change. It took us months to find a supplier elsewhere that believed in us and would want to do business with us. And, most importantly, still allow us to be competitive. We knew it was imperative we got the source: India.

Now, as all this was happening, I was also spending the majority of my time fundraising for the company. The few investors that came on initially got it immediately, but for the rest it was like banging my head against the wall to get these mostly white VC men to understand the market opportunity. Even, most "female-focused" VCs were a challenge for us. We managed to survive with our angel investors and for them I am eternally grateful.

Once we switched our entire supply chain to India, the quality was a game changer. Although not perfect, we were lucky that we were still small and able to make that change early on. The guys that raised millions, not sure how they would manage. We did have to increase our prices a bit, but we didn't think that would matter. But in the end, it really did. We found that although the customer was getting the best quality for a little bit more, they didn't care. They still wanted the cheap stuff. Oh, and Amazon? Our sales were dropping even there since they were offering hair extensions for $14 dollars. We couldn't compete with that. The signs kept on coming and coming. Our baskets at checkout were over 250 dollars, but we didn't have the heavy customer acquisition dollars to fight the fight. Our Indian supplier was incredible, but you have to remember, human hair is still a human, living thing. No matter how great your quality control, there is always going to be problems.

At this point, my business partner Leslie and I had our come-to-Jesus moment one afternoon. After listing the pros and cons of our business and the constant issues, we knew it was time to change. It was time to SWAAY the narrative.

We had both been wearing hair extensions for years, but because of thinning hair we had recently started using holistic products to help our own hair grow thicker, taking a break from the extensions. We had also both been experimenting with CBD oil for its various benefits, and we had hooked our families on it as well. That's when we had our second a-ha moment. By tackling the issue at the root (ahem) of the problem by taking a holistic approach to hair and beauty. It was a winning combination. I mean, beauty comes from within after all so why not package it that way! Fueling the inside not only benefits your inner self, but it also improves the outer byproduct (hair, skin and nails). It is life changing.

Leslie is a registered nurse so she set out formulating our blends with scientists to ensure we had the perfect elements, vitamins and levels for dosage. We were making truly organic 100% CBD infused products for women by women. It was like a light switch had turned on and we could see clearly. Since the "pivot" we have experienced explosive growth through distributors, salons and our very own customer base. We found she was as loyal as they come. Because after all, who doesn't love CBD? The benefits are tremendous, and we use our products every day. I find solace in knowing our offering is so well-rounded now; the pivot was worth it. We are now rowing gently down the stream and not against the current. It's a product that has a very low return rate since there are zero issues on color, quality, or anything of that sort. But most importantly, I can sleep now for a number of reasons. It has been much easier to find investors that understand our space and want to invest. Wholesale orders have been growing everyday via our network and we are even in talks for licensing deals. But our Sleeping Beauty product has also helped my mood and sleep as well. Shameful plug.

My journey was a necessary one, and though it has been littered with disappointing ups and downs, we wouldn't change it for the world. Why? Because we learned so much on how to build a CPG company that now just happens to sell CBD products. Without that knowledge, we wouldn't have been able to move so quickly. It takes people years to create packaging, formulas, strategy. We did what couldn't be done in 6 months. Experts told us it would take 36 months and be very costly, we knew that was all bullshit. We had the team, the knowledge and now the perfect product. No, has always fueled us but the yesses feel pretty good now.

So, I say to all those out there, if you feel a pivot coming on embrace it; go full steam ahead, jump fully in and listen, fully pay attention. After all you are the one standing in the way of your success.

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Choosing the Right Corporate Structure: Which Business Entity Should You Go With?

Business entities can be defined as the corporate, tax and legal structures which an organization chooses to officially follow at the time of its official registration with the state authorities. In total, there are fifteen different types of business entities, which would be the following.


  • Sole Proprietorship
  • General Partnership
  • Limited Partnership or LP
  • Limited Liability Partnership or LLP
  • Limited Liability Limited Partnership or LLLP
  • Limited Liability Company or LLC
  • Professional LLC
  • Professional Corporation
  • B-Corporation
  • C-Corporation
  • S-Corporation
  • Nonprofit Organization
  • Estate
  • Cooperative Organization
  • Municipality

As estates, municipalities and nonprofits do not concern the main topic here, the following discussions will exclude the three.

Importance of the State: The Same Corporate Structure Will Vary from State to State

All organizations must register themselves as entities at the state level in United States, so the rules and regulations governing them differ quite a bit, based on the state in question.

What this means is that a Texas LLC for example will not operate under the same rules and regulations as an LLC registered in New York. Also, an LLC in Texas can have the same name as another company that is registered in a different state, but it's not advisable given how difficult it could become in the future while filing for patents.

To know more about such quirks and step-by-step instructions on how to start an LLC in Texas, visit howtostartanllc.com, and you could get started with the online process immediately. The information and services on the website are not just limited to Texas LLC organizations either, but they have a dedicated page for guiding fresh entrepreneurs through the corporate tax structures in every state.

Sole Proprietorship: Default for Freelancers and Consultants

There is only one owner or head in a sole proprietorship, and that's what makes it ideal for one-man businesses that deal with freelance work and consulting services. Single man sole proprietorships are automatic in nature, therefore, registration with the state is unnecessary.

Sole proprietorships are also suited to a degree for singular teams such as a small construction crew, a group of handymen, or even miniature establishments in retail. Also, this puts the owner's personal financial status at jeopardy.

Due to the fact that a sole proprietorship entity puts all responsibilities for paying taxes and returning loans, it directly jeopardizes the sole proprietor's personal belongings in case of a lawsuit, or even after a failed loan repayment.

This is the main reason why even the most miniature establishments find LLCs to be a better option, but this is not the only reason either. Sole proprietors also find it hard to start their business credit or even get significant business loans.

General Partnership: Equal Responsibilities

The only significant difference between a General Partnership and a Sole Proprietorship is the fact that two or more owners share responsibilities and liabilities equally in a General Partnership, as opposed to there being only one responsible and liable party in the latter. Other than that, they more or less share the same pros and cons.

Registration with the state is not necessary in most cases, and although it still puts the finances of the business owners at risk here, the partnership divides the liability, making it a slightly better option than sole proprietorship for small teams of skilled workers or even small restaurants and such.

Limited Partnership: Active and Investing Partners

A Limited Partnership (LP) has to be registered with a state and whether it has just two or more partners, there are two different types of partners in all LP establishments.

The active partner or the general partner is the one who is responsible and liable for operating the business in its entirety. The silent or investing partner, on the other hand, is the one who invests funds or other resources into the organization. The latter has very limited liability or control over the company's operations.

It's a perfect way for investors to put their money into a sector that they are personally not experienced with, but have access to people who do. From the perspective of the general partners, they have similar responsibilities and liabilities to those in a general partnership.

It's the default strategy for startups to find funding and as long as the idea is sound, it has made way for multiple successful entrepreneurial ventures in the recent past. However, personal liability still looms as a dangerous prospect for the active partners to consider.

Limited Liability Company and Professional LLC

Small businesses have no better entity structure to follow than the LLC, given that it takes multiple good ideas from various corporate structures, virtually eliminating most cons that are inherent to them. Any and all small businesses that are in a position to or are in requirement of signing up with their respective state, usually choose an LLC entity because of the following reasons:

  • It removes the dangerous aspect of personal liability if the business falls in debt or is sued for reparations
  • The state offers the choice of choosing between corporation and partnership tax slabs
  • The limited legalities and paperwork make it suited for small businesses

While more expensive than a general partnership or a sole proprietorship, a professional LLC is going to be a much safer choice for freelancers and consultants, especially if it involves risk of any kind. This makes it ideal for even single man businesses such a physician's practice or the consultancy services of an accountant.

B, C and S-Corporation

By definition, all corporation entities share most of the same attributes and as the term suggests, they're more suited for larger or at least medium sized businesses in any sector. The differences between the three are vast once you delve into the tax structures which govern each entity.

However, the basic differences can be observed by simply taking a look at each of their definitive descriptions, as stated below.

C-Corporation – This is the default corporate entity for large or medium-large businesses, complete with a board of directors, a CEO/CEOs, other executive officers and shareholders.

The shareholders or owners are not liable for debts or legal dispute settlements in a C-Corporation, and they may qualify for lower tax slabs than is possible in any other corporate structure. On becoming big enough, they also have the option to become a publicly traded company, which is ideal for generating growth investments.

B- Corporation – the same rules apply as a C-Corporation, but due to their registered and certified commitment to social and environmental standards maintenance, B-Corporations will have a more lenient tax structure to deal with.

S-Corporation – Almost identical to a C-Corporation, the difference is in scale, as S-Corporations are only meant for small businesses, general partnerships and even sole proprietors. The main difference here is that due to the creation of a pass-through entity, aka a S-Corporation, the owner/owners do not have liability for business debt and legal disputes. They also are not taxed on the corporate slab.

Cooperative: Limited Application

A cooperation structure in most cases is a voluntary partnership of limited responsibilities that binds people in mutual interest - it is an inefficient structure due to the voluntary nature of its legal bindings, which often makes it unsuitable for traditional business operations. Nevertheless, the limited liability clause exempts all members of a cooperative from having personal liability for paying debts and settling claims.

This should clear up most of the confusion surrounding the core concepts and their suitability. In case you are wondering why the Professional Corporation structure wasn't mentioned, then that's because it has very limited applications. Meant for self-employed, skilled professionals or small organizations founded by them, they have less appeal now in comparison to an LLC or an S-Corporation.