Any business owner discovers the importance of having the necessary knowledge of how finances, credit, and debt management converge in a business venture. Pairing this knowledge with wisdom allows the entrepreneur the opportunity to grow a thriving enterprise.
Profit and loss are keenly felt when the budget is best described as “shoestring.” The majority of the population does not have millions of dollars to invest in a startup company. Instead, the greater number of small business owners tend to initiate businesses which revolve around a personal skill or talent, or the development of a product they feel would be in high demand. Whatever the driving factor, small business owners face financial challenges and lessons on a daily basis.
Mykl Warwas runs a short-term vacation guest house. The rural Eveleth vacation rental has been in operation for about eight months, and is listed on the popular website Airbnb.com. In this instance, Mother Necessity had a say in the venture.
“We had moved out of the house and planned to sell it,” Warwas said. “But it wasn’t ready for sale yet, and we needed to rent it to help with expenses. We decided to try this instead of long-term renting, partly because we wanted to be able to keep working on it in between guests. From there, it’s grown into something we enjoy.”
Most of his guests come for family getaways, though some are in neighboring areas on business or are in town for special events. The guest house sits in the country just off Highway 53, on 21 acres. The Warwas family has worked hard to make sure the house is a comfortable home away from home for up to 14 guests.
“It’s always neat to hear when guests have really enjoyed their stay,” Warwas said. “So many of our guests are birders.” The nearby birding destination Sax-Zim bog is one of the attractions to his location. He and his family have built and installed birdhouses of various kinds on the property, which have the birds flocking to the guest house as well. “We have put so much effort into the wildlife on our guest house property, and as much as it wears us out many times, it sure is a lot of fun too,” Warwas added. So far, they have feathered visitors such as great gray and barred owls; redheaded, piliated, and hairy woodpeckers; red-breasted and white-breasted nuthatches; black-capped chickadees, robins, and more.
The birds have been influential not only in Warwas’ life – he grew up making birdhouses with his grandfather – but also in his son’s life.
“My oldest son (age 13) has gotten pretty good at planning and building birdhouses with me, and he enjoys it so much that he decided to try to make and sell some on his own,” Warwas explained. His son, Nigel, has taken quite a few orders and has even branched out as a vendor, showing at Old School Lives. Warwas added, “It has been so great for him. He can make pretty much any type of birdhouse now, and I’m just so proud of the hard work he puts in and the skills he’s acquiring.”
Warwas admits he’s still learning a lot of financial lessons himself. “It’s so much more expensive than I’d originally anticipated,” he admitted, regarding the guest house. “All the little things add up. I struggle with finding a balance of what feels reasonable as a nightly price, but yet is high enough to cover our expenses.”
Warwas is not alone in learning how to balance cost and price of services and goods. Artisan-based businesses also fall victim to this price conundrum. Those business owners, like Warwas’ son, who work with their hands to produce a product find their true costs are never recouped. And like with a guest house business, time is the commodity most often left uncompensated.
Business sense must be in the blood for some. Warwas’ sister, Danyel Filipovich, started her small business venture when she was a young woman. She owns PLAIN & SIMPLE, an old-fashioned homemade soap company.
“PLAIN & SIMPLE started when I was about age 17, so I’ve been doing it almost 30 years,” Filipovich said. Initially she started making soap to bring in a little extra money, but also because many people are allergic to scents, preservatives, additives, and dyes in commercial soaps. Even though the business name has been registered for 20 years, she has only recently begun soap production in earnest as an LLC.
“I go to shows. I have a website. The soap is old-fashioned soap,” she explained. “I don’t know of anybody else who makes this kind anymore. I got the recipe from my grandmother, Olivia. And she got the recipe from the Lewis Lye Company. It was a little pamphlet on ‘how to wash your barn, and dip your dog, and feed your champion hog! Lewis Lye.’,” she laughed. “And it had a few pages on how to make soap.”
She makes simple soaps with a handful of ingredients you can pronounce. Her most versatile is a Basic White bar and is good for the whole body, head to toe. The Basic White can also be used as a saddle soap, a fabulous stain remover – it has removed every stain she has put to the test – and it’s good for poison ivy and poison oak. All of Filipovich’s soaps are made from the same three base ingredients – water, tallow, and lye. In addition to the Basic White, she also produces four other types of soap bars: oatmeal, pine tar, pumice, and goat’s milk soaps. The best part? The goat milk comes from her own goats, which are raised on her rural Eveleth farm.
Filipovich is passionate about producing a basic soap that works well for everyone. As with any artisan business, though, the financial side has to find balance with the product. She has faced challenges, especially in acquiring the lye that goes into her soaps. Where it was once easily obtainable at the grocery store, lye has to be shipped in large quantity to her home and ordered specially. Another lesson has been in pricing her product.
“I have a hard time charging enough,” she admits. Her soaps are $5 per bar, and she charges a flat rate for shipping, no matter how many bars are ordered. Pricing is not the only test she faces. “Now, the ongoing issue is finding an insurance company that will cover soaps.” Filipovich continues to seek an insurance policy that will cover skin irritation.
Filipovich takes her PLAIN & SIMPLE business to area events like Old School Lives and the Iron Range Home Show. She will have her back-to-basics soaps at EarthFest, and at the Miner’s Memorial Building vendor show during the Land of the Loon weekend.
Brenna Kohlhase of Virginia is another avid soapmaker. She started making soaps 22 years ago when her family began to experience skin issues and allergies with commercially made soaps.
“I wanted something more natural with no detergents or fragrance,” Kohlhase said. “I had purchased some sweet natural soap at a farmers market. There was only one book on the market at the time which gave me some basic information and got me hooked. I became addicted to making new recipes with both ingredients from my garden and essential oils for fragrance.”
Kohlhase experimented to get her brand – Velvet Moose Soap – just right, and began gifting them to friends and family. After that, she sold at holiday boutiques out of her home, and eventually was approached by Natural Harvest in Virginia to sell through them. She has sold wholesale goods to a few local stores, and participated in farmers markets in Ely and Tower for about 10 years. Kohlhase now teaches how to make soap at Natural Harvest and the Ely Folk School.
“I began to find that I liked sharing this process with others,” Kohlhase said. “The first time I taught soapmaking was about 15 years ago at a community education class in Mt. Iron. This has become my passion.”
She recently drove to a western Minnesota working farm to teach eight ladies to make homemade soaps using ingredients they have produced on their own farms like goat’s milk, honey, fresh eggs, tallow, and home-grown herbs.
Kohlhase has gleaned valuable financial insight over the years. “One has to be willing to spot trends in the market and then make changes as necessary,” she said. “The market is now crowded with natural products, and because essential oils are so popular, the prices have really skyrocketed. I found it difficult to charge what I needed to for a bar of soap and keep the standards high. That is why I shifted to teaching rather than lose profits by trying to compete with bigger retailers.”
In fact, Kohlhase is hoping to expand to more home-based classes, teaching 5-10 students at a time. “I love teaching and seeing students get excited about soapmaking. This is what gives me the most joy of being a soapmaker and instructor.”
Artisans have the blessing of doing what they love. Successful artisan businesses are built on both a love for the craft and a dedication to making sound financial decisions.
Ann Alaspa is a baker from Embarrass, and she owns Grateful Hearts Family Kitchen. Her baked goods business started in 2015 as a way to help fund a trip to her home country of Myanmar (Burma) for her and her family.
“We picked the business name as a show of thankfulness toward God for the opportunity and gratefulness for our customers for their support,” Alaspa said. “We take special orders and sell at farmers markets during the summer in Tower. I enjoy baking, serving, and visiting with our customers.”
Grateful Hearts Family Kitchen has a selection of products, including breads, cookies, scones, cakes, some gluten-free treats, jellies, jams, and varieties of kimchi and curry powders.
Alaspa was curious from an early age about how breads and cakes were made. She wanted to learn how to bake, but did not have an oven in the home she grew up in. “I dreamt of baking all the yummy treats. My first ever baking was for my husband’s birthday after we married. I was so excited and hooked on baking after that!” Alaspa contributes her baking success to her teacher, fellow Embarrass resident Verna Sutton. (If you’ve ever had “Verna Cake,” you know she had a great teacher!)
To balance the baking side of the business, Alaspa has developed her business sense as well. “I’ve learned to better manage the finances, see what works and what doesn’t, and find and use the best ingredients without going broke,” she explained. “I’ve learned the wholesale side of things as we go, and we are teaching our kids to serve others along the way. Sometimes serving comes before profits!”
For most artisan business owners, family plays a major role in the motivation for success. The venture may spring from a specific need, like Alaspa’s desire to see her family across the world. Other times, it comes from a mother’s desire to be home with her children rather than be employed outside the home.
“I felt like I was missing out on my children’s childhood because I was working all the time, and when I was home I was rushed, busy trying to catch up on housework and meals and feeling stressed out,” said jewelry-maker Liz Engelke of Soudan.
Engelke owns Hook and Stone Creations. She makes wire-wrapped, micro-macramé, and hemp jewelry which she sells through her Etsy store online. Engelke also sells her creations at Ubetcha Antiques & Uniques in Tower, and at Birgit’s Jewelers in Brainerd.
“I was looking for a pattern on different crochet sites for a necklace I had made about 10 years ago, because I wanted to make and sell them, but I couldn’t find the pattern in all my boxes of storage,” Engelke explained. After an online search, she viewed photos of wire jewelry that amazed her, so she simply had to try her hand at it. “I kind of stumbled on this jewelry venture in my search for a crochet pattern.”
Engelke loves a good challenge and is constantly learning new techniques that test her abilities. When it comes to the financial side, she is no stranger to acquiring knowledge. “I’ve learned to view purchases for my business as investments, and to work toward making it pay off.”
For her and many others, the business is also an investment in her family. “I want to work from home so I can be home for my children, and I can teach them all the little things I’ve learned along the way. Hook and Stone has been a side business without a steady income so far, but I’ve decided to put the work in to make it so that I can work from home,” Engelke added.
Lisa Wagenbach of Sauk Rapids also knows about family as a driving force in creating an artisan business. She owns Daybreak Pottery, and makes and sells beautiful, functional pottery pieces. For the last 12 years, Wagenbach has incorporated her love for nature and her spirituality into her pottery.
She first learned the craft through art classes at Vermilion Community College. Her instructor, Chris Koivisto, was instrumental in developing her skill. “He is an amazing teacher. His guidance and support made me keep reaching,” Wagenbach said of her mentor. He lent her a pottery wheel to get her started. “I fired my first load at his house. The rest is history.”
Wagenbach says the most satisfying thing about being an artisan has been using her love for nature and the skill she has picked up over the years to make tangible pieces of useful art. “People can use and enjoy the pieces, and hopefully be inspired and blessed personally.”
For a time, after her husband broke his ankle, Wagenbach’s pottery produced a small income for them. He was out of work for four years, and during that time her pottery inventory continued to increase. “That’s when the Nelimark idea was put into action,” she elaborated. Farmstead artisans often sell pieces at the historical Finnish homestead in Embarrass. “It became about handmade goods and family.”
Wagenbach continued, “It takes a lot of time outside the creative process to make it profitable. It can be as simple or as complicated as you want it to be. Most of my sales are by word of mouth through friends and family.” Over the last five years, she has seen a slowing of the pottery business while she raises her young daughter, Abigail. “Next year, I hope to see an increase in production, when Abigail is in school full-time.”
Creating beautiful things is something that Gilbert resident Sarah Samson can appreciate. She owns Nan Chenille Doll Fashions, an Etsy shop offering handmade doll clothes. “About seven years ago, I began selling my work locally at the Cozy Cottage craft sale in Palo. In 2015, I opened my Etsy store and now sell exclusively online.”
Samson credits her lifelong love of sewing for her successful venture. “Sewing has been one of my hobbies since I was young. American Girl dolls were very popular then, as they still are today, but I did not get to have one as a girl.” When Samson was an adult, her mother bought a doll on eBay for her younger sister, and the doll came without clothing. “We borrowed some patterns from a friend and I sewed my first doll outfits.”
Samson offers historical, literary-themed, modern, and timeless doll clothes for 18-inch dolls in her online store. “Everything I make is one-of-a-kind, heirloom, and collector quality. Working from home and selling online allows me the flexibility needed as a stay-at-home mom.”
For Samson, financial success isn’t just about the money. “Continuing to practice your skills and learn new techniques pays off.”
Local small business owners and artisans are a throwback to simpler days. From hospitality to soapmaking, jewelry-making to pottery and sewing, crafty Iron Range entrepreneurs are determined to bring financial success from their talents and passions. Be sure to offer your support to them by taking note of their contact information.
Mykl Warwas – On Instagram @mykls_ guest_ house or at his Airbnb listing: www.airbnb.com/rooms/27635019.
Danyel Filipovich – PLAIN & SIMPLE Soap – www.plainandsimplesoap.com or 218-750-0463.
Brenna Kohlhase – Email email@example.com to schedule a soapmaking class.
Ann Alaspa – Find Grateful Hearts Family Kitchen on Facebook, or email firstname.lastname@example.org.
Liz Engelke – Hook and Stone Creations at www.etsy.com/shop/HookNStoneCreations or on Facebook.
Lisa Wagenbach – Email Daybreak Pottery at email@example.com.
Sarah Samson – Find Nan Chenille Doll Fashions at www.etsy.com/shop/nanchenille, or on Facebook and Instagram.
Jennifer Osufsen lives in Aurora with her husband and hooligans and is an independent author in addition to writing for Hometown Focus. You can connect with her online through Facebook, her website www.jenniferosufsen.com, or email firstname.lastname@example.org. She welcomes your feedback!