CASE STUDY

A solid foundation for a solid shampoo business

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How A2X helped Honua Bars start on the right foot

Solid shampoos and conditioners are having a moment. In a world hungry for plastic-free solutions and green alternatives – and obsessed with natural beauty products – they’re increasingly popular, and the market is booming.

Roughly a year ago, Sophie Thwaites stepped into that niche with her homemade bars – now called Honua Bars. Based on Australia’s Gold Coast, she had struggled to find shampoo and conditioner that worked for her hair and wanted to stop buying plastic bottles. Making her own solid, concentrated bars in an old bathtub turned out to be the best solution.

“I surf a lot and I go through so much conditioner. I thought – is there any way I can get shampoo and conditioner, not in plastic bottles? I started Googling and I realised that shampoo bars were a thing. I loved them and then I thought, maybe I could start making these myself,” she explains.

In her time away from her job as an analyst, she started making and selling the bars as a side business. Six months later, she decided to turn it into a full-time job – selling bars direct to consumers through Shopify. Even in that short time, she’s gained valuable insight into the market and pivoted to a new target demographic – and she’s about to make another major change to her business model.

“I wanted younger people to buy them, but they don’t – it’s too expensive for them. So now I’m going to appeal to a more premium audience. I’m changing my branding and I’m coming up with a new range.”

‘It’s just easy, it does everything for me’ – starting right with A2X

With a background in accounting, Sophie wanted to manage the accounts herself – with a bit of help at tax time – and make sure everything was tidy, right from the start. Using Shopify and Xero took care of some of the work, but an accountant friend recommended another tool.

“A friend who’s a chartered accountant and runs his own side hustle said, ‘Whatever you do, get one of those apps that transfers the pay-outs into Xero and does all the lines for you, especially when it comes to GST and international tax’,” she explains.

With this advice in mind, Sophie went looking for options – and quickly found A2X. She explains that A2X appealed because of its straightforward instructional videos and clean design – and the fact that it seemed simple enough for her small-scale business.

“The instructional videos were just really simple – I was able to set it A2X up myself in five minutes. It had good reviews and the others either didn’t have good reviews, or they looked too big for what I needed. I don’t need a million different platforms, I’m literally just using Xero and Shopify.”

Unlike many eCommerce newbies who start with nothing and quickly develop an accounting headache, she started using A2X and Xero straight away – and she’s seen the benefits already.

“I had it set up right from the start, before I started trading. I didn’t have to import or backdate anything. It’s just easy, it does everything for me.”

Taking care of all the little details

Using A2X, along with Shopify and Xero, has let Sophie focus on building her business. Everything is automatically calculated, which means she can minimise the time she spends reconciling accounts and rechecking transactions.

“I really like that it just automatically puts things on to different lines, like the discounts and the shipping taxes, then sorts out the GST elements and just does all the stuff that I would never really have thought to do, even though I’m an accountant. You literally just have to approve the invoice and then click yes. So I spend minimal amounts of time on Xero reconciling them,” she says.

Because all her sales and purchases have been managed this way from the beginning, she anticipates that sorting out taxes at the end of the year will be reasonably straightforward.

“I’m doing PNL analysis, and I’m recoding things that I’ve done wrong. And so when it comes to tax time, it should be pretty easy. I’ll have everything mostly in the right place. I will get an accountant to help me maximise the taxes, but I have a really good foundation from what I’ve got in Xero.”

For a new business owner trying to keep up with direct sales, branding changes and marketing – not to mention making the actual product – this simplicity has been a relief.

From bathtub to factory – and beyond

The next step for Sophie and the Honua Bars brand is scaling up from homemade to factory production. This shift will let Sophie reach a wider audience and sell to wholesalers as well as direct to consumers. Homemade bars, while appealing to some buyers, aren’t practical to make on a larger scale.

“Going forward with the new factory range, I would expect to be at least 70-80% wholesale. Right now, I don’t want to do any wholesale because the bars take so long to make, they’re so fiddly – and the sheer volume that they require as well for wholesale,” she explains.

As the business changes, being set up with A2X will keep things simple. Sophie will be able to track purchases from wholesalers and individual consumers, as well as the different prices and taxes too. She already uses A2X to manage different payment gateways – like Paypal and Afterpay – and as her business gets more complex, she’ll be able to track new payment methods as well.

It’s about making the financial side as clean and easy as possible, so she can focus on growing the business – and getting her bars out to as many people as possible. As Sophie puts it, she can’t imagine it any other way.

“I don’t see how you could not use it if you want the accounts to be right, because unless you want to go and code all the stuff yourself every time…well I don’t see how people have time for that. The alternative is, your accountant is going to have a bit of a time at the end of the year, trying to sort out a year’s worth of stuff. So, you save yourself heaps of time – I don’t see why you wouldn’t!”

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