Founder: Steve Smith
Business: 2Puggles
Revenue/Month: $15K
Founders: 1
Employees: 1
Website: 2puggles.com
Location: North Carolina, USA
Founded: December 2014

From a humble 3-year experiment to a steadily growing part-time business, 2Puggles is a testament to the power of creativity and determination. Founded in December 2014 by Steve Smith, a high school marketing teacher, 2Puggles specializes in handcrafted wooden products, such as earrings, bookmarks, coasters, and clocks. The business has been on an upward trajectory, with last year’s revenue reaching $15,000, despite Smith’s limited availability due to home remodeling.

In a recent interview, Smith shared the inspiring story of how he created 2Puggles as a learning opportunity for his students. He aimed to demonstrate the potential of building a successful part-time craft-based business from scratch. What began as an experiment has evolved into a thriving venture, with the majority of its revenue generated during the fall season.

Over the years, 2Puggles has experienced fluctuations in income, with January through March typically being low or zero revenue months. However, this year has shown promising signs of growth, as the business has already grossed $500 by mid-January. With his home remodeling project completed, Smith can now devote more time and energy to 2Puggles, which he believes will contribute to a significant growth year.

Backstory 

Steve Smith’s journey to founding 2Puggles is both inspiring and educational, stemming from his experience owning and operating two manufacturing businesses, losing everything after September 11, 2001, and eventually transitioning to a teaching career. In 2005, he began teaching marketing in high school, but the desire to run a small business remained in the back of his mind. Smith emphasizes the importance of learning by running the business, and not being afraid to start, even if it means making mistakes along the way.

When Smith and his wife bought a home requiring significant remodeling, he purchased a table saw to do most of the work himself. While researching table saw techniques on YouTube, he discovered a video on making snowflake ornaments. This inspired him to create oak snowflake earrings, which received an overwhelmingly positive response from colleagues at his school. Although initial sales attempts on Etsy were unsuccessful, Smith used this experience as a teaching tool for his marketing students, launching a 3-year business experiment with them.

Throughout this process, Smith shared his journey with his students, allowing them to witness the growth and development of 2Puggles firsthand. The first year was focused on learning the business, the second year on building brand awareness and identifying a business focus, and the third year on niching down and becoming revenue-focused. 2Puggles has since become an effective teaching tool while simultaneously fulfilling Smith’s entrepreneurial ambitions.

In the beginning, Smith designed and manufactured all of the products himself, starting with wooden earrings. He used customer feedback to refine the manufacturing process and improve profitability. Over time, he expanded his workspace to include a 16-foot x 35-foot workshop, a room in his garage for laser engraving, and a room in his basement for assembly, storage, and a winter workspace.

Initially, Smith invested in a $250 table saw and other equipment purchased at an auction for less than $100. Over three years, he upgraded his tools and equipment, with plans to invest in “last tool” items that will last him, and potentially his children and grandchildren, a lifetime. Smith started 2Puggles with a self-loan of $100, and the business has since sustained itself, with most revenue being reinvested into the company and his workshop.

Launch Process

The launch of 2Puggles was a pivotal moment for Steve Smith, who decided to test the waters by setting up a booth at a street festival in April 2015. His approach was simple: create a booth, showcase his products, and gauge the response. Depending on the outcome, Smith would either move forward with the business or abandon the experiment altogether.

Despite the festival being marred by poor weather and allowing for only an hour of selling time, Smith managed to sell $130 worth of earrings and received invaluable feedback from customers. This initial success spurred him on to attend more shows throughout the year, learning the ins and outs of selling at such events and ultimately generating $5,000 in revenue.

In the second year of the business, Smith and his students embarked on a small Kickstarter campaign to raise funds for a laser engraver. They set a goal of $600 and exceeded it by more than double, enabling the purchase of a quality laser engraver. This acquisition expanded the customization possibilities for 2Puggles products, leading to new earring styles and the unexpected discovery of a strong market for bookmarks.

Smith’s experience with 2Puggles has taught him valuable lessons, the most important being that not every product idea is worth pursuing. In the first two years, he experimented with various products, some of which did not generate significant revenue. Once he honed in on his target market and focused on products with high demand, his sales grew rapidly in proportion to the effort he invested in generating those sales.

Marketing Strategy 

Since its launch, 2Puggles has explored various methods for attracting and retaining customers, including maintaining a website, selling on Etsy, utilizing social media, and attending craft and art shows. Among these strategies, in-person selling events have proven to be the most effective in both acquiring new customers and generating repeat business.

In the first year, Steve Smith attended any event that would allow him to set up a table, even if it meant not always covering the booth fee. Regardless of the outcome, each show provided valuable insights that helped shape the business over time. By arriving early to set up and engaging with other successful vendors, Smith quickly learned the best practices for participating in shows and received recommendations for the most promising events to attend.

In the second year, Smith began his selling season in May at the Saxapahaw Farmer’s Market on Saturday nights. These 3-hour events not only generated revenue to sustain the business until the more lucrative fall season but also provided an excellent opportunity for inexpensive market research. Smith used these shows to introduce new products, solicit feedback, and gain insights on what would and would not sell.

Over the years, Smith has built strong relationships with fellow vendors and customers at these shows, which has led to a steady increase in repeat business and word-of-mouth referrals. By August each year, Smith narrows down his product offerings for the fall season, focusing on creating and selling those items from September through Christmas. This strategy has resulted in a recent spike in customers reaching out to purchase products between shows, demonstrating the effectiveness of in-person selling events for building a loyal customer base.

Future Plans

Today, Steve Smith is optimistic about the future of 2Puggles. Though the business has not yet turned a profit in its first four years, it has remained cash-positive. The lack of profit is mainly attributed to the continuous investment in upgrading machinery and equipment for the workshop.

Smith does not meticulously track the cost of goods, but the material cost is considered negligible. To continue producing a product, it must yield at least a $50 per hour gross margin after the second production run. Currently, earrings generate between $75 and $100 per hour, while bookmarks and coasters yield $100 per hour. Clocks, a new addition to the product line, have sold well in their first three months, but their exact margins have yet to be determined.

For the foreseeable future, Smith plans to remain the sole proprietor of 2Puggles, as it allows him to maintain tight control over the brand’s reputation. In the coming year, he intends to maintain the earring, coaster, and bookmark offerings while placing a greater emphasis on developing and promoting the clock product line. This strategic focus ensures that the business continues to evolve and meet the changing demands of its loyal customer base.

Lessons Learned 

Throughout his entrepreneurial journey, Steve Smith has learned valuable lessons that have contributed to the growth and success of 2Puggles. One particularly important lesson, albeit a cliché, is to remain persistent and committed. By getting up every day and focusing on the tasks at hand, both good and bad experiences will come. However, persistence ensures that the positive outcomes ultimately outweigh the negative.

Another key insight Smith gained is the importance of having an external motivator. In his case, sharing his business experiences with his marketing students has been a significant driving force. It has helped him stay accountable and maintain focus, even during challenging times. Imagining the conversations with his students and the lessons he could share has often been the catalyst for Smith to remain dedicated to his work, even when distractions beckon.

These lessons not only demonstrate the power of resilience and motivation in entrepreneurship but also highlight the impact of sharing one’s journey with others. By engaging with his students, Smith has created a unique and fulfilling experience, allowing him to grow both as an entrepreneur and an educator.

Starterdom Insights

Success Factors: Why did 2Puggles Succeed?

The success of 2Puggles can be attributed to several factors:

Persistence and commitment: Steve Smith’s dedication to his business, even during challenging times, has been crucial. By consistently focusing on tasks at hand and staying committed, he ensured that positive outcomes outweighed the negative experiences.

Market research and customer feedback: Smith has used in-person selling events, such as craft and art shows, to gather valuable market insights and customer feedback. This approach has enabled him to refine and improve his product offerings based on real customer needs and preferences.

Learning from others: Smith has been proactive in seeking advice from more experienced entrepreneurs at selling events. By learning from their tips and tricks, he has been able to refine his approach to attending shows and generating sales.

Adapting and evolving product offerings: Smith has been responsive to customer feedback and market trends, continuously refining and expanding his product range. This adaptability has helped him cater to his target market more effectively, leading to increased sales.

External motivation: Sharing his business journey with his marketing students has been a significant driving force for Smith. This external motivator has kept him accountable and focused on his goals, ensuring the continuous growth and development of 2Puggles.

Strategic focus: Smith has prioritized specific product lines and areas of growth, such as the clock product line, enabling him to concentrate his efforts and resources on expanding his business in a targeted manner.

Key Lessons to Learn from the 2Puggles Founder Story

Persistence and resilience: Success in business often requires the ability to persevere through challenges and setbacks. By staying committed to your goals, you increase the likelihood of achieving positive results in the long run.

Importance of market research and customer feedback: Understanding your target market and incorporating customer feedback into your product development process can help you create offerings that resonate with your audience and drive sales.

Continuous learning and improvement: Be open to learning from others, refining your skills, and adapting your strategies as you progress. Stay informed about market trends, and be prepared to evolve your business to stay competitive.

Leverage external motivation: Find sources of external motivation, such as sharing your journey with others or setting accountability measures. This can help you stay focused and committed to your business goals.

Strategic focus and goal setting: Prioritize specific areas of growth and set clear, achievable goals for your business. This will enable you to concentrate your efforts and resources more effectively and drive measurable results.

Embrace trial and error: It’s essential to take risks and experiment with different approaches, products, or marketing strategies. Learn from both successes and failures to refine your business model and achieve growth.

Don’t be afraid to start small: Starting a business as a part-time venture can still lead to success. Begin with a small investment and gradually scale up as you gain experience, confidence, and market traction.