Investing in students and staff created unexpected growth for Formula Botanica

Online organic cosmetic school Formula Botanica used its financial reserves to reinvest in its people, students and platform during the lockdown. The decision has resulted in significant growth.

When the pandemic started, the first thing owner Lorraine Dallmeier did was to look at the company finances. She could keep staff on and had an opportunity to support freelancers who were losing work.

Lorraine said the risk she took by investing, rather than holding onto cash, has helped the business thrive during the pandemic.

“Everyone else was in panic, shut-down mode, pulling investment out left, right and centre and I thought, ‘I wonder what I could get out of this right now?’,” she explained.

Using financial reserves to support staff and contractors

Lorraine keeps a “sizeable war chest” so the company can honour the commitments made to customers, some of who are taking courses that last several years.

Lorraine started by reassuring staff there wouldn’t be any lay-offs or pay cuts. Next, she looked at their contractors. Most of their work from clients outside of Formula Botanica had disappeared overnight.

“I thought about the fact that we had a healthy war chest and I asked our contractors if we could increase their hours,” Lorraine said.
“In one case, we quadrupled a contractor’s hours. It was quite a scary thing to do, but I knew that if we invested now to improve our systems we would be more prepared to go back up again, even if we saw a downturn in the short term.”

Make sure you give customers something back

As a company that has a global community of 10,000 students, it was important to Lorraine to respond to their needs during the pandemic.

“People look up to the brand we’ve created and it’s very much founded on kindness, support and lifting people up. I didn’t want to abandon that in the pandemic in a big panic about whether we would make sales or not.”

The team asked its community how they could support them and the unanimous answer was “get us formulating and give us something for free”. Lorraine responded by diverting some of her team to put together a new online course for free that was sent out to their entire community. Within two weeks around 7,000 people had signed up for it.

“People loved it. We had some great feedback from people saying, ‘it’s a really negative time in lockdown but you’re lifting our spirits and giving us this for free’,” Lorraine explained.

Recruiting staff against the odds

Off the back of the enthusiasm for the new course, the company went into a launch period, opening up enrolment for a big package of courses.

The outcome was not what Lorraine had expected. Sales increased by 65 per cent, proving that there was still a huge appetite for online learning. And the growth hasn’t slowed down yet – she expects the company to grow 70 to 80 per cent this year.

To continue to operate at this level, Lorraine could see that she needed to increase the team’s capacity, so she made the unusual decision to start recruiting during lockdown.

She has already recruited five full-time staff to increase her remote-working team to 25 people and has another nine roles to fill. Her latest recruit is a recruitment coordinator, a crucial role to help find people with specific skill sets.

“I have a plan for where I want my brand to be and the number of people I need. We’re constantly growing and scaling and we need to get up to full capacity as soon as possible.” 

Get clarity on how to reduce your costs, run a lean business machine and de-risk your planning and forecasting. Download our guide on the essential steps towards business financial recovery.