A jewellery maker's big money challenge

Fairina Cheng quickly learned money management after starting her business, explains Sylvia Pennington.

A bold move to start a new business forced Fairina Cheng, a jeweller with no financial or business experience, to deal with the abrupt challenge of an unpredictable income.

Initially, with variable cash flow and a small customer base, ensuring her savings were sufficient to see her through challenging periods while the venture became established, was paramount.

“It’s easy to just jog along but I came to realise that, if I wanted to grow my business, I needed to better understand how the financial side of things worked,” Cheng says.

A former marketing professional, 32-year-old Cheng struck out on her own in 2012 after an evening course in jewellery-making resulted in her falling in love with the centuries-old craft.

Cheng has used her own website; social-media platforms Instagram and Facebook; and Etsy, the online marketplace for artisan and vintage items; to build a global following for her custom-made bracelets, necklaces and engagement rings. 

Fairina working

Fairina Cheng in her Sydney studio, where all her pieces are designed and made.

Getting real

Cheng continued to work two days a week in a corporate role until early 2016, to bankroll her fledgling business, and didn’t pay herself a wage from the business until urged to do so by a business coach.

“I worked more than full-time hours in my business while retaining the corporate role for about five years before I gained the confidence to move on,” Cheng says.

“Eventually I discovered it wasn’t so much the financial insecurity holding me back as the mindset, so soon after I shifted how I thought about my business, I was able to make the leap.”

To save money, feel secure and gain knowledge, Cheng decided to:

  • use a business coach to learn about business finance
  • track her spending
  • cut unnecessary expenses (i.e. eating out)
  • trim household expenses
  • start saving to cope with uneven cash flow.

It was a steep learning curve for a new business owner with little interest in such matters.

“As a creative, it can be hard to get into that mind space where you’re on top of your finances and so I started to work with a business coach to help me address that,” Cheng says.

“For instance, I used to do all my bookkeeping in one go at the end of the year. Obviously, that doesn’t give me any insight into how I’m tracking through the year; it was something I needed to be monitoring a lot more regularly.

“As I gained that understanding, I started to see the importance of applying the same principles to my personal life because it doesn’t make sense to just do it for business. I think it’s important to understand how your personal finances are travelling as well.”

Getting personal

“I never really tracked our spending at all; I didn’t feel I needed to know what was happening and as long as there was a good number in the bank account I was happy,” Cheng says.

Deciding to change that, Cheng used Pocketbook, an Australian-developed mobile app and website that monitors and helps manage personal spending. Users can sync it with their bank accounts, catalogue their purchases and set ‘safely spend’ targets for different categories of expenditure.

For Cheng, the app provided her first big-picture view of the household budget. That up-to-date information made it easy for her to determine where savings can be made.

“It’s interesting to see how much you’re actually spending on simple things like groceries and eating out – and realising that you can make changes and save money.”

Cheng realised that she and her partner were eating out three or four times a week. 

"For two people that is about $40 each time, so up to $160 a week,” Cheng says. “Just being able to save that amount every week is really good. It’s encouraged us to eat in and we plan our meals now instead of just going, ‘oh what do you feel like today?’ and then feeling really unmotivated about making it.”

The pair hopes to accumulate a substantial nest egg; a financial position which has particular appeal to most folk who’ve experienced the ups and downs of self-employment or starting a business from scratch.

With her business now yielding a steady income, it’s a realistic and satisfying goal.

“At the moment we’re not saving up for anything in particular but it’s nice to build up that buffer so we have it to draw on in the future,” Cheng says.

“That way we’re not just relying on what’s coming in at the time. We can start to think bigger and if we want to invest in something or have kids or I decide to expand my business then the money is there. Taking a leap of faith and backing myself in my own business has definitely been worth it in the long run!”

My financial journey is a series from ANZ Women on how Australian women have overcome major obstacles and taken charge of their finances.