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Welcome to The Leap, where women and nonbinary entrepreneurs open up about what it took to get to where they are now. In 2018, women founders received just 2.2% of the $130 billion in venture money invested in the United States. Given these odds, it’s time to get real about what it’s really like to be a woman founder. From raising capital to imposter syndrome, we explore what it takes for women to enter the world of entrepreneurship.
Today, we chat with Julissa Prado, founder and CEO of Rizos Curls, a curly-hair product line whose mission is to help their customers embrace their natural curly hair texture.
What did you study in college and what were your career aspirations at the time?
I went to UCLA and studied international development studies. Back then, I was really interested in microlending and microfunding and I wanted to learn about how policy can influence the economies of different countries. This led me into a deep hole of just business. I interned in Washington D.C. and left not wanting to be in politics anymore. I wanted to figure out what I wanted in life, so I studied abroad in Spain. After that, I decided to get a Master’s in Business Management from Wake Forest.
While I was in school, I interned for PepsiCo which fulfilled my yearning for understanding business and improving my acumen in general. Right out of school, I had a lot of loans and things I needed to pay for, so I got a job with Nestlé which brought me back to Los Angeles.
Where did you first get the idea for Rizos?
I’d had the idea since I was a little girl. But the first conscious decision I made to start working towards it was when I was about 12 years old. At the time, I was working for my dad at his restaurant. He is from a rural area in Mexico and didn’t really get a formal education. But his family has such a talent for cooking and so he had me taking care of the financials, the menu, the website, the payroll while he took care of the food. That was my first experience of building a business. I remember feeling so grown at the time, but I think that speaks to kids with immigrant parents in general. I would get to keep my tips and I remember I started putting half of them in an envelope in my sock drawer for Rizos, for my business one day. I didn’t know exactly what it was going to be or what I was going to do, but I knew I wanted to do it.
In high school, I started making formulas with recipes that my grandmother used to care for my hair and scalp. I would keep them in the fridge and help girls at school with their hair. I would teach them my concoctions and do their hair and they’d see their hair curly for the first time. I did this through college, for at least ten years. It’s funny, when I finally did launch these people were my first customers. All of these people were commenting saying I had taught them to do their hair. I had forgotten how many people I had been doing this with. I was overwhelmed because from the beginning, I never did it with the intention of selling it. It just kind of turned into that.
What were you doing for work before you started building this venture?
I was an account manager in sales at Nestlé. I was the liaison between Nestlé and our retailers, so I was managing beverage, which included brands like NesQuik, and frozen, which included diGiorno, California Pizza Kitchen, Dreyers, and Haagen-Dazs, so big brands. I moved around in a lot of different positions. I got to work in management and managed a team of 11 sales representatives. I was responsible for a $10 million business. I had it made and was so comfortable in my job.
I started making six figures early on and the work was not so hard. By that time I was already working from home, my company paid for my car, my phone bill, my gas, my internet. I felt like I had a sugar daddy who I was addicted to and had me so accustomed to that life. When I got the position initially, I thought it seemed like fun. But I never realized that it was going to prepare me for having my own product that I would one day want to launch into retail. All the same buyers that I was interacting with then are the same ones that I’ve been interacting with now as a business owner. It’s the same game, and I literally got to learn it while at the world’s largest food company.
When did you know you had to leave your job behind?
I did not plan on quitting my job so early. I had been doing Rizos casually on the side for four years and I thought I was going to continue balancing [my job and my business] for at least a year or two. But from the moment we launched I lasted maybe two months and then I put my two weeks notice in. I’ve always been a planner and like to stick to my schedule, but as soon as I made my business go live, from the very first day it’s been non-stop and all of my plans went out the window.
I had to learn to not be so controlling and go with the flow. A big lesson for me was getting used to being uncomfortable. I went from being so comfortable, making great money, having all of these benefits and things to then going into a very unstable place. I realized how much bigger it was than me and that my brand was a movement. Latinas had been left out of the curly conversation for so long and, for them, seeing someone who looked like them and came from where they came from representing and creating something that was catered to them, it was mind-blowing for so many of these women.
Letting go of a steady paycheck is terrifying for most people, how did you deal with the uncertainty?
Even though I had customers, I didn’t take a penny from Rizos for two years. Until very recently, I was living off of my savings. Even if you have a business that’s bringing in money, it’s important to understand that, if you want to build a long-term, sustainable business you can’t get excited about short-term money. You have to look at every single penny that is coming in as how you can use it to build your business. For me, any business that you see that’s growing, it’s because they’re not getting excited about that money coming in and relying on that business—that’s still a baby—to feed them. So I made a decision not to take any money until my business could stand up on its own.
Something I learned from my dad was to always live below my means. Even when I was making six figures, I was always living below my means and saving a lot. Right after I quit my job, I decided not to renew my lease on my apartment. I downsized and moved back in with my parents. After not living with them since I was in high school, going back was like “Oh god.” It was a hard decision, but I knew I had to make sacrifices.
How much did you save before leaving your job?
Before I quit, I gave myself a three-month cushion so that if all else failed I would at least have something to fall back on. A lot of people think that the time to start putting money away is when you have a business, but I don’t think that’s true. Even when [your business is] still just a small idea, I always encourage people to live below their means and save. My dad would always tell me: “You can’t think poor.” To him, thinking poor means getting too excited as soon as you see some extra quarters. He always told me to be aware of what you have and think long-term—those extra quarters can make you a dollar, and that dollar can make you a twenty dollar bill.
When I was at Nestlé, I was always looking into my 401(k), my Roth IRA. I used apps like Mint and Credit Karma and looked at pie graphs of where I was spending my money. Understanding where and how you’re spending your money is so important. When I left Nestlé I didn’t have health insurance—I still don’t have health insurance—but I started a health savings account which I still have in case of an emergency. I have read that the biggest mistake small businesses make is not to understand their cash flow, so for me it was important to make sure from the beginning that I knew where every penny was going.
How are you managing financial stability in your new venture? Have you raised any capital?
I haven’t raised any money, we are completely self-funded. A lot of investors don’t understand the community and culture piece of the business. They don’t understand why I would pay all of this money for my Latina Ladder tour to bring together Latina entrepreneurs or give away scholarships to college students. These things are just as important to me as launching and promoting a new product. Many of the people that I’ve spoken to think these aren’t good decisions, but to me they are.
The way we’ve stayed afloat is understanding where every dollar is going. You don’t have to be an accountant to understand Quickbooks There are so many different tools that help to make sense of cash flow, costs, and margins. One big that has helped me with my business is forecasting. What I did with Nestlé that I now do with Rizos is forecast a year in advance. For example, in 2018 I forecast for 2019—the budget, how much money I have to make, and how much money I have to spend—and I go into it by month. Our marketing is primarily social media, so I also do this with social media growth, looking into tactics, what kinds of campaigns I want to do, how much it’s going to cost, and how much I’m going to make. I feel really good about where Rizos Curls is, we’re on a route to make a million by the end of the year.
As of now, I’m not looking for outside investment, but I also haven’t gone into the beast of large retail which is something that is very likely to happen first quarter of 2020. So, depending on how that goes I may end up needing to do that. But for right now, I have a line of credit from the bank so that keeps my anxiety down. For whatever reason, if I need money tomorrow I can go to the bank and take out $100,000 from one day to the next.
What is your biggest challenge right now when it comes to your business?
Scaling, one hundred percent. It’s one of the hardest things and I’m still trying to figure it out right now. Not just being in these large retail stores nationally but expanding internationally as well. From my experience, the large retail world is not made for small businesses in the sense of the margins and marketing budgets they expect from us. It’s often not sustainable for a small business. Direct to consumer is the way you make the biggest margins, but we’ve made the decision to scale and be more accessible. We’ve also accepted that it’s going to cut into our margins, but it’s something that I want to do not just for us but to prove to these retailers and big corporations that Latina-owned, self-funded businesses are the future.
People of color are so tired of being seen as a number, and of big corporations [trying] to get our buying power but not giving back to us. There is a movement going on right now, and once we truly break in and they see us prospering with much smaller budgets than them, they’re going to pay attention to us. What I learned from working in corporate is that they don’t always care about whether something is right or wrong—they care about money. Once they see the numbers, they’ll know.
What’s been your biggest victory so far?
I feel so grateful for everything, but one of the biggest victories has been entering spaces that people didn’t think I could. We did our first retail collaboration with Nordstrom’s Hot Look and we had our five day sale at the same time as some of the biggest companies. We ended up being the highest-selling hair care brand ever.
They probably expected us to come in pretty low or below average just because we were competing against these huge brands. So for little old Rizos Curls to become the new highest-selling hair care brand was a victory in showing that people of color belong in these spaces. It was kind of a big “f you” to any company questioning our power. For me, constantly going into spaces where people of color or Latinos haven’t been in before and proving how powerful[we are]—and it opening doors for other small businesses that are self-funded—is everything to me.
Transitions and career risks can be rough for your mental health. What do you do to stay grounded?
I try to wake up every day and take time to go into my own mind. After things happen or I meet people, I reflect on how things made me feel, whether things are adding or taking away my energy. I recently decided that I want to scale down on what I’m doing. In a few months, I want to take on less things outside of Rizos Curls and slow down a little bit. Knowing when it’s time to start [slowing down] and doing so before it’s too late is so important. So many people decide to do this when they’re already burnt out. It takes a lot of self-analysis and self discipline, to really understand your feelings and to be able to plan that decision and do it before you’re burnt out.
Do you ever deal with imposter syndrome? How do you cope?
All of the time. Mine comes in the form of feeling overly grateful. I’ll be in certain spaces and I’ll be like “Oh my god, thank you so much for wanting to work with me; for inviting me; for taking the risk of wanting to partner with us.” Though I think it’s great to show thanks and gratitude I forget it’s a two-way street and that we’re both helping each other. It’s good to remind myself to own it, be more confident, and take up more space because I deserve to be here.
Are there any books, podcasts, or other resources that have helped you on your journey as a founder?
I love the How I Built This podcast with Guy Raz and Latinx on the Rise. For self care and meditation, I really like the Let There Be Luz podcast. As far as books, at different times I need different things. I just picked up the Harvard Business Review book 10 Must Reads on Strategic Marketing and am also reading another book called Women Who Run With the Wolves. I’m the kind of person who jumps between two or three books. That’s part of the reason I want to slow down, because I haven’t been getting the time to read and learn. And I think the most important quality of an entrepreneur is the ability and willingness to learn.
What’s your advice to someone who is considering taking “the leap”?
I would say: Girl, if there is some kind of problem or issue and you have an idea for a solution, do it. Do it because if you don’t, these big companies that don’t actually care about [people of color] communities and see us as just another number are going to do it. You have so much power; what they’re going to have to pay for and do the most in order to try and replicate, you already have the insider information. For fellow Latinas specifically, go read the 2017 Nielsen report on Latinas; read up on stats about our buying power and consumer behavior, and just start.