Ron Park, 25, talks starting his supplement company while he was at university, the hit the business has taken from Covid-19 and the importance of cash reserves.
What does your business do?
We provide green lip mussel oil for supplements and topical cream, our products are designed to relieve pain for people with joint pain. Our goal is to replace fish oil as an alternative sustainable source of Omega 3.
Mussels grow on a rope, they are farmed in New Zealand, they are filter feeders so all they do is filter through water, clean the water while they are at improving the marine environment so they are much more sustainable, whereas, with fish, the whole industry destroys marine life and exploits the fish population as well.
What was the motivation for starting it?
I had the idea through university, three years ago. I was part of this programme called UCE (University of Canterbury Entrepreneurship) and that's where I went through the programme and pitched this idea.
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My family are health fanatics and we love health supplements. I'm actually from Korea and we used to take New Zealand supplements before we moved here about 16 years ago, and when I was at uni I wanted to do a business and hustle so I thought about taking supplements at a young age and that there was probably a lot of people out there that wanted it so I started exporting, sending supplements out to Korea.
Long story short, I found out that some companies in New Zealand import the ingredients from overseas, like China, for the supplements and they just bottle it here and sell it as a New Zealand product, so that made me want to start my own company that was a little bit more transparent and to sell products that were actually from New Zealand.
I looked at ingredients thinking about something that was true to New Zealand and that's when I thought about green lip mussels.
How big is the team?
There used to be eight of us, but now we're down to six now, including me. I realised that more doesn't mean better.
What are your long term plans?
Fish oil is in every household globally so I want mussel oil to be in every house instead, that's my ultimate goal. The short term goal is to invent a new technology to make mussel oil cheaper because it's super expensive at the moment. We're actually working on something around this with the University of Canterbury too make that happen, but I can't disclose any information about that at the moment.
I think it's a realistic goal. In the next three to five years I feel as though if we can make it affordable people will choose mussel oil because of the health benefits around it being better than fish oil, and in terms of sustainability, it is better than fish oil. The only barrier is the price point. Our products are quite expensive just because it's expensive to make it.
We have three products at the moment, and a fourth coming out, but lockdown happen and everything has been pushed back. We have the mussel oil in 50 capsules for $49.99 and 200 capsules is $190. We also have mussel powder capsules in 30 capsules for $30 and our muscle oil cream is $34.50, sold in pharmacies and health stores.
What is Kōrure plans for exporting?
We began exporting in 2018 to South Korea. We have certification and are doing paperwork to export to Vietnam, Thailand, China, Australia and America.
How has Covid-19 impacted your business?
It has definitely affected us negatively because we definitely rely on the export market in Korea and China. In January and February our export market was damaged a lot and now our domestic market has been damaged. It's been pretty tough for us, but we've got to do what we've got to do to survive this. We were going really well before this.
We don't have a fall back plan, just because I believe that this pandemic is going to make people realise how important looking after your heath is. Once people get over this, I think more people will consume more of our products.
How are the supplements made?
Our muscles come from Marlborough Sounds and Banks Peninsula and then they get driven to a factory in Christchurch and processed. The mussels are removed from its shells and then grinded and freeze dried and then the powder gets extracted into oil. It's quite a lengthy process because as soon as you add heat it damages all of the fatty acids because they are very volatile so we have to be careful to ensure all of the nutrients don't get damaged. Lastly, the capsules are sent to Auckland to get packaged.
Why is it so important for a firm to have cash reserves?
Having cash reserves allows a business to survive in difficult times, a great example of this is the pandemic that's happening right now. Covid-19 has caused a significant economic downturn, resulting in huge losses for businesses globally. Having cash reserves means businesses and its employees can survive during a financial crisis, and instead use this as an opportunity to plan for the future. Possible options for businesses with cash reserves are to bootstrap and survive, pivot into another business venture, or exit with profit. On the other hand, the likely option for a business without cash reserves is to close the business with a loss, which is far from idea.
Knowing your numbers and knowing how your numbers work is crucial. If you can't read your numbers then you won't know if you are going to be able to survive the next three months, because you don't know your cashflow, then your business will fail.
I've been bootstrapping until now. I'm still arguing over $100 with my suppliers like 'Can you make it cheaper'. I still live like a university student and everything that I earn goes back into the business for it to grow.
What advice do you give others thinking about starting their own business?
Save money - a lot people start a business without this. Save money for things like the epidemic like what is happening now so you can actually survive.
Start the business straightaway, just do it as the Nike slogan goes. A lot of people think too much and try to prepare too much and then they end up not doing it or missing the opportunity. Sometimes ignorance is bliss and what you don't know you don't know and you tend to just work it out. That was me because I just did it, then I realised I didn't know so much. If I knew what I knew now, three years ago, I wouldn't have started the business because there was so much to learn.