Sydney woman Katie McCarthy turns side hustle business Scrunchiko into $100,000 success

The Sydneysider has turned her side hustle – and an unexpected product – into a sporting success and all while still working full time.

Katie McCarthy is surviving on four-and-a-half hours sleep a night but it’s paid off as her side hustle making scrunchies raked in $100,000 last financial year.

During the week, the Sydneysider gets up at 4am to go to the gym for an hour-and-a-half, then works all day as an oral health professional, before coming home and working on her business, Scrunchiko until 11.30pm. On Saturdays, she is at the post office when it opens to send off orders and then she heads off to her fabric supplier.

It’s a busy life, but she wouldn’t have it any other way. She launched Scrunchiko in 2018 with just a $1000 investment.

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The Rugby 7s Spain team with their Scrunchiko’s at a Sydney event. Picture: Supplied

Spotting a gap in the market for sports scrunchies that were functional but also fashionable, she also saw an opportunity for making custom accessories for sporting teams. She picked up a $200 sewing machine and registered her business name with ASIC and hasn’t looked back.

“It’s crazy as you know with the investment of $1000 and then within two years to turnover more than the average Australian salary, which is around $60,000 to $70,000, and to make more than the minimum salary in Australia – I never expected that from a scrunchie,” Ms McCarthy told news.com.au.

“But the uniqueness of the brand drives sales and the custom-made base is extremely loyal. The majority of people know that they are handmade and want to support something made in Australia as it’s quite rare to find a brand that is Australian made.”

But the business didn’t initially soar as she made just around $4000 in her first year of trading.

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(L-R) League player Amy Fiddling, track athlete Lani Withnall, Scrunchiko founder Katie McCarthy and Just Train owner Crystal Maguire

Everything changed when she reached out to Danielle Davis, captain of the Parramatta Eels NRL Touch Football premiership team, on Instagram to send out a sample. Not long after, she was sending through scrunchies for the full team.

Since then the list of sports stars wearing her scrunchies has grown, with Scrunchiko worn by six players in the Australian Open, the Australian women’s basketball team, the Opals, and all Rugby Sevens teams in 2020.

“I’m well known for making the matching scrunchies with uniforms and I’ve made some for the Wallabies team and all the 4 WNRL teams and the main reason that people buy them is they are supporting a small business that has a passion and purpose for supporting women in sport,” Ms McCarthy said.

“The fact the team can contact me and I can colour match to their actual uniform – you can’t go to a shop and buy the exact Pantone for uniform – that is what sets my business apart from anyone else’s.”

The huge range of scrunchie colours available. Picture: Supplied

There are a range of scrunchies that come in around 40 colours and sell for $12. The most popular is the range called ‘aktive’ scrunchies, which are made from sweat and water resistant material, are quick-drying and hold hair securely without breaking it.

There’s also a luxe velvet and eco linen friendly range.

“The most popular for the sports teams are standard black and white, red, royal blue and navy,” she said. “Girls who want to stand out buy patterned scrunchies or the custom scrunchies from lilac, bright blue and white or orange, blue and grey.”

So far she has sold 50,000 handmade scrunchies but she isn’t stopping there with big plans for her business.

“My plan is to expand into other accessories and my goal is to a be a sports accessory brand,” she said.

“I would really like to turn other accessories that you can get anywhere else into sport accessories. So I have a high ponytail hat that also has a sweat band which goes underneath so you can’t see it and I’ve got another cool hat accessory coming. The whole manufacturing side of things is completely new to me as I made all the scrunchies in my apartment.”

The scrunchies sell for $12. Picture: Supplied

Adina Brown has ordered the scrunchies. Picture: Supplied

Ms McCarthy said she loves being a sole trader as she has learned to trust her gut.

“I was quite introverted and shy in a room of people but opening my business has given me confidence to walk up to people,” she said.

New research found the tipping point for starting a new business is a combination of recognising an opportunity, the lure of financial independence, and a dissatisfaction with a current work situation.

The research from Xero, the global small business platform, found for almost half of people, making their own decisions and working for themselves were top of the list as reasons to become a sole trader. Just under a third took the risk because they wanted to follow their passion and find creative freedom.

Four in five sole traders felt negatively towards their previous job or career before they went out on their own, with Millennials aged between 30 and 39 the most likely to fall in this category. The most common feelings were unhappiness with a former manager, frustrations with lack of control, feeling like they were going nowhere and being uninspired and unmotivated.

“Australia is a nation of self-starters, with sole trader ventures accounting for the majority of our homegrown businesses,” said Trent Innes, managing director of Xero’s Australia and Asia operations. “While many of us may like to lay claim to a great business idea at one time or another, this research shows it takes a particular person and special set of circumstances to truly turn that idea into reality.”