Business advice

Hi lovelies! This blog has not been updated a lot, I know. But it's just been a roller coaster ride of events lately and some days are just downright depressing that the mood to write is not completely there.

But today, I have this urge to write about the annoying side of business that people don't normally write about. Everyone paints a great picture when interviewed of course, and even when things are bad, people would say "it's great! we are selling more than before!" Afterall, who likes to hear a bad story, right?

Here is my advice based on my experience for you budding entrepreneurs out there who may think it's great to be in business and want to have a try at it :

1. WHEN SOMETHING'S TOO GOOD TO BE TRUE, IT USUALLY IS
Of course. We all hear this many many times like a broken record. But sometimes, we still fall for it, due to naïveté born out of desperation. Let me share with you how even a hard core glass half empty, incredibly cynical person like yours truly could fall for something that is too good to be true. When I first started in this business, it was a decision to design shoes myself so that I could control the quality, source the leather and add in as much padding as I want to ensure a more comfortable feel to the feet. Also, it meant that I could produce styles that are not the norm, a break from the traditional ubiquitous pump in every shop. I wanted to be different, to be a Malaysian who could design instead of buying ready made designs from China factories and slapping my label on and saying that's designed by me. Boo hoo.
So, after being turned down by many manufacturers in Malaysia due to my inability to promise them big production volume, I managed to locate one Malaysian factory owner who was interested to help me. Good cost price? Yes! Very low production quantity? Yes Yes!! Everything was like ok, we can do the way you want, the quantity you need. The factory owner even had a convincing justification why his factory could accommodate small quantity when others couldn't. That's when my nightmare began. The owner said he will make the samples of my designs. With that spark of hope, I rushed out almost 30 (or was it 50?) designs and handed it to him. All the while I was like "Is he for real? Stop being so cynical, maybe it's time to trust people a bit...." Once I handed over my designs to him, things changed drastically. I did not hear from him for weeks. Decided to give him some time but emailed questions like "how is it going?", "do u need me to clarify some of my drawings?", "do u need my help in sorting and choosing the materials?". None of which he replied. After 1 month of waiting, I called his mobile and he said "It's coming along, but it's not finished yet". This went on till the 2nd month, and the 3rd month, then it was Chinese New Year. A long break. After CNY, I called him and he said "We've finished some samples only, give me till next week, then you can come and look at them". This went on week after week and finally, I got tired of waiting and drove to his factory to find out what was really going on. By this time, things sounded a little strained and I just wanted to get my drawings back and move on. I stepped into his factory and the owner was no where to be seen. I asked his assistant if I could view whatever finished samples (since the owner claimed some were done) but was met by this puzzled look on her face. She went to the back and then came out with her mobile and passed it to me. It was the owner. He told me no, nothing was done and they needed 1 more week. ??? I drove home bitterly disappointed and decided then I should just stop this nonsense as he was never going to get any samples done. I wrote to him and he replied he was alright to hand back my drawings. That following week, I drove back to the factory and the coward did not even meet me, he had gotten his assistant to pass the drawings to me. 4 precious months were wasted waiting. My original plan was to have a shop, but it was a miracle that the landlord decided not to lease the space to me. If he had, I would have put down my deposit and signed a 2 year lease with nothing to sell. Lesson learnt.

Now that I have more experience in the process of shoe manufacturing, I know for sure that there was no way he could have produced those 30-50 samples for me. No way. But I was fresh in this field and had no way of knowing that back then. I was rejected by so many manufacturers, time was running out and I chose to believe due to desperation. Never again.

Obviously, that was a bitter lesson and one that left a deep imprint in me on how unprofessional Malaysian factories can be. Of course, not all are like this, but one bad experience left much to be desired. We all talk so much about China factories being disingenuous but here I was, being scammed by a fellow Malaysian. It feels more despicable that a fellow Malaysian could do this. My advice is, proceed with caution, don't commit to anything if your instinct is telling you something else.

2. DONT GO INTO BUSINESS THINKING YOUR F&F WILL BUY EVERYTHING YOU SELL

F&F means friends and family (aka relatives). I think this is an important rule to apply. Never think oh, since I have so many friends, I can always sell to them in case no one else really buys from me. Well, depends on how much your friends and family members love you. Maybe they will buy from you. But don't have that assumption and you will be fine. I can say that none of my friends are my customers. By friends I mean people who I have known for a long time, since college, not work colleagues. Friends generally won't buy from you, it is the people who you don't know who will be your biggest supporters. Have this knowledge so that you don't take things to heart when they don't buy. You can't let this put you down and jeopardize the friendship bond as they will be there for other things, moral support, free manpower, etc.

Generally, I would prefer that my f&f don't buy from me. It's too much pressure.I think most business owners will agree with me on this one.

3. CASH IS KING PART 1 of 3 : CASH FLOW
This is too obvious. Cash flow is more important for a new entrepreneur than worrying about P&L. At the planning stage of your business, you have to do a cash flow projection of how much you need in order to survive at least for the first 2 years. Some books will tell you 5. Whatever. But my advice is, do a projection and then whatever sum you derive to, multiply that by 5 times. That is the amount you should have in order to start your biz. More money is always better than little money. This is esp true for brand centric businesses like mine where you are trying to build an enduring brand, and not the buy and sell type of business that are popping up like mushrooms these days. There will always be something you never foresaw in your projections, so it's better to have more money than scrimp and save on every penny (like me!) Of course, it's not easy unless you are independently wealthy, or mom and dad is fabulously rich. But whatever it is, ensure you have access to that cash be it via your own funds, parents, relatives or banks before you actually go into business.

I have always been stumped when I hear friends telling me, oh, I want to open a restaurant or cafe or online fashion site and I only need XXX. It always sound so low to me. Whenever I try to tell them it's not enough, they tune off. It's like they have ADD or something, they just think that's enough and I am gonna do this now. Being a brand manager, I have so much experience in planning budgets and it is never going to be enough. Even when I was mulling over my own cash flow projections and covered as many areas with money as I could, it was still never enough. Coz business is fluid and ever changing to many things that are out of our control. 1)Economic slowdown. 2)Labor and material cost surge. 3)Your A&P plan did not work to give you a healthy ROI and you need to switch plans but half of your money has been spent. 4) Your laptop breaks down and you need to get a new one. 5) New opportunities that come along your way which you didn't project for. 6) You spent xxx but did not sell fast enough to earn the money back to further invest. So many things. Access to cash and a healthy cash flow during the first 2 years is VERY IMPORTANT, don't worry about the P&L too much at this point.

I can honestly tell you, my business plan has changed so much since 2010 that it's like a totally new business now, which some areas were not projected for.

4. CASH IS KING PART 2 of 3 : GETTING PAID BY YOUR STOCKISTS
Money out is easy. Money in is never easy. But it's essential for the health of your cash flow. If you do sell to stockists like to online shops or brick n mortar boutiques where they then sell to their customer base, you must ensure that you get paid once they sell your products, consignment or on outright basis. But it's never easy from my experience. And for me, I never like to ask people for money. It's just the lamest feeling. Like begging. In my experience with stockists, only Fashion Valet and Squareroom pay right on the dot (yay for professionalism and good business ethics). There have been retailers who have no qualms dragging my payment for 5 to 6 months, who refuse to pass me to their finance dept, draw up sneaky payment terms, unsigned cheques, wrong business name on cheques which inconvenienced me and further dragged the payment, oh-i-forgot excuse, etc. These are for shoes that have already been sold on their end, yet they drag paying me my portion for as long as they can without an inch of remorse. At the end, seems like I am made to feel like the bad person, the crazy bitch who relentlessly chases for money. What's her deal? My deal is cash if king. Business is not charity. While I don't mind my OWN customers taking my shoes and paying me later, I do freaking mind that my stockists don't pay me on time. Because they have received the payment from the customer for the shoe purchased, so why are they holding that money to themselves for? Don't they realise that if they don't pay their suppliers, how are the suppliers going to want to continue stocking up their shelves?

So ladies, if you need to be a bitch on this part, be one. Because it's do or die in business. And if your stockist can't understand this, then they are not worth to be your stockist in the first place. 

5. CASH IS KING PART 3 of 3 : PAYING YOUR SUPPLIERS
Money again. Good companies pay their suppliers on time. Just like how I don't like to beg and chase for my money, the person supplying you their service would not like to do so too. So pay them on time. I always treat people how I wanted to be treated. So I pay everyone on time, sometimes earlier than due date. Only times when I am a bit late is when I perhaps missed the emailed invoiced, did not receive the invoice by mail or if I am out of the country. But generally, I would miss by a few days, never a month onwards. Lord forbid. How can you expect your supplier to continue supporting you if you don't respect them by dragging their payment. My parents brought me up with dignity and good manners, so even if hardcore entrepreneurs think that's so stupid, why pay so promptly, I will not compromise on my business ethics. So, pay your web designer/copy writer/IT supplier/shipping company/etc on time so that they can continue to support you. It is not a one way street.

6. WORK WITH MANUFACTURERS WHO USE PROPER DOCUMENTATION
I once got in touch with a Spanish manufacturer from a distant friend. This manufacturer seemed impressive when he ticked of international brand names like so and so as his clients. But when he asked me to send him 30% deposit in order to start work on my samples, warning bells came up. Why? Because he did not send me an invoice or any documentation that gave me a peace of mind that his business was legit. Why would anyone want to hand over cash to a person who couldn't even produce you an invoice? That is a basic business document. You want money upfront, you should give an invoice. Or performa invoice.

Should you deal with anyone who refuses to even give you a basic document as such, don't ever deal with them. You may never hear from them again after handing over your money.

7. WORK WITH MANUFACTURERS WHO CAN SPEAK ENGLISH

Personally, I feel that if you are in the business of creation of original products, find a reputable manufacturer or R&D company who is the liaison between you and the factory who can speak ENGLISH. Why? Because I believe that if no one in the company speaks English, it means they are not involve or actively involve in export/international business. Which means their manufacturing quality could be alright, but not up to the standard of international brands. A company who manufactures for international brands would ensure that at least their core team could speak decent English in order to participate in international OEM trade shows and hold proper conversations with foreign clients. And that their quality assurance is higher in order to meet and sustain their foreign clients' demands. When I hear of companies who manufacture with factories where none of its people speak English at all, I will know what and how their shoes will be like in terms of the overall finishing. Believe me, I scrutinize so many shoes now that it's not even fun anymore.

Of course, it's always easier said than done. If you go to China to source, most factories don't speak English. And the ones who do are not exceptionally great. If you go to Portugal or Spain or Italy, it's just like that as well. Many don't speak English. It's a dime in a dozen. Depends how patient and how much time and energy you have to find them. Bottom line, if you have communication issues, don't even start a working relationship with them unless you have a translator at hand at all times. Because there will be many heartaches due to miscommunication, misinterpretation, etc.

8. CUSTOMER IS KING

One of the first thing they teach you in Marketing 101 is : customer is king. So treat them like one. In my years of managing brands, the gratitude to a customer never falters. This translates to my own business by quick replies to inquiries, going the extra mile of delivering to their house at night if they so need the shoes urgently, asking them for their foot length to minimize hassle of wrong size order, etc. Anything and everything I could do to give them a good buying experience. One time, someone emailed me and inquired if one of my stockist had the size she needed for a particular shoe. I forwarded the customer's email to the stockist and the owner replied to me that she has the size in stock. So I called the owner up and asked if she could reply the customer immediately, and her reply stumped me : "Ok, but later can? If I reply now, seems like so desperate". Does it seem desperate? To me, it seemed more like that you respect the customer, you reply her fast so that she is not kept waiting. I mean, if I were the customer, I would appreciate an answer straight away. To me, it doesn't mean that if you are not face to face with a customer, you have the right to answer an hour later or a day later unless you really can't due to circumstances. I mean, if the customer was right in front of you and asked a question, you would be expected to answer her right away, right? U won't stare at her and say, "Miss, come back in 1 hours' time and I will let u know even though I have the answer for you now but I don't want to sound desperate".  Same goes to online inquiries as well. Answer your customer's inquiries as fast as you can.

I was so stumped at the boutique owner's reply, my tongue wilted in my mouth.

As an online shopper myself, I have had my share of bad online or offline practices like replies to inquiries which come 2 weeks later if I am lucky. If not, no reply at all. And these are from big international online shopping sites. Once I asked for a belt from a supposedly customer oriented offline boutique and I was promised a call from the manager in charge. One week later, no call. I had to leave messages twice with the boutique staff until the manager decided to ring me up another week later. Why are these people still in business???

At the end of the day, I believe that if your business has reached to such a level where your customer support can't cope with email inquiries, it's time to invest on getting a bigger customer support team. 

I reiterate, treat your customer like how you want to be treated. Who would you be if not for the customers supporting you? For me, I am always at awe when someone actually wants to buy my creations and I am so genuinely grateful. I wish more business owners appreciate their customers and not let them down by bad/slow customer service.

There you go. Some advice that you may find useful. A tad long, but hope it makes up for the lack of updates!

Till next time!