Welcome to the Enterprise Clinic: each issue we will get answers to burning questions from an entrepreneur or ambitious career-changer by grilling the experts – which could help you, too…
Our entrepreneur: Makena Mutwiri
Bio: Age 28, Holds A diploma in advertising. Currently a producer for A company offering photography for print advertising
Business plan: to start her own fashion label, beginning with creative, high-quality T-shirts
“I want to design fashionable clothes for young women who have money to spend on high-quality garments. The clothes will have an African edge, and will be high-fashion at a good price. My items will stand out for their quality, design and creativity. I believe that owning my own business is the way to go in these tough economic times, and can create job opportunities for others as well as granting me a lot of freedom and reducing limitations in my designs.”
Problems: I haven’t yet started my business, due to lack of funds. Most banks don’t offer assistance to people who want to start up a business. I estimate I would need Ksh 500,000 to start my business and keep it running for about three months. This would be for buying materials, paying for any manpower and paying necessary bills. I wouldn’t spend money on advertising at this early stage; instead I’d use the free opportunities available, such as well-thought-out social media.
Our expert panel
Michael Karume - Head of Business Development at Ignite Consulting Ltd (www.igniteconsulting.co.ke), an organisation with the mission “To Ignite Human Potential for Personal and Organisational Success”
John Kaveke - Internationally renowned Kenyan fashion designer, owner of his own fashion label, Kaveke
Monica Kanari - One of Kenya’s most successful fashion designers, with 20 years’ industry experience; currently runs the Occasions ’n Days label (www.ondfashion.com); helps organise The African Fashion Fair (TAFF)
JQ – award-winning creative Kenyan businesswoman and entrepreneur – our mystery panelist
What are my options for obtaining a start-up loan?
JQ Securing a commercial loan for this kind of enterprise, when you are unproven as a designer and business person, will be difficult. The best options would be to borrow from family, or give them shares in the business in exchange for funds. Alternatively, use your own savings until you acquire that track record, proving to banks that your designs are profit-making.
Michael Banks will be sceptical about offering a start-up loan. You can get an ‘angel investor’, who will give capital in exchange for either convertible debt or ownership equity. You could source funds from a micro-finance enterprise with a flexible lending mechanism. You could also opt to start your business part-time and source a loan pegged to your salary. Finally, check on your social capital – enlist friends to spread the risk of the sustainability of the business.
Monica No financier will give you funds without having proven your idea. Start by doing jobs that are within your budget, such as making T-shirts for friends. Learn the business, prove the business, have a guaranteed product and when you have that big confirmed order, go for the loan.
What are the best basic money-saving tips?
JQ Work on production from home initially to save on rent and other location-based overheads. Consider sharing a storefront with an established shop that might want to carry your product. Also, consider online selling.
Michael Yes, run the business from home or from a business incubator – eg, Business Lounge (www.businesslounge.co.ke). Source your raw materials direct from the manufacturers or producers to get them at lower prices. If you need any expensive machinery, lease it rather than buying it so that you have sustainable cashflow.
Monica Get the order first, then produce for that specific order. Don’t go buying T-shirts in bulk because it’s cheaper. Buy what you need, pass on the cost to your customer and this will help you manage your overall cost. In other words, start by doing couture orders or made-to-order, then transition to ready-to-wear orders.
Is it possible to run a business successfully without studying a business course?
JQ Yes, though learning record-keeping, is important – it helps you to know whether you are making money by recording and tracking every cent spent and made. It also facilitates analysis of what needs improving or tweaking as you continue to build the enterprise. You can educate yourself through books, mentors and the Internet, not necessarily a formal education. But experience is definitely the best teacher.
Michael It is possible, if you have the entrepreneurial fundamentals and the right marketing mix: think Product, Place, Price, Promotion.
John As the business grows you will need to acquire some more specific knowledge – fashion and business are so connected.
Monica It is possible, but you need a good idea and the passion and commitment to follow through with your plan. The Internet today is a great source of information.
What are the most likely problems I will experience?
JQ I imagine that the biggest issues will be quality control, staff retention and brand-building through consistency of product quality and professional business conduct. It’s key to forge a resilient enterprise that can survive long term through tough times, so you need to scale the business and build a steady enterprise that provides a profitable exit when you need it – that is, one you can sell as a going concern and reap the rewards of many years of work.
Michael The market has a huge influx of cheap imports – competition is high. The key to overcoming the problem is by providing a high-quality product that is also aligned to the current trends.
Monica The main challenges could be availability of high-quality fabrics, cost of machinery and getting a good location at an affordable price: start-up costs. Once you have set up you must be hands-on to make sure the staff you employ know the quality and standard you wish to achieve.
Is it possible to market my designs solely using social media?
JQ Word of mouth from satisfied customers is a powerful supplement to social media. The key is to have that great product that can market itself on the wearer as they go about town.
Michael It is possible, but it’s critical to have a well thought-out social media strategy that resonates with your market. You need to have a clear assessment of your audience, know how you want to implement your strategy and finally know how you will monitor and measure it.
John Social media is one powerful tool but it’s not enough alone, especially if your target market are not users of this media. You need to get your name out there at fashion events and via product placement.
What are the best networking techniques?
JQ Attend industry events and join industry associations to find mentors, learn about the rigours of the business from the experience of others, and hear of opportunities for collaboration, fashion shows and general market trends.
Michael Attend forums where your target market is – Networking in Heels, Entrepreneurship Club by Cynthia Nyamai, Blankets & Wine. The goal is to engage one on one. Showcase at fashion events, such as the Festival for African Fashion, Swahili Fashion Week and the Kitenge Festival. As you network, make sure you are wearing your brand.
Is Kenya a good fashion market?
Michael Yes – and your target segment has strong purchasing power and doesn’t compromise on quality and trends.
John Anywhere is a good market as long as you create a quality product that meets a need. Fashion is a lifestyle – as long as you create a product right for the existing market, people will spend.
Can a career in fashion sustain me without another career on the side?
JQ Yes, if you are good at what you do, and are professional and reliable.
Michael And provided you apply all the business fundamentals.
John Yes, as long as you both maintain consistency and creativity in your products and also balance your creative and business sides. Treat it as a profession, not a job. Consider styling for magazines and TV productions – good options for supplementing work as a designer.
Monica Fashion can sustain you. But be clear from the start about your reasons for pursuing it as a career. It has its glamorous side, but that is only half the story. It takes dedication, passion and resilience to learn the business. Start with an internship, specific to the fashion field you’re interested in, then after a good period – say, two years – launch on your own.
Got a business idea? Let us help you! Send us your business plans and we will ask a panel of industry and business experts to offer you invaluable advice to help you get started. Email us at: firstname.lastname@example.org