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Sustainable Business Models for Design Companies

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  • zamb
    Senior Member
    • Nov 2006
    • 5834

    #16
    Originally posted by Faust View Post
    I don't know much about this, only anecdotal evidence. All I can say is

    1. Develop a strong aesthetic, one that people can relate to.
    2. Develop your story. People often relate to the designer behind the work.
    3. Forget the masses, go for the niche
    4. Do things slowly. It's not the number of store you are in, it's the kinds of stores you are in.

    Well, I suppose you already know all of this, so I don't know why I wrote that, lol.
    definately, but its always good for someone else to reaffirm what you already know
    “You know,” he says, with a resilient smile, “it is a hard world for poets.”
    .................................................. .......................


    Zam Barrett Spring 2017 Now in stock

    Comment

    • Casius
      Senior Member
      • Dec 2006
      • 4772

      #17
      No I completely understand Zamb and if you have all the capabilities of doing the samples/production, that is a great way to go. No better control on your product, that's for sure.
      The "organic" business you speak seems as though how most business' run (or at least the ones not funded by outside sources).

      Having a retail store seems somewhat of a big risk to me. Or maybe I read that wrong...
      "because the young are whores. dealers come to carol to get the rock"

      Comment

      • asis
        Member
        • Dec 2008
        • 47

        #18
        [QUOTE=Casius;140145]Also, I'll disagree a bit with Asis a bit. Without good design a company might not ever make it out of the gate. I will agree on the fact that good business sense is what keeps it going but I think Design/Business go hand in hand. You can't have one without the other.

        I agree with what your saying I meant more as time spent not importance.

        Comment

        • zamb
          Senior Member
          • Nov 2006
          • 5834

          #19
          Originally posted by Casius View Post
          No I completely understand Zamb and if you have all the capabilities of doing the samples/production, that is a great way to go. No better control on your product, that's for sure.
          The "organic" business you speak seems as though how most business' run (or at least the ones not funded by outside sources).

          Having a retail store seems somewhat of a big risk to me. Or maybe I read that wrong...
          I think i have to diagree with you a little here, alot of these companies go into significant debt to do evens and activities that generate publicity. The hope is that it will drive sales and allow them to ultimately pay their debt or find an investor (the latest Thom Browne story is an excellent example of this). I am talking about only doing shows when the company can affort to pay for it, not investing in ridiculous things that add no value to the product or the company etc.
          I once read an article where Sir Paul Smith thought about selling his company and there were numerous eager takers as his company was debt free. if this economy dont recover many companies will be in alot of problems, because of bad habits and excessive waste.

          Also I dont want the discussion to be only about me. I would like to hear about other companies and things that they do thatr you think is good business practice.
          “You know,” he says, with a resilient smile, “it is a hard world for poets.”
          .................................................. .......................


          Zam Barrett Spring 2017 Now in stock

          Comment

          • Jon
            Senior Member
            • Apr 2008
            • 677

            #20
            First of all, Zamb, it's very humbling to see someone with as much experience and insight such as yourself seeking information and opinions on this subject. I'm sure there is a lot that we could learn from you; I hope that my contributions are useful.... I originally had something like this typed out which was lost in my original response.


            Regarding money, design businesses require a lot of capital. I can't think of any that don't require either outside investment or massive debt. This always brings in more people to the creative and business processes so I can't stress enough the advantages of having a partner that can help cope specifically with the business side of fashion/design.

            For me I find a lot of interest in the dynamics this creates and how vital it is to have the right people in your business. I think it makes design a unique industry as the creative people (usually) are put at the top - they are the employers and there's no way out of that relationship.

            So, the relationships between individuals play a huge role. The requirement for specialized skills and roles require the smallest businesses to simplify, and usually have individuals who play many roles.

            By most relative measures, SZ's content is based on small-scale production design companies. I've found that the successful businesses always has a business-minded individual(s) working very closely with the designer(s) and helping to make the transition between concept/idea and the sale. Often these people are also financial partners.

            As this is a theme that seems to be true with so many companies I've come across, it almost seems to be desirable to have someone you can trust - and most importantly, someone who believes in you - in the trenches with you allowing you to focus on the creative aspects of the work. Ann Demeulemeester has Ann Chappelle, Rick Owens has Michele Lamy, and there are many, many more examples.

            How you go about finding this person is another matter - I don't imagine it's a simple proposition.

            Of course, first and foremost is always having the best product possible and just like any artisan having pride in your work. I'll think about what I can contribute to that...
            Originally posted by merz
            perhaps one day pipcleo will post a wywt so non-euclydian & eldrich in its shapes as to turn all onlookers into throngs of dishevelled, muttering idiots

            Comment

            • Alesha
              Senior Member
              • Apr 2009
              • 303

              #21
              Zamb, I assume you already have a thought out idea for the business, the brand and the production. So I believe your main target for brainstorming session here is what you defined as "operating costs". Now its an assumption so if I am wrong, do not be mad :)

              Those expenses are mostly tied to marketing:
              - Retail
              - Advertising & PR

              Recently I been creating an launch campaign for one of more mainstream clothing brands, that none the less was very conceptual for the market where it was starting up at (By end of next week I'll be able to name the brand due to NDA).

              The promotional expenses are very vital, and ridiculously high. For more niche oriented and expensive product that I assume you are launching, there is a promotional idea you might utilise. Its been sucessefully used to market luxury realty in the past, and I am not sure anyone yet adapted it to the fashion business. I got it from method used by japanese Hakuhodo agency and it was also described to me recently by former CEO of TurkCell.

              Basicly you need to narrow down the niche you are aiming at, and than finding a way to engage your target audience into the brand, and than make them your promotional drivers. It is very difficult to achieve, BUT if done right minimises expenses with very high sale increase.

              First find touchpoints which you can afford and use to speak to your audience. SZ is a good one, but there are likely many many more.

              Engage the Audience heavily. Find how to hook them to deliver and share knowledge of your brand with others, they are your best communication channel. I think its vital to start word of mouth for fashion brands.

              Find who you plan to compete with. Which segment.

              Differenciate - your company needs to stand out compared to others. Julius is very diffirenciated brand for example. Perhaps finding a few differenciation points between you and competition.

              If you are interested I could go into a little more ideas, but you'd need to give some specifics:

              1) Competition: what brands you will have to compete with
              2) Target Audience: who will buy what you produce
              3) What makes your product different?
              4) Where do you plan to sell your product atm?

              Basicly perhaps we can come up with a few ideas on what "new media" can be used to promote your brand. I believe that the conventional promo-channels are too costly and ineffective, and not something you are actually after.

              Edit: Excuse the ridiculously bad english.
              Last edited by Alesha; 04-21-2009, 10:19 AM. Reason: Typos
              Originally posted by interest1
              I'm pulling you off my friends list if you don't put down the vodka.

              Comment

              • Magician
                Senior Member
                • Jul 2008
                • 709

                #22
                Prominently wearing your brand and having your friends do the same seems to help?

                I understand A Bathing Ape's early success came from Nigo (the founder) giving his tee shirts to musicians and DJs prominent on the club circuit, giving him a lot of brand exposure in the niche most likely to buy his clothing.
                Selling badass McQueen topcoat 48/38/M. I also write and tweet.

                Comment

                • Faust
                  kitsch killer
                  • Sep 2006
                  • 37852

                  #23
                  I love it how every non-native English speaker with great English says how bad it is :-). Nonetheless is one word though ;-)

                  It is sound advice you give, Alesha - if only Zam had money for PR.
                  Fashion is a form of ugliness so intolerable that we have to alter it every six months - Oscar Wilde

                  StyleZeitgeist Magazine

                  Comment

                  • Alesha
                    Senior Member
                    • Apr 2009
                    • 303

                    #24
                    Well thanks Faust ;) For ликбез and kind word.

                    Basicly I managed to clasp the fact that zam wants to avoid increadible PR expenses (btw I do not believe that fashion PR is actually worth the money it costs most of times) that were common for 2000s marketing up untill now. Thats something that using Engagement of Audience can help to avoid. Its more of advertising than PR in classical sence of word, but generally there are some VERY inexpensive ways to get rather great results. Naturally no PR/Ad agency wants to use those methods becouse its bad business for them. Uhu if I can make a campaign cost ten times less using "new media" for agency it normally equals 10 times less income. So usually only individual consultants (who normally also work for said agencies) can point the direction.

                    The idea for touchpoints is actually quite neat. Every business is an enviroment, that is closely linked and surrounded by ways how they communicate with the audience... Anything from shop to package is direct contact with brand. However this is just the first ring that spreads from the rock (brand) thrown in water of people's minds - there are many other rings that go from it - word of mouth, adaptations, cultural correspondence... And so on. If you dig really deep you can find great ways to inexpensively (ideally for free) bring awareness to your brand and draw people to buy it.

                    Strong branding is not always expensive.
                    Originally posted by interest1
                    I'm pulling you off my friends list if you don't put down the vodka.

                    Comment

                    • reborn
                      Senior Member
                      • Aug 2008
                      • 833

                      #25
                      here are my 2 cents:

                      1. take a basic accounting class (college, continuing ed, whatever). you will learn the basics about a balance sheet, income statement, cash flow, business language, how to file a corp. tax return, etc.
                      2. define your success regularly (weekly, monthly, seasonaly): $X in sales; 1 new customer for the season; cutting your expenses by 25%; etc.

                      Comment

                      • zamb
                        Senior Member
                        • Nov 2006
                        • 5834

                        #26
                        Originally posted by Alesha View Post
                        Well thanks Faust ;) For ликбез and kind word.

                        Basicly I managed to clasp the fact that zam wants to avoid increadible PR expenses (btw I do not believe that fashion PR is actually worth the money it costs most of times) that were common for 2000s marketing up untill now. Thats something that using Engagement of Audience can help to avoid. Its more of advertising than PR in classical sence of word, but generally there are some VERY inexpensive ways to get rather great results. Naturally no PR/Ad agency wants to use those methods becouse its bad business for them. Uhu if I can make a campaign cost ten times less using "new media" for agency it normally equals 10 times less income. So usually only individual consultants (who normally also work for said agencies) can point the direction.

                        The idea for touchpoints is actually quite neat. Every business is an enviroment, that is closely linked and surrounded by ways how they communicate with the audience... Anything from shop to package is direct contact with brand. However this is just the first ring that spreads from the rock (brand) thrown in water of people's minds - there are many other rings that go from it - word of mouth, adaptations, cultural correspondence... And so on. If you dig really deep you can find great ways to inexpensively (ideally for free) bring awareness to your brand and draw people to buy it.

                        Strong branding is not always expensive.
                        Alesha,
                        Thanks for the comments, alot of the things you are suggesting, are indeed along the lines of similar ideas I have, some clearly worked out, others I am still working on. One of the reasons i had shut it down two years ago, was that I began to feel like all I was doing was serving others. I felt like it was always about the PR, the Showroom, the Press, the this the that. there was such a wall of separation between oneself (designer) and the customer. hence my desire to do retail,
                        Id rather invest my time developing my ideas properly, and having my own store, along with a few other stores i can deal with directly, than the whole lot of money wasting nonesense that dont seem to have measureable results.

                        But as i said before, I would really like to hear about companies you guys admire, from a business structure stanpoint. I like the suggestion/ advice and welcome them but dont want the thread to be about me.
                        “You know,” he says, with a resilient smile, “it is a hard world for poets.”
                        .................................................. .......................


                        Zam Barrett Spring 2017 Now in stock

                        Comment

                        • zamb
                          Senior Member
                          • Nov 2006
                          • 5834

                          #27
                          Originally posted by reborn View Post
                          here are my 2 cents:

                          1. take a basic accounting class (college, continuing ed, whatever). you will learn the basics about a balance sheet, income statement, cash flow, business language, how to file a corp. tax return, etc.
                          2. define your success regularly (weekly, monthly, seasonaly): $X in sales; 1 new customer for the season; cutting your expenses by 25%; etc.
                          My wife works in Finance, Manager at a bank I shall not name here
                          her father is an accountant for the Canadian Government, so i have alot of help in that department. I can do accounting if I really apply myself,( had to do it for the company in the past) but my strong area is in developing Ideas from a technical stanpoint...........more of a tailor, or clothing engineer in a sense

                          I really do have a specific view of what I want to do, just using past experiences and gathering as much new information as possible to plot a realistic course to successful results
                          “You know,” he says, with a resilient smile, “it is a hard world for poets.”
                          .................................................. .......................


                          Zam Barrett Spring 2017 Now in stock

                          Comment

                          • Alesha
                            Senior Member
                            • Apr 2009
                            • 303

                            #28
                            Brands that I personally admire:

                            Dior Homme - a perfect example how a designers vision can create a truly outstanding brand from scratch, form the new story and experience by merging a lot of cultural context together, rather than sticking directly to clothes. (Oh and I am talking about Hedi Slimane time, KVA time... Just annoys me, I hope Gareth Pugh will change things for better). Everytime I come to Milan I just can't pass by DH store without buying at least something. It just resonates with the right vibe.

                            Julius - a brand with heavy industrial leaning, is brave undertaking. The industrial particulary resonates with my bleak world view perhaps but it also flows just perfectly. Hard to find him sometimes though.

                            Denis Simachev - a story of sucesseful PR and unexpected success (and hell he knows how to engage the right audience even if they do not like his designs). The bar he opened by his shop used to be one of hottest places in Moscow and probably greatly lifted his brand image. ( a curious business model too) Of course none of this would be possible without some sponsors he has.

                            Chronicles of Never is a good example of interesting brand from the middle of nowhere.

                            And I am sure someone else already mentioned CCP here at least several times ;)
                            Originally posted by interest1
                            I'm pulling you off my friends list if you don't put down the vodka.

                            Comment

                            • Faust
                              kitsch killer
                              • Sep 2006
                              • 37852

                              #29
                              Simachev, lol. There is someone who should quit while he's ahead.
                              Fashion is a form of ugliness so intolerable that we have to alter it every six months - Oscar Wilde

                              StyleZeitgeist Magazine

                              Comment

                              • Alesha
                                Senior Member
                                • Apr 2009
                                • 303

                                #30
                                Faust, you put it very well. I decided to avoid the critics. However his story is very exciting disjunction, very rare for the modern fashion market ;)

                                I tried to remember if I actually saw anyone in Simachev... I think young russian rich student girls back in 2005 did buy him heavily ;)
                                Originally posted by interest1
                                I'm pulling you off my friends list if you don't put down the vodka.

                                Comment

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