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Sew News Magazine

From our April 2003 Issue


		Sew Biz CONSTANCE HALLINAN LAGAN To be a successful professional clothier, learn from others’ mistakes as well as your own. Continued from page 1

Bypassing Expert Advice

What do tunnel vision, limited perception and selective reality have in common? They’re all afflictions affecting large and small business owners alike.

The big guys bring in consultants for objective, unbiased remedies for this malady. The small guys often do nothing, denying and/or ignoring symptoms until the affliction is full-blown and it’s too late to restore the business to health and prosperity.

Too frequently, professional dressmakers mistakenly believe it’s their very closeness, their day-to-day, hands-on approach to running their businesses that makes them “the expert.” Micro-management has its advantages; however, it has a downside, too. When we’re so close and intently focused on the business itself, we sometimes don’t pay attention to what’s going on with our competition, customers, suppliers and industry events.

Put aside the ego--no business is perfect, and everyone needs help from time to time. Routinely rely on consultants, advisors and networking as preventive medicine. Meet with an accountant at least once a year for strategic tax planning. A financial planner, a marketing consultant, an attorney and an insurance agent should complete your “advisory board.” You may never need to call on them, but it’s wise to select key people before an emergency or crisis occurs. Avoid being in the position of having to select an advisor under stressful conditions. Your consultants need not be costly if you utilize creative options, such as bartering services, using student interns from local colleges, networking and contacting government agencies.

Disconnecting From Customers

Creating works of art in the form of beautiful clothing may be rewarding and provide you with feelings of self-worth and fulfillment. However, without customers to purchase those works, you won’t be physically self-sustained. Customers are your bread and butter-- treat them with care, satisfy their needs, be present for them and remind them often of your existence. You need them far more than they need you.

Welcome feedback, thank customers for expressing any dissatisfaction and be grateful for their input. If you hired a professional research firm to gather this information for you, the bill would total in the thousands. Your customers are giving you this data for free, so value it. The savvy professional dressmaker encourages an open exchange of information regarding expectations and outcomes, satisfactions and dissatisfactions.

Don’t assume your customer is pleased just because she hasn’t complained. Marketing studies reveal that most dissatisfied customers never express their dissatisfaction to the vendor, they just never purchase from that supplier again (and tell everyone else about their displeasure). Don’t let this happen to you. Call every customer approximately one week after delivery to be sure they’re satisfied. Assure them you’re open to hearing their evaluation of your work. If there's a problem, rectify it immediately, before any bad word-of-mouth publicity begins.

Every new customer costs you marketing dollars, time and energy, but when you develop repeat business, these initial costs are spread out over time. It's far less costly to maintain the business of repeat customers than to constantly be seeking new ones.

Undepricing

How much is too little? The pricing coin double-sided. Its first side consists of four elements: raw materials, overhead, labor and profit. You must cover each of these elements to be profitable. When computing the value of your labor, consider the piece’s uniqueness and degree of originality. Stare at this bottom line price for a long time and let the following statement sink in to ensure you’re never tempted to go lower than this figure: If I sell this piece for less than my bottom line amount, I lose money, my business goes into the red and I (if you have children, substitute "my children" for added impact) don’t eat.

The second side of the pricing coin is comprised of two elements: competitors’ pricing and market tolerance. You don’t need to strictly adhere to your competitors’ prices, just use them as a guideline and selling point. If you feel your competitors’ prices are low, study their work. Where are they cutting corners? Then point out to your customers that although your prices might be higher than others (no names, please), you offer quality. Without badmouthing your competition, stress how you design, fit and assemble compared to others. If you believe your competitors’ prices are high, compare your work to theirs. Are you less skilled, efficient, experienced or unique? If not, raise your prices ... to a point.

The second element, market tolerance, determines what the market will bear. There’s a limit to how high you can go without alienating the market. When testing market tolerance, remember it’s always easier to come down in price (just never go below your bottom line price) than to go up. Start high and adjust downward, if necessary.

Constance Hallman Lagan, director of the Entrepreneurial Center for Small Business Development in Holbrook, NY is a professional speaker and writer. Her topics are entrepreneurship, publicity, networking and stress management.

Continued on Page 3 - Problems and Solutions

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