I met an interesting entrepreneur today who sells handmade shoes. This creative entrepreneur has got some publicity and has some interesting customer testimonials. However, despite years of hard work, his brand and sales have failed to take off.
Prodding for some answers, I realize that he has all but given up on the ambition to have a global fashion brand. However, the fact that he has been able to survive for many years is remarkable. The entrepreneur has been great at meticulously delivering his artistic product to his customers for many years. How can he scale his business profitably ?
Getting ready to scale:
What worked beautifully decades ago when he setup his business will not work now, and will definitely not help him scale up. Does the person have the skills to manage both the creativity and the business aspects ? Woefully no. Does he need to bring along partners with business experience ? A resounding yes. Does he have his costing right ? No. Apart from raw material costs, the rest are shaky. Does he have many artisans working with him? Not any more.. the seventy-something and eighty-something artisans are, sadly, a dying breed. Can the person manage 5 times the current orders ? No.
He has to find partners in growth. He has to share ownership with people who bring in the right combination of skills for branding and marketing. This can be a tough call for someone who has always remained in 100% control (or so it may seem) of his business. Giving up control. What if the partner is not right ? Why should I give up control ? I would rather do it my way. Well, the choice is between being 100% owner of a $100,000 business, and being a 25% owner of a $10 million business.
He needs sustained brand building activities. The best place to start is with his existing customer base. The true story of his brand is what will help differentiate his product from cheaper options, if managed well. However, the spikes in publicity over the years have not contributed to the revenues. Succeeding with a handmade product can always be challenging for most artists.
Selling to Customers and Wholesalers:
He needs to take advantage of relationships of retailers with their loyal customers. He needs help with reaching the right distribution networks in the markets that matter, and making sure his product reaches the retailers at the right price. Selling to retailers who are free to sell his product at a price point of their choice, and selling to direct customers online will be a tricky affair.
However, the question is – If all goes well, and we can create the demand, will he still have the artisans to deliver the product ?