Interview with Kate Wood

When Kate Wood was retuningimage from her summer season buying  trip in India for her business “The Dancing Feather". I met her en-route in Bangkok.  Having agreed to be interviewed by me, there was no better time than as we travelled together to Melbourne together .

I was especially interested to hear how she is able to stay tuned in to the fundamentals of her business. She has many common sense ideas on what many see as complex issues, especially on buying and dealing with multiple suppliers in Asia.

My interest in Kate was not just paternal. The youthful enterprising approach she and her peers take is always refreshing and interesting to hear about. On this occasion i was also keen especially keen to hear about her approach in her business to financial management.

As one who has made her name in her own right,  my Kate wanted to cut right to the chase and dispense with any preliminary questions, such as why and how she began.

So here is the text of our conversation that began with.

To kick this off, Kate  can you tell me what is so special for you about fashion business?

Well when I think about it, the fashion business is no different to any other business I guess; You have to understand the product, the customers and your ability to match them to meet their needs and make a reasonable return on you investment.

Actually in any business where customers come to you, first needs a well sourced product that is in demand. With this needs an ability to package it with service value and then position competitively.

One thing I believe that may be special about fashion is an industry of risk at all levels as it deals at the high end of the retail consumer intangibles. So you need to understand what is changing and how to constantly re-think and re-model it. Only then you can you have at least some assurance that you can be on track to get a return on your investment. “

Ok, so what about the selling approach in the fashion business? How can you do that effectively and complete with the big guys?

Well in this business there is a saying, "The  day you buy is the day you sell" So basically it all starts at that point. And if you get it wrong there is nothing you can do about it.

But once you have a good product landed you must also have a good place to consolidate and sell from. It is all then matter of scale. Customers build up habit and loyalty and want a familiar place to do that with easy access. Be it the internet or a physical  location it is all the same. It  can be anywhere as long as it is well located and consistently on view and promoted.

In the end people buy on two bases, being need or impulse and fashion is more the latter. So being a niche player with personally imported quality product that is different from the way the mass market works. Then as I said it is just matter of being in the right place at the right time.

Is it that simple or does it need anything else?

Of course.  It is a business so you need all the pieces to work. One of the most critical pieces, not only in selling but in the whole business supply chain,  is good people who empathize with the business philosophy and its culture to deliver the product and service well, They are the ones who make customers experience such that keeps them coming back.” That also takes some leadership, which can be very hard especially when it is your money at risk.

What about advice to a newbie, especially on financial planning?

she smiled as she responded with. "I  made all the classic mistakes but somehow have managed to survived so far. But I do know now that to set up in business needs conservative thinking when it comes to money.

One ting is for sure, you always overestimate income and underestimate costs.

What about help. Do you ask your friends or get professional help?

Well I thought I was unique of course because I could do it all it alone and just get some friends to help when I needed it. But I learned that lesson the hard way. You of all people as a consultant know that is a huge mistake.

For a starter ideas have no place to go an test them and be held accountable.

Someone told me once that if you are working hard it is probably because you are not delegating. Being a hero and not delegating naturally limits you doing the more valuable work that cannot be done by others.

I also needed to find a mentor for my business ideas. And despite a coming  from a business family, I needed some independent way to get a financial advice without paying an arm and a leg for it.

As for friends, well as they say there are no friends in business. But I don’t believe that My truth is I make my customers my friends by never letting them down Everyone else is basically a supplier, partner or an employee. You’d be surprised how many partners and employee are also my customers so i do get a lot of help from my friends.

As for personal friends a good rule is to keep that that way and don’t be tempted to help them out or get them to help you on any substantial basis. Like borrowing or lending them money it is a sure ay to lose them. For Family of course the rules are quite different again.

Now that you have some experience how would you advise someone on funding a start-up. Knowing what you know now would you  borrow or just start small and go incrementally or do something else like finding a  partner?

Ok, that a bit of a tough one. But  to start with unless you have a kindred spirit and good timing together partners are just not there for a start up so most times you have to get out there and just do it yourself and learn before you can get a following.

And the only funding you are likely to get is cashing in some perfectly good investment or by getting a loan from your  family if they are wiling. That will get you started with upfront establishment costs and fund working capital items such as stock, advertising, premises staff costs and so on.

The bank for sure will not lend to any old startup or of they do not without seeing a business plan that shows how the loan can be repaid . I found also found this includes projections on ability to grow and refinance internally  things like increased more stock from profits and surplus.”

What about setting a vision. How do you that?

"Well when you start it all seems so simple. Just start and magically it will all happen. The notion it is easy to just go buy something and then with people will just buy would mean I would be very rich with a great life. Well  Isn’t that so far from the truth? In reality you must have least some idea of what you want it all to look like even in two or three years out. And how it will works on a day to day basis to at least  get your money back, Then grand plans to acquire Louis Vitton can then take their place as can the holidays in the south of France"

On money, where is a good source,  the Bank a partner or where else?

"Well to start withy forget the venture capital person who underwrites niche startups with potential to grow rapidly. Unless you dream there are such fairy godmothers and I don’t, they are not likely to invest in fashion.

But for a newbie there are choices. One is to buy small business already established so you have some cash flow and a base to build on. There are people out there with life style businesses that have a good following. Getting one may bring immediate  experience and goodwill to allow you to go to the next level.

Another approach and take a domino approach to building a brand in small steps until you have enough impetus to push into the next level. Even then you have someone support you like a partner with a regular job. But no matter who helps you with cash support, you must always account for it properly and do the ROI sums.

I was lucky my family helps by making me made me go though the rigor to justify to my self my financial plan was sound and I could meet my repayment obligations. Not passing muster on a that means you must always re-think. Don’t take a short cut and ignore this step as many do. And don’t let pride keep you going when even blind Freddie can see it does not stack up .“

You mentioned stock, and recurring costs How would fund this working capital?

Oh that is a real can of worms for sure, especially stock. Things like timing, packages getting lost, stealing, damages, obsolescence quality control returns all combine to destroy the margin. And picking the market right and making sure it is there on time can mean life and death for a season.

On the money side find I must must always have enough funds to carry me through until you get to the breakeven point. In retail with imports the norm,  buying and selling has quite long lead times as you need to pay up front for season shipments that sell many months later. Very few traders will extend credit to a new business, so it is unlikely trade credit is an option. Once you get going it can change and then you have some leverage.

The problem is in any business growth is a drain on cash. Contrary to the pipe dream theory.  One rule I have is the money I need for working capital must be generated by the business. In other words aside form the initial investment, to grow I use only the cash from profit to buy more stock

Also don’t try to pay the initial  investment back in one  season unless you are very lucky with windfalls on high margin stuff. It does not make sense as you cannot generate the same cash twice to both pay back a loan then fund the second season without borrowing part least of it again.

If it is possible that piece should be funded from you own equity so it does not have to go back.

The other rule is dump any stock that is not moving and quick. That is where you cash is and if tied up it will kill you quicker than a speeding bullet

What do you do if opportunities come your way for a quick buck?

I found very quickly that before you start getting any money back from sales it is a one way flow. You must be very stoic and monitor the plan well to maintain your confidence. So above all don’t panic or an buy something silly that is not in your plan. And buying something outside that guideline will leave you poor for sure.

Did Murphy’s law. ever  apply to you and if so how did you stop him from doing damage?

Woe, I am not sure about Murphy but in India yes it is the norm for things to go wrong with great regularity, especially when you are not watching.  It is so easy just to count the cash and think you are doing well. But as with any business with time lag, be rest assured the devil lurks in the detail. Calling the ostrich to help is bad. A head in the sand style of financial management may feel like a good approach, but believe me it rarely leaves you in good shape”.

Ok that’s great. You have the stuff and a process to sell it so what about measurement.

“That for sure is one thing I did not understand well that I need  need a good transactions system to satisfy tax and regulatory needs and a good reporting system to measure results, Then you can could control things like sales and gross profit, expenses and cash and see how they ate doing against their plan.

Kate, as someone who lives by intuition I guess you have learned by seeing what is missing? Even for a YGEN some fatherly advice must have stuck.

Fatherly advice or not as you well know the XY generation do not listen and we are selfish. Which means we learn by stealth and watching and doing what others do. That is often not so good and we have to learn the hard way but you learn not to make the same mistakes twice and when you find something that works and is proven you stick to it. In my case being a complete individual who goes where angels fear to go, some dumb luck and some naive politeness has seen me through so far .

Ok so back to practical stuff . What about taking money out  of your business, What is your criteria. Do to just take some when you need it, or is there a discipline to it?

There is one rule of thumb I have that one of my friends told me. He said you can only spend the profit and then not all of it. Otherwise you  have nothing to buy more stock and grow.

So what I do is draw a reasonable regular salary that I must justify in my plan for the business and I never break that rule even when we have a load of cash.”

One thing your mention constantly, was a plan, what is that and is it formal? If so how do you do it ?

Well at first  I did all my planning in a book at high level. You know ideas with a few sums. But even in the first season when I bought up a lot as I found re planning and modeling the outcomes at category level was vital. I found the category level is the best way keeps it going under control so I moved it into a more detail spreadsheet to track the sales and line items. It actually make my life eerier too. But when I realized I needed to copy and model my buying it was not enough to manage things that change.  I have now moved it all into a database system with more analytical reporting  tools. I find now I can model understand and control product and margins so much better.and my buying is much more focused on what works

I can also do much more clever stuff like work out who is buying what for a range of over the categories with nearly 3000 items that we sell through several channels including markets and wholesale.

As I  have also begun to move into accessories and joint ventures on things like jewelry. So a good process for category planning and monitoring is vital to see impacts on things like bundling and so on .It also helps me a great deal on confidence as I see the numbers come in.

What about the cost of your systems and how do you afford them?

Well I having such advisory skill in the family meant I was lucky to save me the agony of learning what I needed. But I have to that the cost of the software and a computer to run it is nothing compared to the investment I had to make to get my business properly organized so it can work.

And frankly not even with all your help and advice it did not  help me with what I had to myself. And that was to go through the pain and rigor to understand and properly define the processes and controls for my own business.

One ting I know for sure is without it I would not talking to you this way now.

So what about Lifestyle. I remember when you started out you said you wanted a lifestyle business Many people also have the notion that being in business is a way to get independence. What is your positions on that now?

Yes  mine tooas you quite rightly state and I wanted independence to design. Then I  realized the thrill and challenge of growing the business itself.  Once on I was on the sharp end, even though success does not come easily, the alternative choice was obvious not for me.

I now see that an owner’s perspective must be, lifestyle must be seen not as the purpose but a benefit. And  that only comes from the results of business success, So to that end I am still committed. That is my get out of jail recipe so I can have my cake and eat it too.

Ok that’s great but doesn’t doing design conflict with doing the business

Yes for sure and I need to be careful on the mix. Working in the business is not the same as working on the business and I also know  being in business is for one reason only and that is to take care of customers to make money. To think any other way means we should go and work for someone else.

But let’s face it, working for customers directly is still one of the best jobs on the planet. So I combine them both by making quality and good design the base of my products. Be-it mine or someone else’s I figure why not do my customers a favor and run my business well so i can be there for them in long term too.

I had that discussion with Kate’s some time ago and her advice continues to resonate with me as I also consider her ideas for customers of our advisory business. As one who likes to quickly deal with the fundamentals of vision and mission and the various venture execution models I can use this well to cut to the chase. Her experience gives me great confidence do do that.

Kate despite getting started during the recession and being new at your business it is doing just fine. It would seem your labels are doing well and The Dancing feather distribution outlet is doing fine too.

My final question to Kate was

With your success now, given all that you have learned and have been through to get there ,  is there anything you would have done differently if could start over again?

 

"That is an easy one. I would never have started"

image

image

 

http://thedancingfeather.com.au/lookbook.php

For wholesale enquiries
please view our online Look Book and contact
kate@thedancingfeather.com.au

For all other enquires contact
info@thedancingfeather.com.au

Copenhagen 2009: Climate heat is on.

image

image

With the die now cast for the outcomes of the United Nations agreement in Copenhagen on Dec 7th to 18th 2009,  Incoming COP15 president, Connie Hedegaard, says Failure in Copenhagen is not an option. And complexity is no excuse for complacency. There will be unlikely to be a chance again if we miss this one or postpone. To build up again the pressure to get world leaders to deliver will be impossible, so it must be done. Getting the text right and removing the square brackets to make the issues and political choices clear is the work to be done.

But  just weeks before the international conference, the United Nations signaled it was scaling back expectations of reaching agreement on a new treaty to slow global warming. Janos Pasztor, director of the secretary-general’s Climate Change Support Team, was reported last week as saying.

"it’s hard to say how far the conference will be able to go" because the U.S. Congress has not agreed on a climate bill, and industrialized nations have not agreed on targets to reduce their carbon dioxide emissions or funding to help developing countries limit their discharges.

Some years ago. I had the pleasure to meet Tony Mowbray Tony is one of those rare history making achievers along with Kay Cottee and Francis Chichester, who sailed solo around the world.

clip_image001Tony’s autographed print of his log book sits on my bookshelf to serve as a model for achievement. What makes athletes like Tony unique, is their ability to deal with complex and rapidly changing issues and make decisions for both their short and long term survival.

IMG_6570

In 1998 Tony was one of the survivors of the ill fated Sydney to Hobart Yacht race that claimed many lives. The deteriorating climate that saw those sailors lost is high in the minds of world leaders.

Next month in Copenhagen these people will try to agree on a plan to mange the causes of climate change that threatens the very survival of the human race. This will update the expiring Kyoto protocol agreement of 1997.

Ralph Eastman’s Carbon Constrained World Reality report on March 13th on my discussion with Stian Reklev. Stian is Managing Editor of the specialist online newspaper Point Carbon. He is also an often sought after expert on the subject himself. At the time  Stian captured for me the essence what Copenhagen is all about: Namely getting agreement on 1. Emission caps 2, Who picks up the bill and 3. Adaption

Since Kyoto, there has developed more controversy on the climate issue as people learn more. Vested interests have also become stronger and more entrenched. The ability to agree and decide on a direction is vital for the next generation’s survival. But it is equally difficult to achieve. Deciding is quite unlike the lone sailor whose mission is clear. He or she can process information with speed to make very clear decisions, having prepared for all types of risks in advance. But the collective inputs to a climate management, sees interests not in all in agreement. Positions to maintain calm waters status quo, may even prevail, when it is clear to so many there is a storm  coming.

Convinced by the physical evidence, the change activists want carbon limits raised. Just re-running the 2005 documentary “An Inconvenient truth” still cannot be ignored despite opposing denouncement. And reading the daily papers tells you facts that continue to reinforce concern. This week in the New York Times it leads with a headline “Seas Grow Less Effective at Absorbing Emissions”

Governments over the last 10 years since Kyoto, have invested greatly in programs for carbon reduction schemes across the globe. This has created an industry with things like the carbon market initiatives. Hence a balance of interest groups now exist.

Not surprising, is disagreement by many scientists, whose counter arguments are often convincing. Well summarized facts and figures often lead them to say we need more proof before taking action. But what if they are wrong?

While advocates for constraint seek agreement and ways to keep the issue in the public face, the irony is much of the power still rests with those who oppose. They produce the life-giving energy we all rely on and can influence to offer us a stream alternative information. This means if Copenhagen fails they may just keep on sailing unchecked while they search of a solution at some time in the future; Which by then it may be too late.

As “Upton Sinclair” American writer and social change advocate in the early 20th century said “it is difficult to get  people to understand something when their salary depends on not understanding it” This can of course be true of all sides.

So the issues are complex and burdened with well placed facts. figures and modeled outcomes and delivered through highly credible people who argue there is no evidence to support the climate deterioration. Or if so, then there is no evidence it is caused by human activity.

Interesting too is the timing of a headline about a Hacked E-Mail Is New Fodder for Climate Dispute. On Tuesday a British University was reported as being hacked

A NYT report I read cited several scientists pressing the case that global warming is true.

The report also says, “Some of the correspondence recently hacked in a UK University portrays scientists as feeling under siege by the skeptics’ camp and worried that any stray comment or data glitch could be turned against them”.

Other quotes from this same report go on to say “evidence pointing to a growing human contribution to global warming is so widely accepted that the hacked material is unlikely to erode the overall argument”.

The New York Times confirmed the authors or recipients of hacked email messages . The revelations are bound to inflame the public debate as hundreds of negotiators prepare to negotiate an international climate accord at meetings in Copenhagen month, and at least one scientist speculated that the timing was not coincidental.

So what do yachts and their sailors have to do with all this. Some time ago I wrote to my bother, a media professional, to seek his engagement in the debate. I also sought his opinion on climate change and how we should address it.  His edited response refers that 1998 yacht race was in context, I thought it worthy of sharing:

People can throw their hands in the air and jump on either side with that one. Global Warming and Ice Age indeed! Either way, the consequences aren’t all that palatable.

The meteorological details will always be difficult. And what modeling?

I am reminded of a three international atmospheric 3D models used to predict the weather for the 1998 Sydney to Hobart yachts. This extraordinary work deals with complex and dynamic detail but on this occasion none were right.

What was remarkable was the work a privateer who also modeled the interacting vortices, and sea temperatures etc., in the Tasman Sea and Bass Straight, being the race regions.

His radioed warning to the yachts of his prediction of a gale force wind of 90 knots, was life saving to those who got the message. They knew to sail out of the developing storm. Others, who turned back to land for safety, met steep-ling waves, which for many were fatal.

So if it’s so hard to model the climate in the space of a single day, how hard is it to model it over centuries? There is of course some convenient history to work with from the past, including that ironically stored in the Antarctic ice.

Maddening isn’t it?

Regardless of the arguments a Carbon Constrained World Reality just makes sense. But the September 2009 Bangkok UN conference of world leaders and advocates, staged to position for a smooth agreement at Copenhagen, was not encouraging.

Tony Mowbray Autographed Log book

If it needs to be said that failure in Copenhagen is not an option, clearly this it  seems it may be. So the text of arguments must be convincing and hit the mark well so delay is not in the conclusion.

As for Tony Mowbray, giving up was not an option when he faced adversity on his lonely voyage. So is the Copenhagen goal, It is too important.

Those leaders attending Copenhagen, who are determined to make the difference, and Connie Hedegaard, who heads it all up have a daunting task to meet the goals, I can only repeat what Tony Mowbray said to me when he autographed his log book for me:

Go get ’em!”

 

To be continued:

Shadow Show

Here is Something to enjoy. I found this on Clair Hanbury’s site. She is proactively focusing on a project with Unesco to find best policy and practice on pre-service teacher training on HIV and Aids. Check her out if you are interested to know more.

In the meantime here is a Louis Armstrong version of  What a Wonderful World” from performer Raymond Crowe.

 

.

Letter from India: Following that dream

imageHere is part of a letter from India sent home to family and friends by Kate Wood. it was dated on April 26 2006. Since then Kate has gone on building her original design fashion house.  In the face adversity of  reduced consumer spending. she went against the odds to start her business The Dancing Feather.

Based around the unique of flavor of India, with its emerging high end “India” fashion tastes now highly sought after, her success to date is all to do with her determination to define and get in touch with her chosen market. In this crowded space she has sought a way for people to express themselves with quality distinctive fashion that is also very affordable.

Here is her letter around the time she was getting it all started:

‘Decision making has quite a different flavor here. It is not an orderly process of weighing up and considering; it’s a bombardment of bafflement and sudden clarity of capricious but authoritative intent’….

I saw this in book I’ve just finished reading, which sums up perfectly the way it is here.

Today here I am in Goa. Palolem. Yes, yes I’m aware that Goa is still not the real India,  especially with 1 foreigner to 9 Indians. But my living quarters tell a very different story. It is just off the beach again in the village. My shanti shack’….. with its Spanish green interiors has a pink patterned bedspread and a pillow that reads “Be Happy Always”

India screams affirmations at you wherever you go;  A cement alcove serves for a washroom with two buckets supplied for collecting water. Pigs, chooks, dogs and cows together with a family feel fortuned from a friend who invites me for my favorite ‘real Indian’ food each day for lunch.

On a hired a scooter the other day with a friend I went for a road trip a little north to Agonda- with its 3 kilometer stretch of lush white sand.  I counted just 8 people the whole time we were there. Yes there is space in India!!

Then onto another little piece of paradise where there was a semi fresh water lagoon that kissed the ocean. “5 star tikitaya” (which means the best “real indian” food and the cheapest- less than $1) delivered to us for dinner on the beach. Heaven! Papaya juice on the roadside, chai at shiva’s temple and ride back on sunset. Lovely.

In Goa at every corner, every turn I’m reminded of somewhere….but where, I have no idea? Fleeting moments of the familiar flood my thoughts yet I can’t put a finger on any of it. China, Thailand, Darwin, Byron, Victoria, St Andrews, Etham, my back yard, Everywhere I’ve ever known is here. To be honest it’s freaking me out a little, thinking I might have to move on as it’s creating a saddening feeling of home sickness.

But it brings me back to the passage at the top that I don’t know exactly where to next, monsoons only a few weeks away so until then I’m just kicking back beachside while I still can…..and mentally beginning to prepare for the real adventure…

 

Wrestling data to get to its value.

Short video on some things organizations find when trying to make some sense of their data.