You didn’t think an ad agency could run a t-shirt company.
But, as a veteran of the communications industry, I’m now the part-owner of Been There Done That, a B2B supplier of t-shirts with eye-catching designs. Until we took over, Been There Done That was running at a loss. In 3 months, it’s turning over a healthy profit.
We handle the design, manufacture the t-shirts and then deliver them to our clients: Boutique retailers with nationwide reach.
Been There Done That has broadened my education. It’s forced me to understand the value chain of a good company. The business is as far removed from the communications landscape as you can get – and yet it’s not.
To transform the business, we’ve kept it simple, cut the fat and employed elementary business practices that should be reinforced for every entrepreneur.
Here’s what I’ve learnt.
Overheads throttle you. Before we took over, Been There Done That was paying through the roof for salaries, rented space, parking and non-essential amenities.
We cut non-essential staff and dropped the rent by moving to the Inner City Ideas Cartel in the Cape Town CBD. The space looks good to clients, but it’s also cost-effective, and bundles all your amenities together in one attractive package.
Concentrate on what you’re good at
It’s tempting to try and do everything yourself, but that makes you lose focus and slow down. Plus, we’re only really good at one or two things. Stick to them.
Running Been There Done That, I knew I’d be wasting my time if I tried to do everything. We plugged in talent from Area 213 (my advertising agency) and our trusted partners. New talent filled the gaps.
Keep it simple
Our dream is to one day launch Been There Done That as a brand. But we realised very quickly that the company was fulfilling a niche as a B2B entity. As a B2C brand, it was going to struggle.
So we focused on the B2B business, growing it as best we can, and shelved the B2C dream until we knew we could dedicate the resources to make a success of it. The upshot? Diversifying a business too quickly can kill it.
Build up relationships
I realised right away that the suppliers and the clients hadn’t been serviced properly, and a lot of them were dropping us because our designs got stale.
I corrected that by simply picking up the phone and rebuilding a rapport with them. I brought a new designer on board, and made sure that we fed a steady stream of new designs weekly to our retailers.
Good people are crucial in any business
Get the right people on board, and give them a key stake in the business.
With Been There Done That, our designer boasts extensive experience. We can’t afford to pay him a salary he deserves, so we’ve given him equity in the company instead.
Incentivising people properly is crucial in getting the best out of them. Find a way to make it work.
Sort out the supply chain
No matter what industry you’re in, speed is everything. When we took charge, t-shirts were taking 4 weeks to be produced. One client told us he would increase the quantities he ordered tenfold if we could deliver in 5 days. We now deliver in 5 days.
Get financial terms right
Sometimes, you need to the confidence to raise your price. Been There Done That was losing massive amounts of margin because the price of t-shirts hadn’t gone up in years – all because no one had the confidence to raise it.
Worse, the company was being held to ransom by unreasonable financial demands and being squeezed by both the clients and the suppliers. All the risk was sitting with us. Payment to suppliers was made in cash and clients had us on 30 days plus. I negotiated better credit terms with our suppliers, rose our quantities, secured discounts and raised our price.
Related: Never Go Out Of Style
Do your market research
One of the reasons I had the confidence to hike up the price was because market research demonstrated that we were far cheaper than the competition. Even with our price increase we are extremely competitive.
Do your research properly and you’ll secure yourself a proper bargaining position.
Grow slowly but methodically
Down the line, the dream is to launch the brand as an online retailer for high-end t-shirts with eye-catching designs. But we’re not there yet, and it’d be a mistake to try and scale it too quickly. We’ve been focusing on sorting out all the operational stuff first – and that’s key.