A lot of little girls dream of being fashion designers when they grow up, but how many of us actually take the plunge and launch a clothing line? The goal of this article is to share with you a little of my journey so you can take these lessons forward into your own venture -- or sit back and breathe a sigh of relief that you didn't follow that urge into the apparel business.
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Look Before You Leap
I wasn't one of those girls mentioned above. I kind of stumbled into my business.
My company is RealKidz Inc. We design, manufacture and sell clothing for plus-size and average-size girls. The idea for my company came to me when I had trouble finding well-fitting, fashionable, age-appropriate clothing for my then-5-year-old daughter. I had to believe this was a huge market, so why weren't retailers supplying this need?
Several years later, as I was pursuing my MBA at the University of Michigan, I had the opportunity to do market research and create a business plan for my idea. I found a $3.2 billion market encompassing 5.5 million girls, only 16 percent of whom were being served. In other words, only 880,000 of 5.5 million plus-size girls ages 5 to 12 were able to find clothing in their size. The rest were forced to "size up" to teens' and women's clothing.
I don't know how to sew, and I've never worked in apparel. But the need was so huge, I decided to figure out how to make this happen. I received initial seed money from my family, then contracted with a local designer, a pattern maker and a cut-and-sew manufacturer in Chicago. I sourced the material and had our first samples made. With a few adjustments to the original fit, we were ready to produce our test-market line of clothing.
We quickly discovered that the direction we had chosen for our designs was slightly off the mark. Since kids this age wear mostly play clothes, I assumed that's what we should produce initially. What we found out from talking with customers and potential customers is that they were more interested in finding outfits for more important occasions (school pictures, assemblies, church, special events). Basically, we needed a little more fashionable and trendy wear than we had.
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Using that information, we designed our first official line of clothing. Our initial designer turned out not to be a good fit for RealKidz, so we went looking for someone else. This time, we found -- no pun intended -- the perfect fit.
These details are meant to point out that manufacturing a line of clothing is a challenge. It costs a lot of money, and it's hard to find the help you need (designers, materials, manufacturers). It can be done, however, and all the challenges seem worthwhile when I see our customers' reactions. To have mothers and daughters so happy because they can try on and fit into our pretty clothes produces the ultimate satisfaction.
Marketing Channel: If At First You Don't Succeed...
RealKidz started out marketing its products through the direct-sales-party-plan channel, a la Mary Kay and Pampered Chef. We had some absolutely amazing women who signed up to be RealKidz style consultants and directors of sales and network development. Even a top-notch consultant from the Direct Selling Association helped out. We soon discovered, however, that having a small line really hurt us from a party plan perspective. Party attendees wanted more styles to choose from. The other downside of this model was the length of time involved in getting prospective consultants interested, signed up and selling. The sales cycle was too long for the limited resources we had available.
At the beginning of 2010, we made the difficult decision to change direction and focus on e-commerce. We upgraded theonline store at RealKidz.com to a more robust platform with a vastly simplified checkout. We optimized our site and made our Google Adwords pay-per-click campaign more effective. We hired PublicCity PR to help us build our brand and reach all the moms, aunts and grandmothers out there who need our products. We've had some very positive media coverage locally and are looking to expand that coverage nationally. We launched on the requisite social media sites (Facebook, Twitter, YouTube and LinkedIn). The new site launched in August, and we're seeing the growth we had anticipated.
Making the decision to change the business plan and discontinue our direct-sales operations was one of the hardest choices I have had to make. It would have been much harder, though, to run my company into the ground because I didn't have the resources needed to support that model. Our venture into e-commerce has given us a new chance to succeed, as well as the opportunity to finalize and launch our social network,The RealKidz Family Network. The network provides members with alternatives and suggestions for healthy lifestyles. We wouldn't have been able to turn our resources to that project without the change in direction.
Raising Capital: Show Me the Money
Anyone who has looked for investors to fund her endeavor will identify with everything I am about to share. I have been blessed beyond measure by the people who have invested in RealKidz and in me. I have an unusual business for our Michigan economy, where the emphasis is on technology, life sciences and biotech startups. These are all things that sound sexy to a potential investor and provide hope that they will change the world. Plus-size clothing for girls? Not so much. However, I will be forever grateful to the few enlightened individuals who saw the potential and took the plunge.
Unfortunately, the whole game of raising capital is, by its very nature, difficult. I've dealt mostly with angel investing, not venture capital. But to find the angel who's a perfect (or almost perfect) fit for your business, you have to interview and be interviewed by hundreds of potential investors.
Dozens of organizations exist to connect capital with the people who need it, and it still doesn't get easier. I think it's just the nature of the beast. I've heard investment in a business compared to a marriage. So if the investment is the marriage, the search for investment is a long -- often painful and teary -- dating process.
The Best Job in the World
Along the way, I have been blessed by so many wonderful individuals who have supported me, rooted for me and RealKidz, and helped in ways I never would have expected or believed. I have made dear friends and met so many interesting and smart people. I have had the support of my spouse and kids to follow my dream. I have had the opportunity to travel around the country for business plans, market research, sourcing and design trips. I have played a part in helping countless young girls be happier and more confident because they found clothes that fit. By keeping my business afloat for almost four years, I have succeeded where others have failed.
Despite the ups and downs I have faced along the way, I wouldn't trade the knowledge and experience I've gained -- and I have faith in the future and what it holds for me and RealKidz.
Merrill Guerra is the founder ofRealKidz Inc., which provides clothing for plus-size, above-average and average-size girls. She received the 2009 Pioneering Spirit Award from the National Association of Women Business Owners and was honored as the 2008 MBA Entrepreneur of the Year by the University of Michigan Zell Lurie Institute.