Key facts and what we know now……
In November 2014 the Centre for Fashion Enterprise hosted a one day symposium called Fashion Talks London discussing the future of business support with pan European incubators. Drawing on her experience as Director of the Centre for Fashion Enterprise working with emerging fashion designers in London, Wendy Malem, who is also a leading co-investigator with Creativeworks London’s Place Work Knowledge research strand, sums up the event’s proceedings whilst identifying some common issues that designers across Europe are experiencing:
It is vital not to under-estimate how little a designer knows about manufacturing and factories. The Designer, Innovation Support Centre (DISC) in London works with designers to understand making, quality and manufacturing and help those who need to source manufacturing and to find suppliers from all over the world, including Europe and in the UK. Although it is widely acknowledged that creativity and sales drive these businesses, designers need help with understanding how they can produce the garments they have sold, not only the production processes but also organising themselves internally to make sure they are maximizing their profitability.
To develop sufficient sales to sustain a business, European designers need to internationalise fast to establish global brand recognition and secure sales in international markets, often before they have sufficient brand equity to be able to secure stockists in home markets. As well as developing and delivering differentiated products, designers require international market knowledge and ability to access global sourcing intelligence and routes to markets. Internationalisation is a key challenge to a European fashion SME.
A combination of lack of experience and a lack of money means that designers are “putting their heads in the sand” and not facing up to the need to register their trademarks, domain names and putting a legal partnership in place in order to protect their IP and business assets in home and international markets. Olwsang are the leading legal firm for global fashion sector and are working with Centre for Fashion Enterprise in helping designers to register their trademarks in global markets and also help designers to understand the advantages in understanding the key legal aspects of business. A classic issue is a designer with a good friend in the business but no contract in place to protect any aspect of the businesses or entering new markets without having secured their trademark.
Understanding business and creativity as well as an ability to manage cash flow in their business is to enable the designer to be able to make the necessary judgements and decisions. This is a key role that CFE plays in the fashion designer sector as well as supporting their digital needs which has become a growing area for the development of expertise. Understanding how to be professional and how to be a business is a vital early step for a fashion designer. Recognising the need for business planning, whether to do it themselves to get someone in to do it, allows the designer to understand how to plan ahead, develop access to new markets and appreciate how their creativity can add value to their business.
All these small fashion businesses must focus on sales. Early internationalisation of a small business is essential in fashion and accessing and developing markets is costly and problematic, needing guidance to navigate. However much press coverage a designer gets or awards they gather – it is the sales that drive business. Young designers often do catwalk shows yet they don’t actually know how to price up their work because they have never had any sales. This is not good for businesses! Driving international sales is expensive for small fashion businesses and a deeper market penetration across the EU member states could be more cost effective through cross border co-operation which is a key objective for Centre for Fashion Enterprise and the fashion association attendees at Fashion Talks London in November 2014.
Style and timing of business support:
When designers apply to CFE, DISC and Fashion Scout they have an extensive application form which serves as a checklist of status of the business and intensions for the future. All support has to be at these right times to help the business when they need it and the style and format of delivery needs to be targeted, credible and at the right time if it is going to resonate and be impactful.
There is no doubt that digital is vital to business and that it means different things to different designer businesses. Some have engaged with it for business planning tools and others for e-commerce or interaction with peers & customers. Instagram & Facebook are seen as tools to some designers to sell the clothes, and twitter to connect & share comment. Some designers have an immense focus on social networking, with millions of followers worldwide, and often use as leverage to drive sales to physical stores or to drive on-line e-commerce sales. There were some designers who are wary of the internet and see it as “replacing subculture, by making everything so accessible that there is no secret way now for people to build their own community of followers anymore”. Listening to the designers talk, when they were asked about digital, the reaction was that generally “that digital is social media like Instagram and Twitter” when actually it’s so much wider and you can see that there is an enormous gap between their knowledge of what is available and what could be done to add value to business . We still have a huge amount of work to do collaboratively.
There are many organisations doing amazing things for small fashion businesses on a small scale in their own domains across Europe. Imagine how the small fashion businesses would gain so much more if these organisations were connected in some meaningful way.
Access to finance:
Most small businesses are under capitalised. It can take 5 years for a small fashion designer business to establish itself. It will need funding to scale up. Access to finance is an issue that the European Commission has recognised and is now trying to tackle.
The EC have done tonnes of studies and they see now that there is a real need for a guarantee fund that will help this industry. It will be launching in 2016. With private sector partners, EC are actually planning a guarantee fund which for the first time will be targeting specific sectors and it will only be targeting the creative industry including fashion and design. The EC know the banks often don’t understand the needs of the creative industries including fashion, as they speak a different language to that of the fashion industries. So what will introduce then as some kind of learning programme for the banks that get involved that actually tells them what are the specifies of each sub sector and makes sure that the fund hits the right spot. Specialists in the sub-sectors must be targeted to advise so that impact and growth can be assured.