Worried another bubble burst is coming? Here’s some actions to try.
It’s easy to feel overwhelmed of late with crisis after crisis hitting the headlines. Governments around the world having to deal with immediate fires that are pulling focus from long term issues such as climate change. As we band aid each new problem it can feel as if we’re using plasters over gaping wounds, helpless as we look on to the state of own local and global issues. Firstly I want to impress upon you that no one is ever powerless. And having seen first hand numerous other financial and apparel industry specific calamities, I want to assure you now that balance is always restored. Even if it looks different to what it was before. Which is why I wanted to come here to share with you some things I’ve learnt over the years in the hope it can help any of you struggling to weather this particular storm.
Rest and reassess.
This can feel like a luxury at such times, but I can promise you that when people are given time to reflect and rest, creative solutions to business problems are more likely to percolate. It is so tempting when things get tough, especially financially, to keep your foot on the gas or even try and increase productivity. It’s a lie that in times of financial uncertainty increased productivity will lead to increased financial security. I hope it goes without saying that as part of a reassess you need to be taking a long hard look at your financials, but rest before making any decisions, and ask yourself if these decisions make you feel excited. If they don’t, you’ll run out of energy before you see any financial rewards. Opportunities are bountiful even in the darkest of times.
Photo: Unsplash/Colin Watts
Shore up your supply chains with deeper relationships.
Another thing that should go without saying, with the current issues facing supply chains, not just in the apparel sector but across all industries, it is extremely tempting to start slinging the mud at the walls in the hope something sticks but moving your production around. If this is you, you are not alone, I know firsthand of some really big brands doing just that. Moving their products on a whim to gain a little bit of margin or a better delivery date. Two things I can guarantee you; you’re going to pay for it somewhere, and they’re not going to hit that delivery date, certainly not with impacting return rates. I think we all know the saying; if you want fast and cheap its not going to be good etc!
Understanding your suppliers pain points will help make businesses decisions that support your goals. Moving from a ‘just in time’ approach to a more consistent flow of goods, from raw materials to finished products, even for small businesses can generate a more stable revenue stream. This will also take a lot of guesswork out of merch planning, potentially reducing the need for sales periods. Periods of discount can be harmful to a business if it’s come to be expected by the customer, especially if you aren’t a brand used to purchasing directly for sale, which in itself is a disingenuous act unless its used to ensure the financial future of a business. Additionally, larger businesses use sale buys as a way to generate increased profit, discounting full priced items is no value to smaller businesses.
Better relationships with suppliers also has benefits for other services that aren’t directly tied to the financial accounts, which we often overlook but are still important. Data is becoming a huge part of economies within the global north and transfers of knowledge will mean you can adapt quicker. If you are on the look out for new suppliers, look for ones who have the ability to adapt quickly or have more to offer in terms of their supply chain. There are ways in which some can add value to your business by more than just producing products.
Fingers in multiple pies.
Did you know the average millionaire has more than one business? Which means you also need more than one offering or reach. Think about the likes of Rapha with their coffee shops, bike clubs and holidays on top of their product ranges! Needless to say they should all be financially healthy in it’s own dept, I have seen first hand with one part of the business funding another, it never ends well. Ever.
If you’re D2C perhaps its time to think about how a wholesale route can support your businesses plans. And as I mentioned in the previous section, sometimes it’s more than a financial transaction. The data your partners are able to provide can take a large amount of risk out of your buying decisions as well as pushing to you a new customer base. They’re also great for trying out new customer bases without having to spend on marketing. When deciding who to approach it isn’t just about what they can do for you, but also what can you do for them? Creating an agreement always has better business outcomes than simply negotiating a trade contract. Another thing I can tell you for a fact; things always come back round in surprising ways.
Do your pillars stand up to earthquakes.
So this may just relate to the UK at the moment, but fires aren’t just started on the balance sheet! It’s currently looking like we’re about to get a legislation overhaul without debate. While it’s unlikely (hopefully) that we’ll veer too far from the EU directive on this, after changes it last week we need to be able to plan for worst case scenarios. If you have a Tory MP I would start writing emails about this now, and regularly, as you’re more likely to get an inside scoop on what’s likely to come up. And they might drop something in conversation at one of their parties (!) that could benefit you, you just never know. Again, this advice does come from first hand experience.
If you don’t have business pillars, now is the time to get some. Pillars are different to foundations; foundations are the right market conditions and the skillset within your business to meet those market requirements alongside the financials to hit said conditions, also known as MVP (minimal viable product!). The pillars form additional supports when it comes to making business decisions and these can be informed by many things, but as I specialise in sustainability this is what I’m going to focus on. Every business should have 4 support pillars. If you’re a larger business you can have 6, but understand that 2 of those are most likely to be financial commitments as it’s very difficult to take 6 into consideration when making decisions. These should also be communicated throughout your business, so every time a decision is made with those pillars in mind (because realistically how often do people really asses business impact when making some decisions around travel, freight etc?). They can help determine future investment within the business by having other trackable data points outside of the sales report and profit and loss accounts. These pillars are also great to communicate to your customers as when they align, their emotions for the brand grows.
I personally really like the UN’s Sustainability Goals as guides to the pillars. Partly because some are so close in subject you can kill two birds with one stone so to speak (grim I know). And they can be quite narrow in their focus in order for you to drill down and make an actual impact outside of creating more stuff. If you’re writing your sustainability strategy then using the Sustainability Goals can help inform your targets or goals for maximum impact.
Positive adaptations.
The good news is I have actually taken my own advice over the last few months, which is why it could seem like The Good Factory fell off a cliff! We stepped back, assessed what we really want to bring to the world and what we can do with all the factors outside of our control and made some pretty bold decisions. In addition to continuing with our commitment to our Asian suppliers and ensuring an after life of each product we create, we have changed up our nearshore offering to limit supply chain shocks while bringing in new business offerings which includes strategy planning for sustainable sourcing and development, which falls in line with the EU directive around marketing claims (and the UK’s once we know what the powers that be are planning).
There will be even more content coming over the next few months across multiple channels as we work to help businesses shockproof their supply chains and shift towards a more sustainable future where they can create maximum impact and filter through the noise.
