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In our thirteenth series Linda Pearson talks to Niav Riley
founder of Niav Riley Headwear, about her business’
crux at present.
| VITAL STATISTICS |
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| Niav Riley founder of Niav Riley Headwear |
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Business Name:
Niav Riley Headwear
Year of Set Up: 2003
Founders: Niav Riley
Location: Athy
Business Type:
Millinery |
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Niav Riley makes one-off pieces of headwear such as hats and headpieces
for clients to match specific outfits for a wedding or the races. The
company manufactures headwear, supplying five boutiques nationwide.
Niav Riley Headwear manufactures about 70 pieces for boutiques throughout
the year. These pieces are all handmade. Business is good in relation
to cashflow and promotion of the label but is not high in profit, although
it allows for bulk buying of materials. Founder Niav Riley visits each
store and customises her range to suit the garments and accessories that
they have ordered for their shop each season. Some of the shops purchase
extra hatboxes which she buys from the United States.
Background
Niav Riley had always wanted to have her own creative freedom in the
workplace to use her unique training and experience. Having graduated
with a degree in Fashion Design form NCAD in 1995, she worked in the fashion
industry both in Ireland and Australia. On her return to Ireland in 2001,
she worked as a Graphic Designer for three years in Dublin, and was offered
a redundancy package in 2003 which she took as an opportunity to start
her own business.
In 2001 when Riley was getting married she designed her own wedding dress
but could not find a headpiece to complement the unique design of the
dress. She decided to make one, and from then on developed an interest
in designing headwear. Riley did a few courses in millinery in the UK
and found that many friends were asking her to make pieces for them to
wear to weddings. It was at this point the milliner realised there was
a niche in the market.
Starting her own business would allow flexibility to work from home and
look after family. The company has always been home-based. From 2003 to
2005 Riley worked every hour in the day. She was supplying 14 shops and
private clients. In 2005 after the milliner had her first child she cut
back to working three days a week. The problem then was she was trying
to do the same amount of work in those three days.
Current Status
The Niav Riley Brand is becoming more established within fashion circles
due to sales through boutiques, high profile racing events, appearances
on Ireland AM, and RTE Nationwide. The milliner feels it is time to expand
on the strength of what has already established but she is very limited
time wise. Riley works three days a week, and does everything herself.
She finds manufacturing to supply shops is a drain on her time, but it
is worthwhile. She believes she needs to look at some new options so she
can continue to work without being stressed all the time.
Financing
Designing pieces for private clients is very satisfying according to
Riley but is not as profitable as it should be. On many occasions materials
have to be ordered for each client. All materials come from either the
UK or the US. The businesswoman realises that her prices should be higher
but there also seems to be a ceiling on the amount that people are prepared
to pay.
Even though Riley spent seven months researching and writing a business
plan, she found it difficult to clearly work out how to price the product.
There are only a few other Irish milliners and most of the products sold
in this country are imports from the UK, so she uses these products as
a loose base for pricing. She is also finding it hard to cover costs with
printing, photography, promotion shows etc.
The milliner feels she should be focusing on what she is best at and
is considering outsourcing the making to a homeworker, and do the finishing
herself. She hopes this would allow her to visit and supply more shops,
leading to better turnover.
Future Plans
The milliner would like to ‘work-smarter’ and use time in a
more productive way. The entrepreneur feels she really needs to turn the
business around to a profit making one, and not one that is just ticking
over financially.
Crux Of The Matter
Niav Riley is currently moving studio to her new home and feels the time
is right to make a decision about how to move forward.
QUESTIONS FROM NIAV RILEY HEADWEAR TO THE PANEL
- How do I go about finding a good business partner or backer to share
the responsibility of managing the business?
- If I was to approach large designer stores and freelance for them,
how do I present this idea to them, charge for my products, and protect
my designs?
- How do I find out what is the best price for my products in order
to ensure I make a profit and cover all costs?
Kevin Sheehan, Partner, SME Services, Deloitte, heads up the panel
of experts below who give their advice on how Niav Riely Headwear can
grow her business.
| OUTSOURCING MANUFACTURING |
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| Kevin Sheehan, Partner, SME Services, Deloitte. |
It sounds like Niav Riley is in a bit of a bind. Normally I would
recommend that Niav expands the business by taking on an employee,
perhaps an apprentice from the NCAD, however, because the market is
so small that is likely to end up in that person learning the tricks
of the trade, developing key contacts and then leaving to go solo.
Outsourcing
The only way I can see this business growing is through outsourcing
the manufacturing either of the designed products in totality or
just the base structure manufacturing. This will leave the artistic
design and sourcing, which is where the value added component of
the business is, to Niav. In this way output volume can increase.
Direct To Customer
For this business to succeed and become a solid income earner without
all the stress, the volume or throughput must increase. The product
price has a limit and probably already commands a premium price.
Another option is to cut out the retailer margin (In Ireland). Niav
could go it alone or perhaps two or three like minded milliners
would be interested in setting up a retail outlet where costs are
shared and an agreed margin and pricing structure put in place which
is fair to all. A retail outlet can greatly increase brand awareness
and would complement Niav’s website www.niavriley.com
Kevin Sheehan, Partner, SME Services, Deloitte.
Head of Panel for Crux of The Matter.
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| Mary Ryan, Assistant Director, WESTBIC |
In planning for a productive approach to her business the promoter
needs to undertake a cost-benefit analysis of returns from her niche
markets. She may yield higher dividends if she reduces her efforts
for private client dealings and concentrates on developing the boutique
circles and large designer stores.
Managing The Business
The key to developing the business is not necessarily in sourcing
a business partner or backer but on outsourcing the initial headpiece
assembly tasks, or talking to a design student who could become
a fundamental part of expanding the business. This will allow the
promoter to concentrate on dealing with boutiques and designer stores
in addition to designing and completing each piece.
Strategic Growth
In its fourth year of business, Niav Riley Headwear should have
a sizable repertoire of designs, retail outlets and publicity coverage
to compile a portfolio for the large designer stores. Niav should
also research the highly lucrative Irish weddings industry and consider
establishing a partnership with a reputable bridal designer and/or
retail outlet. While it is difficult to protect designs in the fashion
business, the correct approach is to concentrate on developing her
label through increased exposure in reputable stores and charge
a price based on cost recovery plus profit margin.
Mary Ryan, Assistant Director, WESTBIC
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| Mark Fielding, Chief Executive, ISME |
Niav may be an excellently talented milliner but when it comes to
the business side of things she seems to be talking through her hat.
Costing is a basic requirement in making anything, you must know what
it costs to get your product to market, including a cost/value on
your own time and just as importantly your own creative genius embodied
in each piece of headwear.
Pricing
Get an accountant to cost from the ground up, materials, design
and production time, including outsourcing, if any and accessories
and consumables such as hat boxes etc. Make sure you include overheads
such as light and heat, telephone and other studio costs based on
the number of items you make in a period. This will give a basic
cost of each creation. The next exercise is to price comparable
hats and deduct the retailers’ margin, which will give a ball
park comparator. Both of these exercises will give a guide to a
sales price.
Go For It
The other way is to be brave and ‘go for it’ and charge
a price that reflects the genius that has gone into creating the
hat, way and above the costings worked out above. Niav must value
her work and realise that she is not making a hat, she is creating
art and should be rewarded accordingly.
Mark Fielding, Chief Executive, ISME
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| Ann Murtagh, Business Strategist, AIB |
Before approaching large designer stores, Niav needs to thoroughly
understand its proposition and how this fits with the market it is
seeking to serve. It is critical that Niav fully researches this market,
understands what its competitive advantage is and is able to articulate
that in a meaningful way to the audiences they are seeking to do business
with.
Price
The price Niav charges will be determined by a number of factors.
For example, what is the business goal, is it to achieve market
share, recover investment costs? Where does Niav want the brand
to be positioned? What is the added value Niavs’ products offer
over competitors? How much are customers willing to pay to get the
benefits of Niav’s products? What is the breakeven price Niav
must achieve to keep in business, repay any debt and generate enough
funds to earn a living?
Protection
Designs may be registered in respect of an array of items, including
clothing. To be eligible for registration, a design must be new
or original and not be published previous to the application. A
registered design will give Niav the monopoly rights over the outward
appearance of an article initially for a period of five years which
can be renewed for a further five to fifteen years.
Ann Murtagh, Business Strategist, AIB
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| Brian O’Kane, Managing Director, OAKTREE
Press |
Niav Riley faces the classic entrepreneur’s crux: how to move
from one person doing everything to a ‘proper’ business.
Her first step is to understand what each of her customer groups really
value, is it hats handmade by Niav herself, or just handmade, or the
brand, regardless of who or where the hats are made.
Customer Focus
It’s likely that different customer groups will have different
answers and will be willing to pay different prices for what they
want to buy. Niav must then decide which group or groups she wants
to focus on. She has already discovered that, while private buyers
love her work, they are not prepared to pay as much as Niav thinks
it’s worth. So she needs either to reduce her prices, which
means reducing costs, or increasing the perceived value of her hats
so her customers will be willing to pay more.
Expanding
Niav is not ready yet for the large designer stores. It’s also
unlikely that she will be offered financial backing from a new partner
just now. She needs to prove that she can handle the transition
to greater manufacturing scale first. It’s a chicken and egg
situation. She needs support to help her to grow her business, and
she can’t get it until she proves that she can do it without
the help!
Brian O’Kane, Managing Director, OAKTREE Press
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