- Search: Eloise Grey ethical clothing

Anyone watching Dragons Den will realize just how hard it is to succeed in the business world. Even if you have a gem of an idea that is only half the battle – the real challenge is in starting and running the business itself.

There are plenty of good businesses that go to the wall because either the proprietor over-stretched themselves financially or they failed to truly understand their market.

I can remember Gordon Ramsay telling a budding restaurateur that he was doomed to failure even though the food was exquisite – the reason being that the local people weren’t going to pay fancy prices when what they wanted was more simple fare. Of course he said this with a few choice expletives to ram the point home!

So what are the do’s and don’ts of setting up your own business? Eloise Grey set up her own ethical clothing company back in October 2007 and she has learnt some valuable lessons along the way.

“The start up capital I used was my own – I had come into a bit of money and thought here was my chance to fulfill my ambition to design clothes. I was lucky I didn’t have to borrow heavily”

She adds: “I enrolled on a Starting a Fashion Business course at the Portobello Business Centre – only ₤100 – it was money well spent. My business mentor there I am still able to go and visit when I need advice.”

In addition to enrolling on the course, Eloise surveyed the market and established that while there was a lot of competition at the bottom end of the ethical clothing market (T-shirts etc) , there was not much at the top end of the market.

So that is where she pitched her business making fine quality tweed coats using only organic materials and no use of dyes or chemicals harmful to the environment. There is also no use of sweat shops a fair wage is paid to skilled weavers who provide the raw materials from which she designs.

One of the few mistakes Eloise made when she set up was that she over-stocked on fabrics. “I tied up too much capital in stock to begin with so I am more careful now. What I do now is stage studio events with prototype designs and establish what demand is like from there. I increase the stock of fabric when the orders come in – not before!”

The company, (called Eloise Grey incidentally) does not have a shop which is both an advantage and a disadvantage at the same time. There is no expensive overheads in renting a prime high street location but at the same time it is hard to increase brand awareness.

“I think eventually I would like to get a shop but initially it made much more sense to go down the e-commerce route,” Eloise explains.

This of course meant setting up a website and making sure it looked the part bearing in mind that the target market were fashion-conscious people who didn’t mind paying extra for quality and ethically produced goods.

“Given that this is the fashion industry I decided this was one area I really did want to use professionals so I hired a website designer, fashion photographer and of course a model. The costs were in budget and I am pleased with how the website looks. The idea is for people to see what we can produce and then order and pay online when they see the design that suits them best.”

Eloise kept costs in check by producing all the garments herself from her own designs – of course if the business continues to grow (she won an international design award this year) then more staff will be hired to handle the workload. “I was fortunate in that I wasn’t paying extra staff – it was only me that was putting in the extra hours!”

One false economy however was her initial decision to do all her yearly tax returns herself. "I am quite business minded and am well organized when it comes to administration but to be honest I think using an accountant to handle your yearly tax bill makes very good sense.

"It is not expensive and I can rest assured that this way at least I can get my tax bill down to the absolute minimum as a result of taking advice from an expert!”

Small business checklist

• Establish what you will need for start up capital.
• Set a realistic budget for set up and promotion.
• Research your market thoroughly.
• Don’t hire expensive premises unless you really need them. Most successful businesses began in a living room!
• If there are relevant courses available locally then enroll. In addition to what you gain from the course, you could make some great contacts for the future.
• Don’t try and do everything yourself if you haven’t got the relevant skills – i.e web design, promotions marketing etc. If selling isn’t your think, get someone in to do it for you.
• Hire an accountant to take care of your annual accounts – not expensive and makes life a lot easier.
• Keep track of invoices – be polite but fair with clients.