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Daniella Doughan
Business and Finance Journalist

Daniella Doughan is a business and finance journalist from Sydney, Australia.

Daniella Doughan
Business and Finance Journalist

Daniella Doughan is a business and finance journalist from Sydney, Australia.

Smarter talks to 2016 Telstra Australian Business of the Year winner bohemian fashion brand Spell & The Gypsy Collective about business growth.

Sometimes pressing ‘pause’ on business growth can have a positive impact long term. Elizabeth Abegg, co-founder of the 2016 Telstra Australian Business of the Year, bohemian fashion brand Spell & The Gypsy Collective, tells us why.

Sisters Elizabeth Abegg and Isabella Pennefather, Spell & The Gypsy Collective, TBWA winners Sisters Elizabeth Abegg and Isabella Pennefather are the founders of Byron Bay-based fashion label Spell & the Gypsy Collective.

What does winning the 2016 Telstra Australian Business of the Year mean to you?

Being able to take that award back to our team and share it with them has been really amazing. Business is so tough at the start, so it’s really great to know that the decisions we made and direction we took in our business weren’t by accident, they were great decisions. But the awards really acknowledge those early years where it is such hard work. They acknowledge everybody, all the finalists.

What were some of your business challenges in the early years?

Starting out in 2009, we had the stereotypical challenges of any business – trying to monetise a wonderful idea, working on our website, and finding time in the day to get hundreds of things done! Then all of a sudden we started to grow and very quickly things changed.

How did you keep up with growth?

That was a huge challenge and there were a few times when we felt like the wheels were about to fall off. We were letting down customers, not in terms of the quality of our garments, but just being unable to ship things out on time. We’d do a sale and all of a sudden we’d get 5000 orders in a day and we’d be shipping those orders for the next month.

Our warehouse got too small. Then, trying to find office and warehouse space in Byron Bay where we’re based was really challenging. We realised things were getting crazy and we needed some higher managerial staff. Trying to recruit people to a small town was difficult. Then, of course, things like infrastructure couldn’t keep up. We were outgrowing our e-commerce platform and POS system and our inventory-keeping software. We didn’t actually keep up with growth; we just kept falling over ourselves.

So the biggest decision we made was to put the brakes on—stopping growth for that year. For 2015, our mantra was “better not bigger.”

So how did you stop growth?

It’s actually quite simple, and that is to stop increasing your buys. So when you’re buying 300 dresses and they sell out, instead of buying 400 next time, you still only buy 300. You can only sell 300.

So you have to cap different areas of the business; wholesale can’t sell more than a set number, online can’t sell more than a set number. That’s what we did all year just to be able to concentrate on catching up with ourselves.

Did that work?

Yes, it did. It allowed us to get a handle on everything and it meant we were able to stay 100 per cent self-funded because we didn’t need to make these huge buys to anticipate growth. Now, we’ve got a really great team, our software is more than robust enough, all of those things are well-oiled and we’re able to take big steps and some risks. We can start buying bigger and allow and encourage growth, which is exciting to be starting again.

My sister Isabella and I were the first staff members, and we’re lucky enough to have about 50 staff now.

How do you manage work/life balance working with your sister?

Isabella works in the design department and I run the rest of the business. We’re not in each other’s faces any more. We used to be, and that was wonderful, we just used to get to the point when we could read each other’s minds and it was kind of creepy! We complement each other in a really great way. Her twin sister is a make-up artist and she’s done all our shoots. My husband is a photographer and does a lot of our shoots as well. It feels like a bit of a family affair.

After we won the Telstra award my dad sat me down and gave me all this business advice! So it feels like a lot of the love and passion for the business has come from family anyway.

You have fiercely loyal fans, with more than 680,000 Instagram followers. How did you build that social media success?

We were very early adopters of Instagram; I think that played a huge part in how strong our following is now. People in the early stages were so excited by Instagram and realised the potential of this amazing app. We’re a very visual brand so we have a lot of content, and because we started off blogging, our business was based on creating original content and sharing it with our followers. So when Instagram came along it felt like it was made just for us – it couldn’t have been more perfect! We didn’t have to adapt our business to fit a new platform, we were creating amazing content every day anyway. And our followers responded well to that.

What is your advice to other aspiring business owners?

All you need is one good product. Go to market with one good product. Get it on a good website and create a good service to your customers. Later, you can expand to different products and different categories, but just start with one.

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