Amanda: I'd say we’re about half and half. So half is online, with our biggest marketing channel actually being Instagram. The other half is in-person locally in Arizona where I’m based.

Ajay: When you say in person, you go and give a demo to the site?

Amanda: The girls actually will hear of me through word of mouth. I’m the only custom suit maker in Tucson right now that’s really playing big on the scene. So a lot of these girls who compete in these competitions have coaches or teams that they’re on, and people on those teams will recommend them to me. And then because the suits we make for the stage are all custom cut and custom fit, they’ll actually schedule appointments with me to come look at the fabrics and look at the crystals and the different design elements that we put on the suits, and do that whole process in person.

Ajay: That’s interesting. So in person, I understand but how do they customize it online on the website?

Amanda: More recently what I’ve done is I offer free what I call design consultations which are just 20 minutes on either Skype or FaceTime sessions with me where we talk about what they want their overall style to be on stage, what color hair do they have. If you’re a redhead, maybe we don’t put you in hot pink, right? And then I also do what we call design proposals, where girls can send me a little bit about themselves. They send me pictures of what they’re thinking about, and I put together three customized design options for them that they can either choose from or tweak.

Then there’s actually a third option which I’m not as involved in, where I have a collection of what we call pre-designed suits on the website, which can give them an idea of which direction they want to go and then they can tweak those, built into the website and just order it. For example, I want this suit but I want it to be blue instead of red.

Ajay: Typically if you are giving 20 minutes of your time for anyone who wants to talk about what they need, how scalable is this? How many hours do you have to spend for each order?

Amanda: I used to do everything myself, and having a full-time day job and now a newborn was not very scalable. So at this point I have one contracted seamstress who helps with all the cutting and sewing when I get overwhelmed, which is pretty much all the time now. I also have one girl that I contract out; we call her a crystal design specialist. What that really means is she helps with the Swarovski crystals that go on the suits because all of those are hand-placed on the suit one by one, which is wildly time consuming.

Now in today’s situation, I’ll have that 20-minute phone call and then probably up to about an hour of communications that happen throughout the process, and then probably another 30 minutes at the end to do the final fit of the suit.

Ajay: Okay, I understand the business model so let’s talk about the questions you have.

Amanda: Okay, perfect. My first one is about finances, which is where I struggle the most with my business because it’s such a passion project for me, that quite honestly I wasn’t even keeping track of my books as well as I should have for the first couple of years. Now I’m getting to the point where we’re growing rapidly. I’m making some major investments in my business to expand and to create what’s called in the fashion world a ready-to-wear line, meaning it’s mass manufactured and ready to wear. It’s not something that’s custom done.

What are your thoughts around financing large capital projects? Because I’ve had an investor approach me would be a great investor for my situation, but I’m really nervous about giving up equity. I’ve thought about the business loan route, I thought about credit cards, and I’m just curious to hear your perspective for a small business that is still in the very beginning stages of growing revenue; which direction is the best way to go?

Ajay: This particular answer can vary from person to person; it’s basically what is your philosophy. I personally, because I also started a small business and I still own several small businesses, I am a big believer in not looking for financing. I never took any financing from outside, which I could have based on my net worth and experience prior to starting my business. I personally don’t believe in taking loans or even the equity investment until my business model is so well defined that I know all I need to do is pump some money and I get certain X amount in return.

So, until I have everything figured out, for example if you had a million dollars or ten million worth of orders and your challenge is how do I fulfill that because I don't have the finances; I need whatever, $2 million for this $10 million order; at that stage if you are looking for financing, I can understand that. At that stage, whether you take a loan or you invest, again depending on what the goals are, you want to do it. If your goal is to grow from $10 million to $100 million, then you definitely want the investor because you won’t have to pay back the loan and interest from the income that you’re making.

But personally, until you are so clear and you can see the path very clearly where you are going, I would not take investment. There are two things that can happen. If you can see the path very clearly, then of course you will give up less equity if you are getting funding. Also, what I have seen from financing, and by the way one experience I had, and I don't even know how old you are or where you were but there was this big dot com boom back in the late ’90.

I was in Silicon Valley where the funding was so easy, you could just walk in and people would be chasing you with a checkbook saying, “How much do you need?” I saw such a massive amount of waste, and I still see the same thing any time I’m looking at funded companies, I just see there’s a lack of discipline unless the path is very clear.

Of course if you get money to fund your product to fill the purchase order, then you don’t have a chance to say let me spend another whatever, $50,000 to get a better logo. Unfortunately, small business owners think it’s really critical but it’s not.

Amanda: That is so helpful.

Ajay: That is my philosophy personally. I only like to talk about getting funding. There was a time when I did take a loan, and it was a very high interest loan but I knew why I was doing it; I had a very specific purpose and I knew when I was going to pay it back which I did in less than one year. So again, this is a personal philosophy and all I will tell you is you have to be very disciplined at this stage. You can’t chase all the shiny objects that are coming because there will be a lot of them around you.

Amanda: That is so helpful and very much brings some clarity to if for me because I’ve heard quite a few investment strategies and I feel like a lot of small business owners think they need a ton of capital in the beginning to grow. I’ve had a little bit of an internal struggle with that, thinking I could probably be a little more scrappy and get by. And putting it in the perspective of once you see where you’re going and you know you can get there, and then get the funds to get there. That makes way more sense.

Ajay: Correct, exactly.

Amanda: That is exactly what I needed to hear, so thank you for that. Another question I have, the fitness swimwear market is not intensely saturated yet. There are definitely some big names and some smaller names, and I'd say I’m kind of in the middle right now and I feel pretty comfortable in that market. Making the jump into the regular swimwear market is wildly saturated. I’ve done a lot of work around creating my avatar and my ideal girl.

She is pretty much the same as my ideal customer in the fitness world, just with a different spin because I’m selling her a different product. But I’m feeling very overwhelmed just because the market is so saturated. I was wondering if you have some mindset guidance around entering such a saturated market, and also any tips or tricks to help me increase my credibility as I step into this new market.

Ajay: As a small business owner, I am very big on you have to define your market and only a market you can dominate. Because if you go after the market where you can do a little bit better than others, or maybe prettier than others, that is always like a losing battle. Very often you will end up fighting those things on pricing and the parts of the business you don’t want to do. You want to first define your market, and small is fine; just define a market and just own it. Then you can grow from there. Once you have a market that you completely own and you are the leader, then you can figure out what else you can do. But you always want to be the lead player, whichever market you are going in.

I’ll give you a good example that I’m sure you’ve heard of; Facebook. They went out to fight MySpace, which was a big company at that time. Zuckerberg started with Harvard, and when he owned Harvard, expanded it to Ivy League. When he owned that, he expanded it to university students only, so you had to have dot edu email to even register. And then at some point when he had all the momentum, he just opened up. Again, I’m not suggesting that you should be building a Facebook; there’s nothing bad, nothing wrong with that.

But because of what I told you, trying to get into a broader swimwear market where now you are competing with hundreds of other players, and unless you can clearly say why you are different, I would not suggest that you get into that business.

Just being a little bit better than someone else, generally speaking will be very difficult for you to even convey that message, why you are better. So I think that’s where my suggestion would be you need to look at the niches. What niche do you want in the swimwear line? And then you have to create a category of your own that you can dominate. If you are not a dominant player, it will be a struggle; I can tell you that.

And given that, if you are right now thinking of expanding into a swimwear line where you have so many people it’s not even funny; you will have a very difficult time breaking through, and especially as a small company. Some big companies can do a lot of pushes through TV and all that, but for a small business it becomes very hard unless you have something that totally stands out which is different.

Amanda: Right. The angle I think I’m going after, which I think your comment just solidified in my mind is like this. The general swimwear market obviously is super saturated and huge. The companies that specifically target the female athletes in the fitness competition world, we just took multi millions and brought it down to a miniscule amount of women. There are only a few companies that target these women.

Most of them are ones that do the fitness competition swimwear like I do, but there are crossover suits; beachwear that’s not stage swimwear and definitely is very different from mine. I’m going for a very high end, luxury sort of branding where most of the other ones are kind of more fun and spunky. So I guess it’s more of a question; considering I’m taking the huge market and focusing very much on a very tiny sliver of that market, that’s the right idea, right?

Ajay: Yes, that’s definitely the right idea.

Amanda: Perfect. And then how about just some general tips, because I very much believe in taking strategies from other markets and applying them to my market because now they’re already refreshed. So what are some tips and strategies that you have for going in and dominating the market?

Ajay: In order to dominate the market, of course you have to start with the customer; why you are creating this for your customer, which you have already figured out at least for your market segment. Then, you have to focus on their particular demands, which means you have to keep on improving based on how the market evolves. From a marketing perspective, you have to understand the customer philosophy, their psychology. And what you need to do is explain to them why you are different and why they need you, which is a very interesting challenge.

If you think about it, you have to convince your customer that they need your product, not your competitor. And the way you do that is of course you are different from your competitor, like you are. And you have to push that and almost explain to people your point of differentiation; why you are different is what they need. Because once they understand they need your product, then all of a sudden you become an expert of this area that you have created of the product. So anyone who agrees with the logic of why they need it, you become the only player for them.

If you look at the large companies, it’s very easy to see. If you look at Apple, it’s going to be different. So whether it’s iPhone that came up and said [inaudible] [00:20:01] company, I’m forgetting that. The way I’m going to be different is I’ll make it so easy for you to use all the features so that you don’t have to have a PhD in programming to use it. And as a result, people like me who think okay, I don't have a PhD so it’s probably the smartphone for me.

So like I said, for your category you build a reason which has to resonate with your ideal customer. Once that happens, you have one the battle because you’ll be the only one. They’ll turn around and say I need a new swimwear for this competition because they are already sold on why they need this swimwear and you’re the only one who can make it available.

Amanda: I’m scribbling down ideas that are jolting through my mind right now and I’m writing them down.

Ajay: Okay, good.

Amanda: Yeah, that is great. Sometimes it just takes someone telling you to really spark that inspiration.

Ajay: Tell me about it. Every time I read a book, I come up with five things that are just common sense but I’m like, why the heck am I not doing this for my business?

Amanda: I have to keep a notebook next to my bed so that I can reach over and write notes as I’m reading books in bed.

Ajay: We have a similarity. I have a notebook next to the bed, and believe it or not, there are times when I will have a dream about some solution, and I will wake up and just write it in the dark.

Amanda: Right, and it’s like crooked and sideways.

Ajay: Correct, because I don’t want to miss out on a good idea that I dreamt about and I woke up.

Amanda: Oh my gosh, I do that all the time. That’s so funny. Speaking of books, this is not on my initial list of questions to ask you, but I would now love to ask is there a small business or mindset book that you have read recently that you would recommend?

Ajay: Okay, so Amanda, a lot of things I told you, you will find here which like I said, these things are always verification. The name of the book is Play Bigger. It’s very interesting. It says how pirates, dreamers, and innovators create and dominate markets. There are a bunch of authors: Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney; I had never heard of any of the authors. But like I said, I was reading an article in Forbes Magazine where they recommended this so I bought it on Amazon. So if you go on Amazon, you will find it: Play Bigger. This is a very interesting book.

Another book if you have not read, I suggest to everyone as a small business owner is by Peter Thiel. It is called Zero to One. You know who Peter Thiel is, right?

Amanda: I do not, actually.

Ajay: He is one of the cofounders of PayPal. And since then, he has created multiple billion-dollar companies; just an amazing guy. He’s on SpaceX, he has a company called Palantir which is supposed to go public. He’s a very young and very amazing guy. His book, Zero to One, I read and it was very good. And the funny thing is that if you read Play Bigger, you will start to see that the theme is very consistent. Again, Peter Thiel, one thing I read in that book that kind of opened my mind – and again as a reminder, is he hates competition. Peter Thiel is like hey, you want to be the monopoly.

Amanda: Right!!

Ajay: Which is a bad word, but if you think about it, there are so many laws against monopoly. He said if you are going to be in a business, you want to be a monopoly. And again, if you extend that to what we talked about, the way you monopolize is you just have to pick a market. It doesn’t have to be the whole world; it could be just a segment of whatever, 10,000 swimmers or 100,000 swimmers. You just want to own the monopoly instead of competing with a bunch of other people.

Amanda: Oh, that is so great and I am definitely going to download both of those before my flight this evening. That is great.

Ajay: That sounds very good.

Amanda: Do we have time for one more question?

Ajay: One more question and then I will just ask you for your information so that if someone wants to contact you, they can contact you.

Amanda: I do ask every single one of my girls, how did you hear about me? 90 percent of girls who find me online are coming in through Instagram. And it makes sense to me because what I do is very visual; Instagram is very visual so it’s a good place for me to be online. Do you have any strategic tips around Instagram specifically that you have seen working for small businesses?

Ajay: You know, most of the companies who have gained success through social media, no matter what platform whether it’s Instagram or Facebook, they have created a big following. So on your Instagram profile, what you want to do is… How many followers do you have right now?

Amanda: On my competition swimmer page, I have 10.2 or 10.3 thousand. And then we just started a new page just for the beachwear, so that’s only got a couple hundred because it’s literally been live for I think six days.

Ajay: One of the things you want to do is see how you can increase that number and how do you engage with people. The big thing is being top of mind of your customers. I have another service business that I own. It’s a transcription business, not for medical or anything; it’s for professors and students and businesses. We get at least 50 percent if not more of all new customers through referral. And we don’t even ask for referral. What happens is because transcription is the kind of thing that when they need it, they come and ask and when we do a good job, so if anyone asks them and says do you know any transcription companies, even if it is a year later, they will remember because it is so hard to get the right company.

Now, in your business, what you want to do is you have to understand what is the driving force behind people that are your followers, and you have to engage them. You build that company, you engage them, you get their feedback on new designs, for example, when you have anything new. Even with the swimwear when you are launching, I would just put it up there and say hey, I’m just getting your feedback; what do you think about this? Where can I sell it? The more you can engage your community, they are the ones who will become your spokesperson.

On social media, that’s the biggest thing: how do you build your company, how do you engage them, and they become your sounding board; they become your advocate. They are the ones who are talking about you. So that’s what I would do. Whatever the number, you have 10,000 is a darn good number but of course it can be increased; I’m sure you’ll agree.

So just focus on improving that, focus on engaging them. And like I said, make them almost like your consultants. It’s a free consulting.

Amanda: Free is good!

Ajay: Yes, free is good. You can just build up on the community. Don’t even worry about, can I do Facebook and all those things. Again, in terms of marketing, I’ve always said you pick a channel and dominate it before you worry about other channels.

Amanda: Actually, I was listening to one of your episodes last night and I heard you make that statement, as I was writing a Facebook ad when I know I need to be on Instagram. And I closed the window. I said no, we’re going to go back to Instagram and focus on that.

Ajay: Wonderful.

Amanda: So I am appreciating that advice and taking it to heart. I started to use them as a sounding board a little bit more lately, but I will definitely after this conversation be putting more effort into that and really trying to up the engagement level.

Ajay: You’ll be surprised how good information will get because these are your ideal customers. So they will give you feedback that’s going to be wonderful. And again, the more they are engaged, the more they become your advocate.

Amanda: Yes, which is exactly what I need.

Ajay: Exactly right.

Amanda: Wonderful. Thank you; I feel very enlightened.

Ajay: Okay, fantastic. Amanda, what I would ask you to do is just let our audience know if they want to reach you, if they want to get to your website, how can they reach you or buy your product?

Amanda: Our website is www.AmandaLouiseSwimwear.com, and Louise is L-O-U-I-S-E. You can follow us on Instagram at Instagram.com\AmandaLousieSwimwear. Same thing for Facebook, and both of those channels also have new accounts for the beachwear line, and that is AmandaLousieBeach. And if you want to reach me, you can hit me an email at AmandaLouiseSwimear@gmail.com.

Ajay: Okay, fantastic. It was great talking to you Amanda, and good luck with your business. It looks like you have a wonderful thing going.

Amanda: Thank you so much. I appreciate being here today and the opportunity to talk with you.

Ajay: And hopefully next time when we connect, this is your day job.

Amanda: Yes, that is absolutely the goal.

Announcer: Thank you for listening to this episode of the Founder’s Corner Podcast. If you enjoyed this episode, be sure to follow and rate us on iTunes, Stitcher and SoundCloud. If you’re listening through one of these programs, visit our main page at www.GMRWebteam.com/thefounderscorner.