Q/A Ben Thompson from Charlie Middleton
We caught up with Ben Thompson, the man behind Charlie Middleton, based in Bondi.
Where did it all start? Tell us a bit about your journey in business so far.
This journey of mine began back in 2003, when I decided to start a little clothing label. I was still working a full-time job then and had no real plan to speak of, but I wanted to get back to making things.
I put in a lot of work in those early days – often working 80hr weeks to do my regular job and design and produce the garments on the side.
Around 18 months later I quit my regular job and went for it with the label – but to be honest, it was a real struggle. There were more hours in the day to focus on clothing but without a salary coming in, I learnt quickly that self-employment in a creative field was very rarely lucrative or glamorous.
A year or so later I decided I wanted to make a belt, so I signed up for a crafty class on a Saturday morning and learnt a few of the rules of making with leather. I enjoyed the hands-on aspect of it so much that fairly soon the belts had started bringing in more revenue than the clothing.
In 2006 I started making belts specifically for women and they were very different in terms of style, so I needed to brand them differently; with that Charlie Middleton was born. Bags would soon take over from belts as the focus and remain so to this day.
Over the years there have been many struggles, with the biggest being the downturn during and after the global financial crisis. A large part of my revenue came from tourists, which effectively made me an exporter, so when our dollar hit parity with the USD, my turnover went down more than 50% on the previous few years.
While fighting through those lean years was not pleasant at the time, in many ways it forged both my business philosophy and design aesthetic.
The way I survived and returned the business to profit, was to improve my products. I could no longer rely on market conditions to allow me to sell enough stock, so I concentrated on designing and making quality, beautiful products that customers could not walk past.
That is still the focus of the business today, and by sticking to that plan over the years we have developed a very loyal customer base. We estimate that around 60 percent of sales are either from repeat customers or referrals.
Jump forward to now and I have a small but amazing team around me, and we have also recently relocated the workshop to a new premise at 257 Bondi Rd. We went with an open plan fit-out, so customers can now see the making process while they browse, and that has proven to be a great decision so far.
What importance do you place on innovation and disruption in your business? How do you drive innovation? Do you have a process?
“Innovate as a last resort,” is a Charles Eames quote I am very fond of. True innovation in design is often extremely time consuming and therefore expensive, so I try to avoid it wherever possible. Having said that, we do try to be innovative in our use of existing technologies, tools, and methods. A big part of our business is trying to overcome obstacles and solving problems whether that’s in production, sales, or logistics.
We are constantly striving for “best practice” so whenever we have an opportunity to improve something without increasing costs too much, I always make the changes needed to achieve that better outcome.
What are the big lessons that you’ve learnt so far?
In terms of my business as an individual with no financial backing, the biggest lesson was and still is, cash flow is king. First and foremost, bringing in enough to survive and managing during quiet times so as not to hamper the progression of the business.
Also, make informed decisions and learn from your mistakes. You are going to make mistakes, but you should strive to make the most informed decisions possible to limit the bad ones. Sometimes I look at a pile of leather on a shelf that cost me about $10K five years ago and I’ve never used any of it. I don’t beat myself up about it though, because in matters of taste you can’t be right all the time. It also taught me a valuable lesson that has no doubt saved me from making many similar mistakes.
What technology do you use day-to-day in the business?
Nothing really ground breaking, but I like Apple products, so I use and iPhone and a MacBook pro, along with iPads for point of sale duties.
Rating a bigger mention is Xero accounting software; it has literally changed my life. Once set up properly I find it so simple that my accountant now only charges me for around two hours work before each BAS. I find myself reconciling my accounts as avoidance behaviour, as it feels like I am being so productive while not doing other important tasks. (No, I am not paid to endorse Xero).
How do you recruit? What do you look for?
I don’t do much recruiting, but I always want to hire people that are strong in my areas of weakness, and ideally smarter than I am.
Do you have a work life balance?
I am a terrible example of this, as I only have around 20 days off each year. Despite working most days, I am often not that productive, so I feel it would be better to have a day off and work more efficiently for six days per week, but so far, I haven’t managed that.
What’s next? Where do you see yourself and the business heading in the next few years?
Just continuing to build and improve on our existing base, as well as some planned expansion in both our direct to customer sales channels, and wholesale business.
Any advice to those starting out in business?
Never assume! The single biggest mistake I see when businesses are starting out and doing the sums on costs and projected turnover, is that the method used to estimate revenue is “surely we will be able to bring in “X” amount per week”.
The fact that this most important question is often answered with a guess is criminal. We’ve all seen that café or restaurant that spent a bunch fitting out their new location and then are closed within the first year. I drive past another new one all too often, and I can’t help but feel “Those poor bastards… What were they thinking!”.
Starting a small business that’s in a field outside your area of expertise is possibly the most difficult project you will ever attempt, so if you are investing your own money, your plan needs to be both meticulous, and brutally realistic.
Check out Charlie Middleton here.