In my guide to starting a business in Bali, all of the people I talked to had been successful in their businesses. Some of them did have problems along the way, but all of them eventually “made it” and now have comfortable lives in Bali. While I don’t think people reading the stories would get the impression that it is all plain sailing running a business in Bali, I didn’t have the chance to interview someone whose business was not a success, or even a complete failure.
I had an email from Leanne who replied to one of my email newsletters telling me about the problems she was having with her business. I think it takes a huge amount of ‘guts’ to open up to people and discuss their problems, so others might be able to benefit.
Actually I think Leanne’s idea for her business is a good one and probably with some investment capital and good people, I still think it has potential. It does highlight the point I always like to make to aspiring entrepreneurs, the idea is just one thing and perhaps the easiest part in starting a business, success or failure is all in the execution.
Anyway I congratulate Leanne on trying, she is still in the 1 per cent of people who don’t just dream about something, but actually give it a go.
Anyway, here is the interview:
When did you first come to Bali and what made you interested in Bali?
I first started traveling to Bali in 1993 and would come with friends or by myself. I came here as I loved the culture and back then it was really cheap and I could afford to stay in the best places for 2 weeks and have total relax from from busy life back in Australia.
What gave you the idea to start your business and what is it that you are actually doing?
I moved here in June of 2008 and purchased a tour company with another Australian friend. Some friends became pregnant and also my business partner and I started to make a few sample products of Maternity Clothes after they complained there was nothing available in Bali for western women. The response was positive so I created a small collection of around 12 pieces to start. Only t-shirts and tank tops to start, with plans to soon grow.
What kind of market research did you do before starting your business? Did you create a business plan?
When I would be sitting having a coffee around Bali If I saw a pregnant western women I would approach them and start to ask questions. If they were living in Bali I would ask where they got their maternity clothes from, and what kind of designs they were interested in. It took over 12 months to source the info and to design the samples that would become my brand: Baby Belly Indo.
I had a budget on what I wanted to spend on manufacturing and started small. I had a small stall at the Seminyak weekend markets. Although the sales were small, I got a lot of response from people from Jakarta and Australians. I also started to sell on Ebay and most customers were from Australia, Italy and Singapore and expats living and working around Bali and Jakarta.
How did you go about setting up your company?
I had a girl working for me at my home and asked if she would like to start helping with marketing. Eventually I asked her if she would go on the business as the Indonesian Signature. She agreed and all went well. She also became pregnant and became the model of Baby Belly Indo Brand. My tour company was done through a notaris so I trusted him to do the documents for the CV. I had already sold my share in the tour company, so this was put towards the start up costs of the CV and to open a small shop in Kerobokan.
You said you wished you had better advice before starting your business, what kind of advice did you get when you were starting out and who did you get it from? Did you get any professional or legal advice?
The notaris in Seminyak told me what I needed to do, and I trusted him that he knew what he was talking about. I needed two signatures on the CV, so her husband who was also working for me doing the photos and marketing, became the second signature. I had resignation letters done by both of them as I thought this would protect me if they decided to pull out, or become a problem. I was told I would just need to keep the original resignation letter, have them sign it and keep it safe and hand in at the time I needed.
Little did I know that they could blackmail you to get their names off the contract. I now know I should have also had a lawyer to look over the papers to better protect me and the business, but at the time I totally trusted the 2 signatures on the account.
It sounds like you had problems with your business partner. How did you first know your partner? What skills did they bring to the business? What problems did you have with the relationship?
The girl was to run the office and help set up the shop. She was attending university in Denpasar part time doing an economics degree. She also did the marketing online and took the photos of the products. Her husband was a photographer and graphic designer. He did all product shots and editing. He also was to help with marketing my brand to the larger chain stores in Bali – Matahari for example. Apparently they had a meeting with Mataharri, I did not attend. Big Mistake.
I was told Matahari needed 24 pieces per size, per color, to put into the store and see how sales went over a 3 month period. So I decided on 6-8 designs to trial and started production to cover Matahari and also the new shop in Kerobokan. My staff had told me it was all good and I had to produce the product, then meet with Matahari to show that I could supply the product. US$30,000 later, production finished. Someone from Matahari was meant to come to the shop to view the designs and stock that I wanted in their Kuta store. It was all going well. Everything was set and finished and then my staff informed me that Matahari had pulled out. ( I later after closing the shop in Kerobokan went to Matahari and spoke to a representative there and she ask the man in charge of stock control and no one had heard of my brand Baby Belly Indo, nor had they ever remembered having a meeting with my staff. I had photos of both and showed the staff and no-one could recall the meeting. So one big mistake was not attending these meetings.
So I tried Sogo but they didn’t have room for the stock. So I had so much stock and didn’t know what to do with it. Then all the problems started with my staff and being robbed. The money was running out. I tried the Australian market but the response from stores was that it was cheaper to buy from China. I only used top quality fabric and it was important for me to produce all in Bali.
I was advised to sack all my staff as they had a feeling all the problems I had with being robbed and I also had problems with immigration had to do with them.
There are some people who are successful with their business in Bali and others who have lost everything, what do you think are some of the factors that help to become successful?
Always have a lawyer to look over and advise on all contracts done by a notaris. Never have staff on the contract rather if you need an Indonesian on the business have someone that has nothing to do with the business and not related or married. Also have a separate agreement that they sign at the lawyers, that they cannot blackmail you for money.
Were you able to find retail outlets in Australia who would buy your product?
I have not really done a lot in Australia but when I get a request for catalog and wholesale pricing they all say too expensive. I have since looked into producing in China and this is a much cheaper option for me. I still have around $15,000US dollars in stock sitting at my house that I am selling very slowly. Actually, I only added 70% on for wholesale but this still proved too expensive for the Australian market. I have since closed the online store as I am leaving Bali and moving back to Australia on the 4th of May. The stock will remain here in Bali and I will try to sell at a big discount to stores in WA.
I have also donated to many families around Bali. If I see someone pregnant I ask if they want some maternity clothes and I just give them away, and I have also donated products to Yayasan Bali Street Kids.
Are you still hoping to continue your business even if you return to Australia?
Well I will try, I will have to get a part time job and on days off go around to markets. I have also taken a few other designs on as their agent for WA, in the hope of earning some money. If I find stores in Australia to retail my product I will have to produce a much cheaper product and may have to buy from China, but for now I just want to get rid of the stock I already have on hand. I have a good quality product, and it would be a shame to have to source my designs in China. But to survive I will do what I have to do as I still believe it will work.
What advice would you give to someone thinking of starting their own clothing manufacturing business in Bali?
Before producing anything look at the cost and source form other countries as Bali/Indonesia is getting way to expensive and I think for my designs I can produce them in Australia for around the same cost.
If someone reading this who would like to get involved in your business, how might they be able to help and how best might they be able to get in contact with you?
If anyone has a store and would like to stock some items on consignment then I am happy to provide the stock. I have stock in two stores in Seminyak already and some of my designs are Maxi so you don’t have to be pregnant. I even wear some of the clothes.
My website is still on the web at www.babybellyindo.com or contact via email at firstname.lastname@example.org I am also selling the website, brand and stock, if anyone is interested. I still have to come back and forth from Australia to Bali when I have money to pack up the rest of my stuff and ship to Australia as I have my house until October this year.
Thanks to Leanne for sharing her story. What do you think were the problems of her business? Higher than expected costs, staff, marketing? Leave your thoughts in the comments.