Swimwear firm Way Funky Company founder Duncan McLean says he didn’t mean to be an entrepreneur, but that hasn’t stopped plans to grow a large international business. By AMANDA GOME.
By Amanda Gome
Swimwear firm Way Funky Company founder Duncan McLean says he didn’t mean to be an entrepreneur, but that hasn’t stopped plans to grow a large international business.
Duncan McLean had had offers to sell his Melbourne-based swimwear business Way Funky Company.
But the 26-year-old, who says he fell into business by accident, now plans to grow a large international company. Revenue is nearly $1 million, he has four employees, he has begun exporting and supplies 60 retail stores, swimming schools and distributors.
He tells Amanda Gome how he built the company and what’s next.
Duncan is available to answer your questions. Email [email protected] before 28 March.
Amanda Gome: Why did you start your own business?
Duncan McLean: I was a swimmer competing at a national level and I couldn’t find bright, colourful swimwear. I designed the bathers, went to Spotlight to buy the fabric and my mum made them at her sewing machine and then people began to ask for them. So I went to retailers, showed them the products, set up a website and contacted the media about the swimwear.
I never woke up and thought ‘I am going to run a business’.
Did you have any business skills?
I had finished an honours degree in economics at 21, and started the business while I was at the Reserve Bank working as an analyst.
It was very hard working on weekends and in my spare time, but I enjoyed it.
What money funded the business?
I used my savings. Then I got a big break when I won a Nescafe business competition and got some cash from that ($25,000). That money meant I could leave the Reserve Bank job and go full time.
When did you move into an office?
Only last year. As soon as you put in fixed costs like rent you have to make that much more money. So I delayed it as long as possible. We now have an office and warehouse in Collingwood (Melbourne).
What was the big break?
I did a big promotion with P&O Cruises. I just contacted the marketing manager and said I have a fun product, and we did a radio campaign and had an event at Crown Casino. Myer was there and they picked up the product and put it into 20 stores and it did really well. Then they decided the positioning of the brand was a better fit with David Jones and it’s still in DJs today.
When you were looking for a manufacturer in China how did you decide the best one?
I got a number of options and then visited the factories. I wanted a factory that produced high quality products and was good with English and I found one near the Hong Kong border.
How did you work out your pricing?
I had to be competitive with the market. I know you learn at school that you base your prices on your costings, but I thought the market was too competitive to do that. So I looked at what other people were charging and we sold the swimwear for $50 each.
After a year and a half I could do a cost analysis when I knew the costs of the business.
When did you start to export?
Two years ago we went to New Zealand. We decided to start there because of the language and it has similar seasons, similar culture. The northern hemisphere is much harder. We wanted to test the waters. We picked up good accounts and it’s now 10% of our sales.
The best marketing you did?
We got a group of guys to do aerobics in our trunks in the streets of Melbourne. We put it on the internet and it turned into a great viral campaign for us.
Your next export market?
The US. It has been hard for us. It’s a protective market and there is a lot of competition. It is not cheap to get it through customs. We are looking for a distributor in the US.
New export markets?
We have big demand from France; we have had a lot of demand through the internet. But we have to make sure we have the resources and want to focus on one area at once.
If you took in an equity partner you could grow faster. Why don’t you?
I want to feel I can control all parts of business. I am happy with my financing arrangements at the bank.
When you start out you trust people, but you don’t always get what you think you will. We have changed manufacturers several times.
Has cash flow been a nightmare?
You have to do very careful budgeting because of the seasonality in swimwear.
What’s your exit strategy?
We have a lot of interest from larger companies but we are very focused on building the brand. We are a top brand in DJs and we have learnt very valuable lessons that only time can teach, such as what the market wants, how to forecast sales, how to not order too much, how not to run out – it takes time to learn that so we are in a good position to grow.
As the company develops there will be a lot more opportunities in expanding into clothing and beachwear markets.
Have you had anyone try to copy your designs?
I had a lot of trademark issues three years ago. A major label hired a high profile swimmer who used Funky trunks. We got lawyers in immediately and made them aware of our trademarks. They backed down. Nothing is more important than trademarking.
Do you regret starting your own business?
It has it’s moments. At the moment I am working 7 in morning to 10 or 11 at night, but every day is what you make it to be. I enjoy the challenge.
The most difficult thing is the uncertainty of your future of business. So day-by-day planning is important as it helps you control the stress of the unknown.