We Moved To Vietnam And Started A $276K/Year Clothing Manufacturing Business
Hello! Who are you and what business did you start?
Hello everyone, my name is Jesse James and I am the visionary of Yoke Apparel Manufacturing which is located in Vietnam. Yoke is a fully comprehensive clothing manufacturing service specializing in low minimum order quantities.
We have a diverse capability in terms of service offerings but women's fashion and casual wear are our highest sellers. We have an international customer base of fashion brands using our services however a majority of customers are based in the United States, Australia, and Europe.
Just after 2 years of operation, we managed to get the company in a position of automation and stability. We are now focused on driving growth. Currently, the company has an average monthly revenue of $23,000 however this is limited to our capacity and the size of our operation.
Covid19 interruptions and restrictions have prevented us from increasing our capacity which has been hard to watch as a business owner. However, we are excited to open up the floodgates as customer demand is strong and we could expect to grow 2-3x sustainably per annum.
What's your backstory and how did you come up with the idea?
I was previously a residential real estate agent in an affluent inner-city neighborhood in Australia. At the time my wife and I couldn’t help but notice how many people had strong opinions on social issues however no one was doing anything about them. Concurrently as weird as it sounds I was having many vivid dreams about Vietnam. We felt inspired to make a real tangible difference in the world.
Within a couple of months without a plan, we packed up, sold everything, and moved to Vietnam.
My wife and I have a passion for fashion and planned on starting our clothing label however it didn't meet our main criteria of having a hands-on approach to helping people. So we moved our focus onto manufacturing clothing for other brands so we could directly hire employees who we could help.
We collaborated with some community partners who referred us to at-risk locals who had no skills, no support, and were in vulnerable situations. We hired them and some skilled workers and within 15 days were up and running.
We had no experience in the field and the little planning we did do, was extremely inaccurate. We only started with a very low $20,000 investment and it ran out fast but with a lot of perseverance and by the grace of God we just managed to stay afloat.
Take us through the process of designing, prototyping, and manufacturing your first product.
Early on, we didn't know, the suppliers of the most skilled workforce so our services were incredibly limited. We were taking orders based on pictures and using basic hand patterns to create designs.
Before we had a skilled workforce, life was extremely challenging. Everything that could go wrong, went wrong. I’m not one to micromanage however I had to be alert and watch 24/7.
We had issues with purchasing the wrong fabric and quantities, patterns being made incorrectly, grading of sizes. The list goes on. I was kind of a prisoner to the team I had because I was in a foreign non-English speaking country. I persevered for quite some time until a local and trusted friend stepped in and helped me clean things up by recruiting more capable employees. Life has been much easier since that point and recruitment has improved immensely.
Over time and with a mammoth learning curve we improved our supply chain and our technical capability. We achieved this by allocating our budget to hiring the best people we could find. We now have high-level fashion designers, technical designers, and fabric merchandisers.
As a result, we are now in a position to offer world-class service with an incredibly diverse set of capabilities. By no means have we reached the pinnacle, we are still actively learning and applying our findings day by day.
Describe the process of launching the business.
Our company launch was all a blur. Within a few days of us coming up with the idea, we met a foreigner who had a small printing operation. He needed someone to sew his company's jobs and had plenty of room for us to sublease. It felt like a “now or never” moment so we ran a few numbers on an excel spreadsheet and within 15 days had bought equipment, hired staff, and were operational.
Unfortunately, the information and the estimated work didn't quite come to fruition. We had planned on just servicing Vietnam however there was no workaround and no way of competing with local prices. So within a month, I had to completely change our target market and head to where the money was.
Due to low funds, I had to learn how to build a website. We needed new foreign customers but didn't have existing relationships. We are still running the same website however we are currently going through a redesign. Thankfully a good friend in Australia that I hadn't spoken with for a long time contacted me about making some stuff for his company. From that, he referred most of our original customers and he is one of the main reasons we are still operating today.
If you want to be the best you have to hire the best. If you are in it for the long haul, don't worry about your profits, they will come in time.
We financed this project on our own. The initial investment was quite low so there was no need to raise funds. The risk to reward was disproportionated in our favor so we weren't afraid to learn and make some mistakes along the way.
We learned a few mixed lessons about our launch that might be useful to others.
You need accurate data to plan and model your future business, preferably from third-party sources.
You may not have your target audience correct, have a contingency plan, and be prepared to move quickly.
Build a customer base before you start. Create a website and social accounts. Start networking and delivering free value. Be the expert in your niche.
Since launch, what has worked to attract and retain customers?
I’ve worked in sales for almost 10 years now and it's my opinion that one of the biggest lies taught is “you should find as many customers as possible”. In contrast, I believe referral and word of mouth is the most superior customer acquisition and retention strategy available for most service industries.
In addition to this, select your customers. If they aren't nice people and cause you problems, there's a good chance the people they refer to will be the same. Get rid of them. Work with easy and nice people.
We have been fortunate that most of our business to date has been repeated or by word of mouth. Although we are now very focused on SEO. Out of all of the strategies available, this seems to be the most sustainable and cost-effective solution for our business.
We do have a very small presence on most social media platforms however fortunately due to our current workload and customer demand we don't put in a great deal of energy. We do have a strategy planned out and are very keen to deploy it when our capacity increases.
How are you doing today and what does the future look like?
We are very happy that we managed to get the company profitable within 12 months. Our profits were put back into growth and distributed to a variety of charitable donations. We are only just at the start of our optimization phase however our current operating profit is 24%. We are optimistic we can increase these figures over the next 12 months. Considering covid interruptions we are still managing just under 150% year over year growth.
As previously mentioned we don’t have customer acquisition costs. However, as soon as we ramp up our marketing efforts our biggest focus will be on Customer Lifetime Value. Because we have been in business for a few years now, we have plenty of quality data on how much we need to spend to get our customers. This all comes back to the key emphasis of servicing your customers well. Short-term it may take up a lot of time but in the long run, it will save you a ton of time and money.
Our short-term goals are mostly focused on efficiency and increasing capacity to meet demand. We are very focused on quality so it may take some time to grow but there is no rush. We will just take each day as it comes, you can't rush good things, they take time.
Our long-term goals are as ambitious as you can get. We want to revolutionize the clothing industry. We will develop the entire vertical supply chain for clothing manufacturing. We will only offer sustainable fabrics, accessories, and packing options. We will redistribute wealth and develop underprivileged communities.
Through starting the business, have you learned anything particularly helpful or advantageous?
During the startup phase, we learned quickly that you need to be very flexible. You need to adapt quickly and solve numerous problems daily. I guess the definition of being an entrepreneur is essentially being a problem solver.
Covid19 was a significant blindside for our business as we rely heavily on global supply chains. We quite literally had to rebuild our whole supply chain, sourcing products from different countries. I guess blindsides are hard to predict but you kind of need to drop everything you are doing, think ahead and try to find alternate solutions as quickly as possible.
The poorest decision I have made during the startup was handing over too much responsibility to 1 individual. You need to be super involved in all decision-making in a growing company. Don't take your finger off the pulse. The best way to do this is to build a strong team of leaders around you to manage your time more effectively.
What platform/tools do you use for your business?
I think one of the most important things any service business needs is good ERP software. You can’t measure what you dont record and you can see the big picture without visualization. A mistake we had was not having an ERP sooner. Luckily we were always over-budget and over-quoted so we never got too far out of shape.
We custom-built our own ERP software and feel it is so effective we could be successful in any business venture. It manages every facet of our entire business. Accounting, finance, HR, CRM, product databases, inventory management, logistics, marketing. We are now working on a new business venture to offer this service to startups and established businesses.
Other than that we haven't utilized any other notable tech stacks to date.
What have been the most influential books, podcasts, or other resources?
The bible is the most influential book I have read. It gives you a good insight into behavior throughout history, ethics, finance, and wisdom. A good book on how to build and grow a socially contributing business.
You are going to make mistakes, you need to just dive in and get your hands dirty. An old mentor of mine once said that “you should see mistakes as opportunities.”
Advice for other entrepreneurs who want to get started or are just starting out?
We often hear the word “mindset” thrown around a little too often. However, it is so important. If you're an entrepreneur you need to live in the future, really far into the future. When you are truly present in the future and connected to your goal, all of the setbacks will just be small bumps in the road. Problems that could derail will no longer seem as significant and you will find solutions far easier this way.
Hiring the right people for the job is one of the most critical components for long-term success. If you want to be the best you have to hire the best. If you are in it for the long haul, don't worry about your profits, they will come in time.
I guess the biggest mistake I see entrepreneurs making is procrastinating or oscillating between business ideas or strategies. In addition, just really trying to perfect an idea without action. You are going to make mistakes, you need to just dive in and get your hands dirty. An old mentor of mine once said that “you should see mistakes as opportunities. The more you make and the faster you make them the quicker you learn and the more you can improve''. From my experience, I've found this to be very accurate.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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