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How Crowdfunding Is Changing the Fashion Business

Historically, an item of clothing was not produced until a customer ordered it. In an industry that has moved beyond bespoke toward mass offshore production of fast fashion, online retailers Gustin, The Petite Shop, and Before the Label are bringing decision-making back to the customer and production back to the United States for faster turnaround and lower minimums.All three companies use an “in-house” crowdfunding model for their business – think private Kickstarter for a single designer or retailer. Each apparel or accessory item is listed in its own campaign with its own production minimum. Only if the item gets enough backers is it produced.Contrast this with the modern-day retail model: Brands design an entire season’s collection of 10-15 styles, do their best to estimate the demand based on wholesale orders or past seasons’ performance, and then produce thousands of pieces abroad. These mass-produced pieces are presented to consumers at inflated prices to account for probable markdowns as time and excess supply devalue them. Consumer decisions are motivated by a lot of different factors, and these decisions can potentially serve as powerful catalysts for social change. There is another choice – a choice that is emerging as a win-win-win for the customer, the designer, and where applicable, the retailer.Related: Beanies, Tees and Steez: How Shaun Neff Built a $100 Million Business Out of His Backpack[1]Stephen Powell, co-founder of Gustin[2], a premium menswear line designed and produced in San Francisco, explains: “We’ve been taught as consumers -- over the last five years in particular -- that things should just show up on our doorstep within days. Immediate gratification. But there’s a new business model for those who are willing to trade a bit more time to get quality, at the same price point you were paying before”. In Gustin’s case, that trade…
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Implement Personal Change with Lessons from Stephen Covey

It’s the 25th anniversary of the publication of Stephen Covey’s “The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change.” If you haven’t read Covey’s book, this is a good time to pick up a copy and learn how personal change can translate into professional success. The 7 Habits are: 1         Be Proactive 2         Begin with the End in Mind 3         Put First Things First 4         Think Win-Win 5         Seek First to Understand, Then to be Understood 6         Synergize 7         Sharpen the Saw The first three habits deal with moving from being dependent to independent. This leads to personal change and independence. Everything is built on the formation of a strong set of core values. The book takes you through the process of writing a mission statement that includes your moral, ethical, centered values so that it expresses your true core values. The statement itself serves as a reminder of the values. This core will be the foundation for making every decision in your personal and professional life. The mission statement and examination of your values cannot be taken lightly. The habits are designed to be learned and internalized and implemented in order. Covey calls it the “inside-out” approach. You must master inner change before you can apply your new, independent skills to an interdependent situation such as marriage, family, or business. If you attempt to move to Habits 4-6 without completely adopting 1-3, you will not be able to successfully achieve the desired results. You also will struggle with the concepts that move towards interdependence. The Habits that deal with interdependence focus on communication based on your core values, empathic listening and communication, and cooperation. All of these lead towards the goal of becoming an effective leader and manager or husband and father or basically a steady,…
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Starbucks Supports Education

Starbucks is certainly a recognizable brand. Every city, big or small, seems to have them scattered throughout the landscape, offering high-end coffee and pastries. The company is constantly innovating and working on its brand image. Starbucks opened its doors for the first time in Seattle’s Pike Place Market 1971. They have aspired to be a different kind of company right from the start. The say that their mission is “…to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.” From the one small store in 1971, Starbucks has grown to over 21,000 stores in 65 countries. The company offers coffee, obviously, but also a coffeehouse flavor. The décor, the music, the ambience, all invite people to come in, have a seat and enjoy some coffee. Of course, coffee isn’t the only thing on the menu. Teas, frozen drinks, and pastries are also staples of the menu. Business ethics and compliance are important to the company. They are committed to helping create positive change. They establish relationships within the communities of their locations. In 1997, they began funding literacy programs. The Starbucks Foundation also provides grants for Youth Leadership, offers opportunities for youth, engages in community service, and supports the countries that produce the coffee beans for them. In 2013, the Starbucks Corporation gave $15.6 million in charitable endeavors. Starbucks is also committed to reducing their impact on the environment. Their stores are environmentally sound and they provide easy access to recycle their cups. They also collaborate with others to reduce packaging waste for their inventory of mugs and other coffee-related items for sale. They are certainly environmentally and community friendly, but they are also a very innovative and progressive business. Every season, new coffees are introduced or brought back for a limited…
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5 Big Mistakes Entrepreneurs Make With Their PR Efforts

Whether an entrepreneur has hired a PR firm or communications director or they are attempting to do public relations on their own, there are a few key mistakes that they make time and again, preventing them from ever getting covered and their publicist or communication director from doing the job they are paid for. Despite protests from the people who work for them, many entrepreneurs simply insist on doing things their own way, thereby getting in their own way. Here are five big mistakes they can make: 1. Attempting to treat reporters, editors and producers like staff. Many entrepreneurs expect to be able to make the same demands on the media that they do on their staff, from how many links to their website they feel should be included to trying to control the interview questions. It is important for entrepreneurs to keep in mind that the media is doing them a favor, not the other way around. Related: Are You Ready for a PR Firm?[1] Do not ask for questions in advance (know your topic), advise them on which questions they may and may not ask you or commit any of the other myriad of sins that entrepreneurs make when they confuse being controlling with controlling the message. 2. Attempting to delegate their interviews and guest pieces to junior staff. Many entrepreneurs read The 4-Hour Workweek and take it too much to heart. While being able to delegate tasks to subordinates is an important part of scaling one’s business, and Mr. Ferriss’s advice is both insightful and inspirational, delegating has no place in public relations. From small podcasts to large publications, the majority of media outlets want to hear from the head honcho. It is, for example, completely inappropriate to send anyone but the CEO to an interview meant…
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What Happens When a Mall Is Split Between Two Minimum Wages?

What happens when half of a mall's minimum wage shoots up by $2, while the rest stays the same? The Westfield Valley Fair Mall just found out. The California mall straddles two cities: Santa Clara and San Jose. With San Jose's 2012 decision to raise the city's minimum wage from $8 to $10 an hour, a huge chunk of the mall's employees quickly received a salary boost, reports NPR[1]. Stores that paid employees minimum wage, or close to it, were faced with the difficult task of attempting to find a way to turn a profit even with increased employee costs. NPR interviewed Wendy's Pretzels owner Yvonne Ryzak who struggled to find a keep her shop profitable while increasing workers' pay 25 percent. Related: Why the Court's Ruling on FedEx Drivers Could Jeopardize the Franchise Model[2] "I don't sell 250 to 300 more pretzels magically just because minimum wage went up," she told the outlet. Ryzak was reluctant to fire employees, fearing longer lines and lost sales. And she reportedly couldn't increase prices and still compete with pretzel shops on the Santa Clara side of the mall. In the end she raised prices slightly, and accepted that profits would decrease – a decision that ultimately cut into her staff's bonuses, which are 15 percent of profits. Meanwhile, the other side of the mall has faced a different set of problems. Unsurprisingly, potential employees flock to stores where they will be paid more, leaving the Santa Clara side with reportedly subpar service. Related: In Sexual Harassment Case, California Rules Domino's Isn't Responsible for Misconduct[3] "We get the bottom of the barrel here," Philip Sandigo, a shoe store manager, told NPR in an interview. Of course, there is no maximum wage law forcing the $8 per hour contingent from raising their wages. Sandigo…
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Our Progress Report on the JOBS Act

Entrepreneurs and small-business advocates had hoped the Jumpstart Our Business Startups (JOBS) Act[1], which President Obama signed into law in April 2012, would be a boon for startups needing financing. But with the Securities and Exchange Commission still hammering out the rules on equity crowdfunding--the proposed initial regulations were too costly and cumbersome for many small startups--the law hasn't exactly ignited a bonanza of new businesses. Two years later, here's our progress report. The good news: Title II of the JOBS Act went into effect in September 2013, allowing private companies to publicly advertise that they're raising capital. This general solicitation rule has greatly benefited 'treps seeking accredited investors; no longer must they keep mum in public forums about their fundraising efforts for fear of breaking securities laws. "Title II seems to be working," says Chris Tyrrell, chair of advocacy group Crowdfund Intermediary Regulatory Advocates, founded after the signing of the JOBS Act. "In the first seven months of operation, over $100 billion in private offerings used some part of Title II." That's not to say startups are buying billboards or magazine ads to publicize their fundraising efforts. But social media platforms--Twitter and LinkedIn in particular--have become breeding grounds for startups announcing their offerings, says Sara Hanks, CEO and founder of CrowdCheck[2], a due-diligence service for crowdfunding[3] and other online alternative investments. Another cause for celebration is the skyrocketing growth of rewards-based crowdfunding, which surely received a boost from all the publicity surrounding the JOBS Act, Tyrrell says. In 2013 alone, crowdfunding platforms raised $5.1 billion, according to crowdfunding site Fundable. The bad news: Startups, brokers and crowdfunding platforms remain frustrated by excessive red tape and compliance costs for small businesses that wish to raise cash from the crowd--specifically, up to $1 million a year from unaccredited investors[4]. For example,…
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