Michael Kaplan | Crain's Philadelphia

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Michael Kaplan

Background:  

A century after Lena H. Bryant founded Lane Bryant—the first women's clothing line exclusively devoted to plus-size apparel—her great-grandsons Michael and Nick Kaplan are following in her footsteps. Since launching the plus-size women's clothing retailer Fashion to Figure in New York in 2004, they have expanded to Connecticut, Delaware, Georgia, Maryland, Massachusetts and New Jersey. 

The Mistake:  

We started by borrowing $400,000, and we were that very classic borrow-money-to-start-a-retail-business. We're now a multi-channel, national, experience-driven retailer, but we started by opening a single store. When you bootstrap a business as opposed to having venture capital, you're very, very cautious with your dollar and investment. We wanted to be very frugal and do as much as we could on our own to save capital. 

had the idea for the business and came out of Harvard Business School, but I didn't have a merchandising background. And we were so cautious with our dollar that we thought that we could actually buy the merchandise and do a lot of things on our ownThen we saw that we weren't performing as well as we wanted to on the product level.  

One of the mistakes that we made early on was not loosening up and understanding that you have to not do everything yourself. We didn't get comfortable early enough in investing in talent around us. It took us about 18 months before we really got out of our own way and invested in somebody from Saks Fifth Avenue to come in and be a great merchant—and we should have made that investment from day one.  

Don't be frugal about everything.

The Lesson:

What we learned was, don't be frugal about everything. Certainly be judicious, but spend the money on a phenomenal merchant and fashion talent because that is the business that you are in. And if that's not your talent, get out of your own way.  

It’s difficult to recognize that. It takes quite a bit of emotional intelligence. You've really got to be self-aware. I also think having a phenomenal board of advisors as well as a board of directors always helps you to push and makes you flag issues. But I think you really have to pay attention to the patterns. Ask yourself: "Am I getting the results that I want both financially and qualitatively in the business?" If not, maybe I should try a different approach.  

Growing a business from a sheet of paper to fruition, to growth, to scale, requires different skills at every point in that chain. If you want to be the person who lives up to the challenges, you have to constantly ask yourself, Am I doing now what's needed? Or am I just in a rhythm of how I have always done things? Because anybody in any venture, if you are not looking at yourself in the mirror and constantly second-guessing and asking, “Is there a better way?” then I am not sure how anybody could grow. You can't take yourself so seriously as to not constantly rethink how you are doing things.  

The lesson translates to our digital business now as well. We have been in the experience business in retail stores. We know now, because of those early days, that we’re not going to try to figure out the digital business on our own. We're really going to invest in some great talent for that, and we are much more comfortable doing that today because of what we lived throughbloodying our nose in mistakes and only getting around to doing it properly.  

One of the things you learn early on, making mistakes, is that succeeding is actually not getting everything right. It's being able to identify your mistakes very quickly and adapt and change and learn very fast. What we learned from our mistake is that while it may be comfortable to constantly do things on the cheap because you won't see the cash come out of your bank account, that may not be the right thing to get the business to the next place. It may take some discomfort and stress to bring in the right people or asset, but if you do that, the capital will follow.  

Follow Michael Kaplan on Twitter at @kappyfones.

Pictured: Michael Kaplan. | Photo courtesy of Fashion to Figure.

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