The 2015 edition of the pan-European startup contest Idea Challenge sees an increase in variety and internationality. The series of events re…
They aren’t millennials, they don’t work on a groundbreaking app, not even in tech.
Erika Wilfling-Weberhofer (40) and Karin Gollowitsch (45) aren’t quite the stereotypical startup cofounders you run across these days. Respectively Event Manager at Graz’s Kinderbüro, an NGO for children, and a design teacher, the two women founded knall.bunt, a clothing brand for children and adults, with a line of special designs for persons with disabilities. If their collections are now sold online and in a few retail stores across Austria, running a clothing business, especially on a part-time basis, is still a constant challenge.
Better late than never
The pair met at a seminar in Graz a few years back and bonded over experiencing pregnancy at the same time. The idea and basis for the company goes back as early as 2010, when Karin made a skirt adapted to wheelchair use for Erika’s disabled daughter. With its colourful design, the skirt was immediately coveted by Erika’s second daughter, which sparked the idea of creating a clothing business for people both with and without a handicap.
“I believe that people with disabilities deserve the same beautiful clothes and hip designs as everybody else,” says Erika. Today, 30% of the production is designed for children with disabilities, using the general collection’s colourful fabrics and patterns in specific designs, such as a half-skirt or a versatile blouse.
Their entrepreneurial journey began rather late. Starting up at respectively 35 and 40 years old, and investing their own money and time, was a choice that the two women carefully weighted. “When you’re over 30 years old, throwing yourself into a business is not an easy decision” says Erika, adding that “with a family to care for and a regular job, there is much at stake.”
Yet, Erika and Karin have found ways to make things work.
Within the company, there is a clear distribution of tasks. Karin, the creative mind, takes care of design and production, while Erika is in charge of planning and organisation. Remaining firm in their stance towards producing exclusively in Austria, the two cofounders work in cooperation with a small tailor shop near Graz. To their eyes, making sure everything is made locally is not only a gage of quality, but also a way to avoid child labour at all costs. “We don’t want clothes made by children for children,” says Erika.
Karin; Photo credit: Andreas VormayrFrom the idea to the business
The decision to take the bootstrapping path came naturally. Unlike an on-demand tailor, knall.bunt produces its collections in advance and distributes them in stores on a commission-based system. While allowing for more creative freedom, this business model is also expensive and rather risky, as unsold pieces represent zero return on investment for Erika and Karin. A lucky encounter with German retail group Wehrfritz, which was holding the booth next to them at a trade fair, secured them a purchase deal. A couple of knall.bunt products are now featured in their catalogue.
In 2013, Erika and Karin secured support from the Austrian federal promotional bank (AWS) and their Impulse XS initiative, which ended up being of significant help to the business. The project was allowed 60,000 euros, including 40,000 euros in funding. “In addition to money for the material, we also got financially compensated for the working time spent on this business,” Erika recalls with enthusiasm. Meanwhile, Creative Industries Styria (CIS), a regional corporation promoting entrepreneurship, supports their initiative as well by offering them visibility through their events, such as the Design Month.
Now in its fifth year of existence, the business is more or less breaking even, though it is seriously stifled by administrative expenses tied to the company’s legal status, an Open General Partnership (O.G.). “Compulsory health insurance costs about 1,000 euros for one person every three months; it represents a huge amount of money given the scale of our business,” deplores Erika. She stresses the absurdity of the system, as the two women are “both employed and already benefit from a health insurance package with their respective jobs.”
Erika; Photo credit: Andreas VormayrKeep it small
What’s slightly surprising coming from the two entrepreneurs is that they have no desire for scaling up.
“Like any other fashion designer, we have dreamed - at some point - of having our flagship store on the main square of Graz, but I think having it all would stop us from doing what we do,” says Erika. As a matter of fact, in their fourth year they dismissed the idea of developing the business extensively and decided to keep it as a side activity. “If we did it full-time, the pressure would probably kill our creativity,” she explains.
Rather than expanding its European footprint, the brand focuses on consolidating its presence in Austria by reaching out to more stores. Thus, it could grow its distribution network while maintaining its current production. Erika also explains that the pair is working on changing the company’s legal status to lighten the financial burden tied to the current one.
If Erika credits the valuable entrepreneurial experience gained on the way, she also emphasises the happiness she gets from their business: “When I see people wearing our clothes, the pride that I feel is well-worth all the administrative and financial struggles.”
If anything, knall.bunt is a good example of how entrepreneurs can run a small business without external funding and/or an aspiration to exit.
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