07/06/2016 5:39 AM AEST | Updated 15/07/2016 12:53 PM AEST

How To Launch A Small Business In An Industry You Know Nothing About

No experience? No problem!

REUTERS/Antony Njuguna (KENYA)
Richard Branson knew nothing about running an airline before launching Virgin Atlantic.

Whoever said that success comes from sticking to what you know has obviously never met a determined entrepreneur.

Sure, starting a business in an industry you know nothing about is risky, but it can also have great rewards and present an opportunity to disrupt a stagnant or ineffective industry.

Look at the disruption pioneer Richard Branson -- he had no experience running an airline before he launched Virgin Atlantic -- he just knew that air travel could be a much better experience for the customer, and catered to growing demand for a better service.

Same goes with the founders of toy empire Mattel -- Harold "Matt" Matson and Elliot Handler had no experience making toys before they founded Mattel Creations in 1945. They were making simple picture frames when they decided to use the scraps to build dollhouses. People loved them, and boom, a multi-billion dollar empire was born.

When it comes to launching in an unknown industry, it all comes down to how calculated the risk is -- and how well you research the industry you want to break into.

Young Aussie entrepreneurs James Wakefield and Robin McGowan are great examples of how having a good idea can translate into big business -- even if you lack experience.

James Wakefield and Robin McGowan started men's suit business InStitchu with no experience in fashion.

The pair left high-profile corporate jobs to launch InStitchu, a site where clients can customise tailored suits and shirts, after identifying a gap in the men's fashion market.

"We both entered the workforce and faced the same challenge (a lot of) young guys are faced with; you suddenly have to have this corporate wardrobe and it's a pretty expensive thing to be expected to have two to three suits and half a dozen shirts," Wakefield told The Huffington Post Australia.

"And the process is full of pain points; you might decide on the type of the suit you're after and then find you have to compromise on style, fit and price.

"You buy it anyway and then you might have to get it altered which takes another week, and costs $100-$150 and it's only then, at the end of that process, can you decide if you're actually happy with it.

"We thought there had to be an angle that technology could play in simplifying and streamlining that process, and making it a better experience for the customer."

Some of the InSitchu suit designs that can be customised.

How it works

With InStitchu, customers completely customise and design their own suits online, with prices starting from around $400.

"Our platform lets consumers anywhere in the world access high-quality tailors in Asia," he said.

"Customers design a garment using our interactive design tools, customising every aspect of it; fabric, lapels, buttons, monograming, lining -- you name it.

"They then enter their measurements, place the order and have it delivered anywhere in the world with our perfect fit guarantee.

"When the orders arrives, we'll pay for any alterations, remake it free of charge, or give you a full refund if you're not happy with it for any reason."

Don't let inexperience stop you

Nearly four years on, InStitchu has grown to include boutique showrooms in Melbourne, Sydney and Brisbane, with plans for additional stores and an expansion into the U.S. market on the horizon.

The guys now employ more than 20 staff and have boosted the value of their business to more than $10 million.

"We had nothing to do with suiting space, the tailoring space or online retail; we'd never run businesses before," Wakefield said.

"We really had to throw ourselves in the deep end and upskill ourselves on literally every single aspect of it, and learn everything about this new industry and try to grow the business and create a brand.

"We were passionate about suits, but didn't have the technical knowledge around patterns or construction techniques, so we started speaking with as many experienced, traditional tailors as possible, mainly in the UK and the U.S.

"We were able to leverage their skills and experience and get their insights into how they thought our business model would work, and wouldn't work."

One of InStitchu's popular suit designs.

No money? Don't panic

Wakefield said finding an investor was crucial to the startup's success.

"Early on, we both found mentors to catch up with and bounce ideas off, and we did look to get a strategic investor on board -- just to make sure we had the right internal procedures and structures in place," he said.

"We didn't want to go into a startup phase and build a great business but then not have the infrastructure to support a scaling and growing business.

"The most expensive part of launching the business was building the website, and Robin and I had no cash between us, so we did need to get a web developer involved very early on who shared our vision. We were able to offer him a small amount of equity in the business in return for building that website.

"And that's what really allowed us to get started from day one, we otherwise we wouldn't have had any options to build the site."

InStitchu's website allows customers to design their own suit.

Don't baulk at challenges

Wakefield and McGowan quickly realised that some clients weren't comfortable ordering suits online so they worked on getting the brand a physical presence.

"Pretty quickly, we realised a lot of customers do want that face-to-face interaction. So we started doing pop-ups stores and travelling tailors that visited offices and homes," Wakefield said.

"About two years after launching we opened a showroom. Now we've got beautiful showrooms in Sydney, Melbourne and Brisbane, and Auckland from next week. And we're looking at the U.S. towards the end of this year.

"Our showrooms really act as an extension of our website; the order is still placed through the website, and we show customers how to use it and create a profile. We've created an old-world tailoring experience; Chesterfield lounges, rugs, fabric samples and all that was usually seen in stores for people spending upwards of $2000, but we've used technology to cut down on all of the overheads and pass on all those cost savings to the customer."

Timing is everything

Wakefield said every new business owner, particularly those taking on an unknown industry, will make mistakes.

"I've always wanted to run my own business and always wanted to create a brand," he said. "From my perspective, I was young, I didn't have a mortgage, I didn't have any dependent family members, so it was now or never.

"And I thought to myself, 'what's the worst that can happen? -- it doesn't work out and I go back to my corporate career'.

"The thing is if you've got a good product and offer good service, you'll have good customer retention and referrals, and that's where your growth is going to come from.

"Word of mouth has been the catalyst for our growth and that only comes off the back of a good product, good service and a brand."

Wakefield's tips for breaking into an industry you know nothing about

Surround yourself with experienced people in that industry

"That could be mentors or strategic investors, but really it's about minimising the number of risks you take by learning from others," he said.

Do your research

"Always read everything you can about the industry you're in," he said. "Knowing what's happening with current trends and keeping your finger on the pulse of the industry is really important."

Decide if you want to go it alone

"Personally, I don't think I would ever go and launch or start a business myself as a single founder," he said. "I'll always look for a co-founder; having someone there to bounce ideas off and get input from is invaluable."