Teo Peiru runs La belle couture, a market leader within the competitive wedding services industry. They have been in the market for 9 years and have helped over 2,600 couples to fulfill their dreams. Employing over 18 staff, La belle couture counts high end hotels like Marina Bay Sands and Shangri-La among their partners.
Corporate Finance Background
Peiru started her career in the financial industry, working in Citibank and then a real estate private equity firm. However, due to the poor economic environment during 2008-2009, things were slow and she felt she had a lot to contribute but wasn’t getting the opportunity to excel. Therefore she started looking out for other opportunities and it so happened that during that time a friend called her and asked if she would be interested in the weddings business.
Back then, many things were being done in an antiquated manner in the weddings services industry and Peiru saw an opportunity to change how things were being done. The person who sold the business actually pitched it as a very simple business to run which was already making money. So based on trust as it was a long time friend, Peiru and her partner took the plunge and acquired La belle couture in 2010.
La belle couture’s Dressing Area
Nightmare of Acquisition
There was a lot of excitement and energy going into the business that they neglected to do one of the most important things in any acquisition, which is due diligence. There were many hidden liabilities in the business. Unfortunately, when you take over a business, you take over all the liabilities that come with it.
One rule to always remember in Buying a Business
Total Value Paid = Price Paid for the Shares + Value of Debt and Liabilities – Cash
A nightmare it was for them when they discovered a huge hole in the business where the liabilities was in the 6 digits. Unable to deal with the stress, Peiru’s cofounder took off leaving her alone in the business. While Peiru was very disappointed and wanted to give her a good lecture, eventually she realised there was no point to that. She just focused on what she could do which was to work on the business.
To plug the gap, Peiru had to divest her property investments which she made with her husband. She made sure all the customers were satisfied with La belle couture’s services, no matter the costs it took, as trust is really important in this business. A major lesson she got out of it though, in her own words: “It’s a death sentence to not know your working capital requirements.” In simple terms, working capital is the amount of money needed to run the business, it can be made up of money that has to be prepaid, like rental, services and inventory.
It’s a death sentence to not know your working capital requirements. – Peiru
Business is Not Just a Spreadsheet
Coming from a finance background, Peiru knew spreadsheets and financial modelling at the back of her hands. However, running a real business was nothing like what was planned on paper. 5 years cash flow projection? What’s the point if you can’t even survive 1 year in business? Financial modelling relies on many assumptions and too many assumptions were wrong. If you don’t know your business well enough, all the outputs from the spreadsheet will be wrong. The beginning was indeed very tough and competitors even spread rumours that she will close down within 3 months. Competitors tried to headhunt her staff and there was resistance within the team against some of the changes she was trying to implement. However, not wanting to let employes down, she saw La belle Couture through those very tough days with her sheer determination.
Lessons From Marketing and Positioning
Initially, it seemed natural to position La belle as a glamorous upmarket brand as it felt more prestigious. Over time though, she found out that people actually want things that are realistic. They want good information and real value added services, not the ultra glamorous and expensive wedding that is out of reach to most people. Traditional ways of showing unattainable models and wedding pictures are over. One very big insight she had. “You would think that upmarket branding can be more profitable, but in a market like Singapore, it makes more sense to build a more relatable brand. Do not think that you know what the market wants, let the market tell you.”
One of La belle couture’s strength is the large network of curated vendors. They ensure the quality of their vendors through a rigorous process and also engage with the vendors constantly to make sure that the couples get the best value for their money. Weddings are generally a very stressful time for the couple and La belle couture helps them reduce the stress and make it any enjoyable process for them.
You would think that upmarket branding can be more profitable, but in a market like Singapore, it makes more sense to build a more relatable brand. Do not think that you know what the market wants, let the market tell you – Peiru
Keeping an Edge over Competition
The wedding services industry is by nature highly competitive. Competitors were constantly copying La belle’s promotions, advertisements and even calling their suppliers. That keeps Peiru on her toes to keep innovating. “If i am not doing anything, I will feel restless and don’t feel secure.” Implementation of technology is a game changer for brick and mortar businesses like La belle. The old system was through appointment books and most of the records were by pen and paper. By automating with CRM systems and lead acquisition software, La belle is able to not only improve productivity but also generate new leads.
Peiru believes her competitive advantage lies in their culture of constant learning and improving that cannot be copied. She invest heavily in staff training, inviting coaches to teach on team work, communication skills, sales skills, marketing courses and more. The culture of learning stems from her personal beliefs and habits. Personally, Peiru hates wasting time and would take every opportunity to be learning something. In fact, she loves listening to audiobooks. She listens to them while driving, waiting in the queue and so on.
Being such a driven business owner, avid learner and armed with a dynamic team, Peiru’s La belle couture will certainly remain the industry leader and reach greater heights.