Business Profile: Dalia MacPhee Clothing Brand
Red-carpet couture designer Dalia MacPhee explains how rewards cards helped her launch her clothing line
Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Small Business Credit Profiles,” a weekly column featuring small business owners' journey with credit and credit cards for CreditCards.com.
Dalia MacPhee is the founder of the Dalia MacPhee clothing brand. Her gowns are donned by such celebrities as Scarlett Johansson, Olivia Munn, Alyssa Milano, Serena Williams and Khloé Kardashian. Stores across the globe carry her creations. An avowed animal lover, MacPhee makes every effort to ensure that her products, from handbags to dresses, are made of vegan materials. For that reason, her red-carpet designs were deemed “couture with a conscience” by Entertainment Tonight.
So how did this Vancouver native – who was told by her seventh-grade home economics teacher to never pursue a career in fashion because she couldn’t complete a blouse project – become the go-to designer for today’s most stunning and powerful women? Talent and drive, of course, but credit has also been a partner in her success.
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What was your credit like when you first launched your company? Did you make any mistakes?
I started my business at 21 years old, so I had no credit at all! I was given a starter credit card from my Canadian bank. My main mistake was not charging and repaying earlier, though. For a while I didn’t use my credit card at all, as I didn’t need to because I was using cash. But not having that [credit] history made it harder for me later when I did need to increase my credit limits.
And after you discovered the importance of good credit, did you use it to your advantage?
Yes, I made sure to use it often for all my business purchases – such as fabric – and then paid it down on time. After about six months, I called and spoke with one of the [credit card] representatives, explaining my company. She raised my limit. As a new and young business owner I was ecstatic.
With that one card I was able to accumulate a lot of points for airline miles. The first big trade show where I presented my collection at was in Atlanta, Georgia, and I used the rewards to get myself there. That was the show that helped catapult my line and put the motion in place for my business, so those credit card miles were a huge win for me.
How do you use credit cards now for your business?
I have a couple of cards that I use often. The first is an Alaska Airlines Visa Signature credit card. Being from Vancouver, I am usually traveling between Canada and the United States. I love flying Alaska, and getting 3 miles for every dollar I charge with that card is great. There are additional perks too, such as being able to check my first bag free, first-class upgrades, and there is no mileage cap. I use this card for my airline travel and also to purchase hotel rooms and take care of other travel expenses.
Then there is my Capital One VentureOne Rewards credit card. I love the fact there is no annual fee on this card, and no foreign transaction fees, which is a huge benefit for international travel that I do often for work. This card also offers a high credit limit and up to 10 times on travel miles. This is the one I use now for purchasing fabric, paying my suppliers and buying office supplies.
My PayPal Cash Back Mastercard comes in handy for me, too, as I get extra points for gas transactions – and every other purchase I make with that card.
Tip: If you travel constantly to promote your small business, consider using an airline credit card that can help you earn miles and have access to travel perks including free checked bags and priority boarding.
What’s your credit management style?
In a nutshell, I never borrow more than I can afford. But in our business, we also give credit, so I’m on the other side, too. We have to be choosy regarding which accounts we provide a credit line to, since offering terms to boutiques and department stores can put you under if you’re not careful.
Any credit tips for others wanting to begin a business or grow their existing venture in financially smart ways?
When you are starting out, you have to bootstrap. Don’t be afraid of that. Get creative and use the power of technology to find ways to save on various business needs. In a company like ours, the cost of inventory can kill you, so try not to overstock. Buy frugally.
I think you should apply for loans and increased lines of credit when your business is growing, even if you don’t need them. That’s when you will have the best opportunity for success, and you will thank yourself when you do need to borrow money for a rainy day.