Here’s what you missed from June’s Utah Business Founder Friday event.

5 business lessons from Ivy City Co. co-founder Whitney Smith

Here’s what you missed from June’s Utah Business Founder Friday event.
Melanie Jones and Whitney Smith at Founder Friday. | Photo courtesy of Amber Manning

Once a month, Utah Business hosts Founder Friday, a free event sponsored by BONCO, Kiln and KaJae that showcases the wisdom of Utah-based founders. In May, Kiln hosted the conversation between Utah Business Editor-in-Chief Melanie Jones and Ivy City Co. co-founder Whitney Smith. Here’s what you missed.

1. Know your business options.

When Whitney Smith and her co-founders realized their Ivy City Co. dreams, they first had to decide on a business model. At the time, boutiques were all the rage, but many were selling similar products through the wholesale market and undercutting each other.

“Going the wholesale route, you’re not making as much money because it’s usually just a 2x markup. … When we jumped into producing our own stuff, we got better markups.”

Smith says working directly with manufacturers and designing their own dresses made them more money, but the tradeoff was the amount of work required to create unique designs. Now, Smith feels Ivy City Co. “came out on top” because of their efforts. 

Since the co-founders were designing their own clothes, Ivy City Co. built more personal relationships with manufacturing partners, allowing them to create specific dresses in the wide array of sizes they are now known for. 

2. Find a niche. Find a why.

“The idea of Ivy came because [Natasha] was a mother, and we noticed that there was this niche market for dresses that wasn’t being met at the time: something that felt a little more conservative yet was feminine and beautiful,” Smith says, mentioning that the market was also missing size ranges outside the typical small, medium, large and matching dresses for mothers and daughters. Ivy City Co. found their niche.

The next question was the “why,” and joy came as an easy answer. Sometimes, just putting on a good dress and feeling confident can change your world. Ivy City Co.’s dresses inspire confidence, beauty and power in their wearers. With that boost, women can be better in every aspect of their lives.

“We started to learn as we were scaling that you can’t hold that strong bottom line if you’re going to invest in your team and your operations and really grow the business.”

3. Put your community first.

Community should be a business’s No. 1 driver, Smith says; if customers don’t feel you are on their side, they won’t stick with you. 

Ivy City Co. keeps its community front and center by championing its famous inclusivity always. While other companies invite influencers to promotional events, Ivy City Co. crafts fashion shows for the entire community to attend. 

Smith reminded listeners that customers aren’t just purchasing from Ivy City Co. — they are Ivy City Co. 

4. Differentiate through quality.

Smith says Ivy City Co. differentiates its products by creating value. While fast-fashion brands can duplicate items in hours, the Ivy City Co. team spends a lot of time perfecting their designs. 

“If [fast-fashion brands] are able to sell it for less than half the price, you’re not getting the same quality product,” Smith says. “We are very picky on what we release. If it doesn’t pass quality control, we won’t release it or sell it at full price. … People want to purchase from us because they love our brand. They love the experience they get when they purchase.”

5. Invest everything back into your business. 

Ivy City Co. started with a $10,000 investment from one of the co-founder’s husbands. Smith focused on keeping Ivy City Co.’s profit margin around 30 percent for many years by investing everything back into the company. During that time, the founders didn’t take paychecks. 

“We’ve learned since that it’s not normal to hold a 30 percent profit margin. … I just never wanted to fail, so I was gung-ho on having a 30 percent bottom line,” Smith says. “We started to learn as we were scaling that you can’t hold that strong bottom line if you’re going to invest in your team and your operations and really grow the business.”

By lowering the bottom line, Ivy City Co. was able to bring on new team members and add more items to its inventory. Smith says the goal with inventory has always been to sell out, but once the profit margin dropped, the company invested in keeping an “Essentials” collection always in stock. This simple move helped the company sell more dresses and grow quickly, culminating in Ivy City Co. landing No. 6 on Utah Business’ Fast 50 list last year.

Savannah Beth Withers Taylor is the assistant editor of Utah Business and a graduate of the editing and publishing program at Brigham Young University. Beth has written content about travel, academics, and mental health for Stowaway magazine, BYU College of Humanities and United Way. She enjoys traveling, reading, eating, and mercilessly defeating loved ones in anything competitive.