"One of the benefits of a creative background is that you have to learn to deal with rejection ... 90 per cent of the time it fails and 10 per cent of the time it works," says the now 30-year-old founder of The Social Studio in Melbourne.

"It's really good training for business because you learn to try new things and be a bit adventurous."

But luckily, when McQuilten hit the phones in 2009, among the rejections were also a few solid promises of support, including eight professionals who were keen to join a board of management. Topping the responses, though, was a grant from a philanthropist.

"It was not enough to run an enterprise but we used it to get a lease on the place and to employ a part-time teacher," says McQuilten. "It was a bit of a risk to take on a lease and take on a project without funding but we were prepared to see it as a bit of an adventure."

A few years in, The Social Studio is known for its creative designs, often with wild splashes of colour. But it has also made its name helping young refugees carve out an exciting future in Australia.

The Collingwood studio and its cafe, The Cutting Table, offer newcomers - many from the Horn of Africa - the chance to learn clothing design or hospitality skills, make connections and find a sense of belonging.

Design students collaborate with professionals to create what McQuilten describes as "timeless fashion," a deliberate antidote to the waste of a more disposable fashion industry. Manufacturing is done by a team of three on site.

With a nurturing, family-like atmosphere, the studio helps build students' confidence to the point where they might choose to go on to other things. So far that's included further study or plum jobs at labels including Mariana Hardwick and Nobody Jeans. The Social Studio's designs have also appeared on catwalks at events such as Melbourne's Spring Fashion Week.

"Our events, they're kind of electric because there's so much pride in the room," says McQuilten.

"As the enterprise grows we all have a stronger sense of ownership and I guess connection to the wider community and the wider marketplace."

The enterprise now has 18 paid staff in hospitality, retail and manufacturing; 85 per cent came to Australia as refugees. All told, a band of about 50 people, including volunteers, keeps the place humming.

The design school operates through fundraising and grants, while the clothing shop and the cafe have to be self-sustaining. But success is not necessarily measured on profits.

"We measure our success through our people and through their experiences and outcomes. It has been overwhelming," says McQuilten.

But like any business, especially in retail at the moment, it's not always easy.

"We're just toughing it out and trying to be innovative all the time, creating new strategies to get customers in the door," says McQuilten.

Most of the Social Studio's garments are priced between $80 and $200, which can make it difficult to compete.

"People want as cheap as they can, nothing can be too cheap at the moment. But if they find something that's of a beautiful quality and really well made they they are prepared to spend more on it," says McQuilten.

One of the studio's biggest challenges is spreading the message that its clothes aren't just the products of refugees or students - rather they're professionally designed garments that should be appreciated in their own right.

"We really want to be appreciated as a serious fashion label and we want to teach the fashion business that there's other ways of creating design," says McQuilten.

She says people tend "to want to think of refugees as victims".

"But what I've seen is the people that come to Australia through refugee camps, through humanitarian aid programs are actually the most resilient. In a way they are the cream of the crop."

So now it's a case of focusing on promoting the label itself, rather than the other, less popular, type of human label.

"We're very conscious people don't like being identified as a refugee - it's not a label they take with them forever," says McQuilten. "For most people it's an experience they want to leave behind and move on."

Grace McQuilten's five tips for entrepreneurs

1. Value people and appreciate the value of human capital.

2. Take risks and make mistakes.

3. Learn from problems and reflect on criticisms.

4. Respond to change, adapt and be flexible.

5. Have fun, laugh and enjoy what you do.

*For more details, go to thesocialstudio.org.