Hi Guys, Fashion Mythology is back with new content! We made some changes in the last couple months and have decided to focus now exclusively on B2B and industry related content for this blog (this is the kind of stuff our readers seem to prefer anyway). So stay tuned, because from now on we going to release one long-form article per week sharing with you new facts and strategies for your business to improve sales and marketing. This week’s topic is how to start a fashion business effectively in 2017:
1) The Fashion Business Plan
First, you need to write a business plan. It can be a word document, a presentation, a table or a combination of all those formats (hint: make it multimedia). A good fashion business plan consists of several components. You can map out your business and the strategy for the first year in extreme detail, I personally though would recommend to focus on the essentials and stay flexible, since over-analysis and too stringent planning often fails when the reality of costs, schedules, people and resources comes knocking. So in my opinion, the bare essentials are:
Product – What do you want to sell
Supply Chain – Where and how will your product be produced
Logistics – How will your product be shipped to the customer
Geography – Do you want to sell local, national or international (which countries?)
Customers – Who do you want to sell your product to
Pricing – Is your product gonna be mass market, fast fashion, premium or luxury
Points of Sale – Are you gonna sell online, have your own dedicated brick and mortar store or try to place your product in wholesale department stores?
Location – If you’re gonna do retail, where should you open your shop to have enough foot traffic to sustain your business
Finance – You should forecast all the relevant costs for the first year and come up with the 3 basic financial documents (Cash Flow Statement, Balance Sheet, Income Statement) – this is a must do!
Legal – What legal form should your business take. What are the difficult legal areas you need to navigate (things like patents, copyright, health and safety standards etc.)
Your Team – Are you a solo entrepreneur? Or do you have the funds to recruit employees or hire freelancers and agencies
Roles – You should consider who will fill the following roles (at a minimum): CEO, Design, Sourcing/Merchandising, Accounting, Marketing, Public Relations, Operations, Technology, Human Resources, Legal.
Technology – What kind of software or hardware do you need to setup shop and start selling
Workspace – Are you gonna work from home, from your laptop? Are you gonna have a dedicated office space? From a brick and mortar store?
Marketing – How are you gonna advertise in the first year? Who is gonna design or produce your content? Which channels are right for your business – Google, Facebook, Social Media, Apps, Display?
Public Relations – How can you create media buzz for your brand? Press Releases, Magazines, Blogs, Fashion Shows, Trade Shows, Influencers, Celebrities?
2) Your brand
Try to nail down on a single sheet of paper what differentiates your brand from everybody else. Is it your design, your materials? The way you produce or source your items? The specific market niche you want to serve? Is it your personal taste and your life story? Do you have heritage, has your family been involved in fashion for generations? Or maybe it is not the product or the human face of the brand, maybe it is the brand itself (logo, colours, photography, visual merchandising) that is extremely artistic, cool and stands out amongst your competitors.
Whatever it might be, you NEED a differentiator to be successful in the vast worldwide ocean of competitors, because you have to realise, the lower the entry barriers for fashion business become over time, the more saturated the market will be with people trying to sell similar goods on the same premise.
3) Your Vision
Let’s try to dream a bit here. Where do you want to be in 6 months, in 12 months, in 2.5 years and 5 years? What is your end goal, to have a store you can live off comfortably? To retreat from active management at some point and live off the profits? To build your brand into an empire? To go global, maybe sell stock to investors and be publicly listed? You should start thinking about this right now but focus your goal setting mostly on the first 6-24 months.
Your financial statement, your funds and the available time gonna have the most influence on your vision, but nonetheless, you should still inject some passion into your project to motivate yourself, the investors and your team. If you just want to make money and you don’t love clothes, you don’t stand behind your product… chances are your business will fail horribly.
4) The Proper Funds
Let’s be real here, you can’t create a successful business without capital. Anybody who is telling you different is lying to you or is trying to sell you an entrepreneur or marketing course. Even a drop shipping fashion eCommerce store with stock footage branding and cheap 3rd world freelancers running the operations behind the scenes will still require up to 20 000 US$ or so in the first year to funnel into advertising and business building to have a chance of being profitable. Anything less will require lying, stealing and exploitation and you don’t want to start your business with so much bad karma, don’t you? Getting funds is often the most difficult part for a fledgeling entrepreneur (I speak from experience), but there are different options you can explore, the most common being:
- Saving up from your day job
- Asking family and friends for money (careful, don’t ruin your relationships)
- Getting credit from a bank (can be hard if you don’t have a fantastic credit score or well-paid job)
- Searching for a business angel (private investor) or a venture capital firm
- Crowd funding (Indigogo, Kickstarter) – A good idea if your idea is creative or has a humanitarian side
- Raising Bitcoin through the blockchain (to put it in simple terms: Kickstarter with bitcoins)
- Getting a private credit through a credit funding site (careful with the terms and shady individuals here)
- Boons and grants from the government (In some countries your government will support you)
You need to put in the time. But what if you are starting this business with limited funds and you need to keep working at your day job to keep the lights on, then time will be a very limited resource. You will have to work 2-3 hours after you come home each night, work the weekends and use every day of vacation you have available. And there is definitely a limit to how long you can do this before you burn out. Don’t believe those extreme stories of people like Arnold Schwarzenegger, Elon Musk and whoever they are with their 80+ hour workweeks. If you’re a normal person with a dream, you won’t be able to work these hours for long. In my experience with clients and from my personal life the following situations can work out well:
- A high powered job with evening hours and work weekends. Because of your high income, you are able to outsource a lot of work and get things done effectively even though you cannot spend that much time on the business.
- You acquire the proper funds (20 000 US$+ or much more), in addition to that you have enough savings to pay your bills and you can work full-time on the business. You do what you can yourself, for things you are not proficient at, you get the necessary help (quality freelancers or established agencies).
- You are flushed. You either have accumulated some wealth before or you have partners/investors with the proper funds. You have a vision, an idea. So you commission the best people (employees, consultants, freelancers, agencies…) that you can find to help you realise your goals.
Fashion is creative and expressive. The tone of voice and visual identity of your products, your brand and your company culture has to be consistent and strong. You might have ideas but no technical skills (like fashion design, graphic design, writing etc.) so you better get help from the right people if you don’t want to look shabby. Every collection needs to be fresh and new while still retaining the core strengths of your original concept. Only this way you can build brand recognition over time.
This is the reason why big luxury fashion companies exchange creative directors (head designers) every couple years but don’t rebrand completely. To be creative you need to be inspired too. You need to schedule time to look at art, magazines, listen to music, watch movies, read or travel. If your work-life balance doesn’t allow for inspiration and creativity, fashion might not be the right industry for you in the long run.
7) Get going
Once you have written your business plan, acquired the funds, planned out your time and mapped out your brand and vision, it’s time to get going. Buy the software and technology, hire the right people, start working on your designs, commission prototypes, rent shop space and so on. What you start with is not as important as that you get going! Don’t let fear hold you back if you have planned correctly, a strong idea and the necessary financial and human assets to make it work. Some people might need a 1-2-3 kind of “To-Do” list to be able to work effectively, don’t hesitate to write a detailed step-by-step plan if that helps you. But don’t procrastinate!
So this is how you start a fashion business in 2017
So that is our basic primer on how to do it. If you follow these steps you will make a huge leap towards creating a successful fashion business. If you need more help than just a simple how-to article, feel free to visit our website and book a free 30min consultation with us. Also, if you’re serious about making your business venture a success, check out our service pages on luxury marketing and fashion marketing. As professional marketing consultants, we are always there to help serious entrepreneurs accomplish their goals.