Fashion startups! This business is tough but it’s even more difficult if you don’t take the time to master the basics of retail. How well do you understand your fashion business? There’s a lot more required for retail success than having beautiful products, inspiring photography, and a creative brand voice. These are all important considerations but you have to take charge and be just as effective with the business side as you are when it comes to design.
Here’s a couple of lessons based on some of the retail essentials you’ll explore in the program: Cash Flow, Competitors, Customers, Wholesale, and CEO Advice.
A lot of you are probably coming from strictly creative backgrounds so cash flow management can be especially intimidating. Don’t stress out, you can still become a cash flow pro. You just have to understand the essentials – why you need to know it, how it works, and how you can use the insights you gain in the process.
For the newest startups, cash flow is particularly complex. Why? You don’t have any sales history to reference. You need to project your expected future expenses for the next 3 years… project too high and you may think funding is out of reach, project too low and you could face lots of future unexpected costs.
As you project your future expenses, the most important costs to include are professional fees (lawyer, accountant, etc.), office space expenses (rent, office supplies, printing costs…), product samples, professional photography, and digital marketing campaigns.
How you plan your finances depends on a lot of different factors like the number of collections you’ll produce each year and the type of resources you can score for free!
You wouldn’t believe how many brands say “I have no competition”. That’s never true! Your customers (individual shoppers and wholesale buyers alike) have plenty of options of where to spend their money so even brands with the most unique designs still have competitors. Build a competitive matrix to understand what options your customers are choosing from and how your brand fares sitting next to the competition.
There’s a lot you can do with your Competitive Matrix including… indexing pricing, identifying potential wholesale accounts, gaining website and branding cues, gleaning copywriting inspiration, and deciding how many styles/SKUs to produce.
You have to be able to accurately identify your customer in order to get the right marketing and sales strategies in place as well as to develop your product assortment in a direction that makes sense. Those outdated, generalized customer profiles don’t work because they’re way too broad to be useful. It’s time to get specific.
As a startup with no sales history, you can look to your direct competition for answers.
Where are their products sold? Where are they getting press? Who follows them on Instagram?
Instead of a customer profile that looks like this…
25-30 years of age
Lives in Urban Area
…it will be much more precise (and useful) like this…
Reads Porter Magazine, shops at Barneys New York, follows celebrity architects on IG, follows brands like The Row, Sophie Buhai, and Jil Sander on IG.
Your research should also leave you with key insights like additional competitors you may not have discovered before, magazines, blogs, and influencers relevant to your target customers, and potential shops to approach for wholesale business.
Use this formula for wholesale success: Product + Pricing + Persistency + Proof.
Product: Create your product perfectly – read: based on your audience.
Price: Use competitive pricing.
Persistency: Be strong. You need a thick skin to navigate the rejection-filled world of wholesale pitching. And always remember that no doesn’t mean no. It means not right now. Be persistent. Keep emailing, calling, and sending out those postcards.
Proof: Build social proof. Instagram should be your #1 channel as a fashion startup. Post 3x a day and maintain a balance of lifestyle, brand, and product images. Actively engage with your audiences! Buyers want to see that you have a market for your brand.
Even if you have 0 management experience, as the founder of your fashion brand, you are the CEO. It can feel strange to think of yourself as the top executive in charge but that’s exactly who you are.
The future success of your business relies on your ability to manage yourself and others with confidence, smart decisions, organization, and strategic delegation. Yes, even if you only work with 1, 2, or 3 other people, these are all crucial skills – planning, goal setting, negotiation, scheduling, and adopting the right tools.
As a fellow CEO, I know how it goes. I also love what I do and I’ve been guilty of working around the clock from time to time. The truth is, balance is important for your health and the health of your company. The CEO needs to be well-rested, healthy, and sharp to continue to make the right moves. You need to commit to a 30 minute lunch break and even a time to call it quits for the day. If not, things can really get out of hand!
Gain valuable support and guidance for every one of these aspects of your fashion business. Contact Scaling Retail for a consultation session today at firstname.lastname@example.org.