Do you feel like you really have a handle on things and that you’re ready to take your fashion business to the next level? Before you develop any growth stage plans, find out if you’re actually ready to scale and seven ways to make it happen!
It seems simple enough- implement new strategies or build out your team and watch the additional revenue pour in. In reality, that can’t be farther from the truth. You have to have a solid, healthy business foundation in place or your brand and bottom line can suffer in a big way.
Your fashion business may be ready for the next level if you’ve been seeing success in all of your current sales channels and you know for a fact that you have a compatible (and profitable) product-market fit. That means you’ve proven your products are wanted by consumers and that there’s a sizable enough market to grow your business (i.e. as opposed to a niche that is too small, certain handcrafted goods…).
It’s also time to think about growth when you need support. Maybe you’re a solopreneur and you’re unable to do more with your sales and because there simply isn’t enough time. This is when you reach the point where doing it all on your own becomes a major obstacle to your success. Maybe you have a small team of 2-3 people but you’re not able to keep up with all of your business’ needs – and forget about outside opportunities!
In both of these scenarios, you’re preventing your business from taking off and you’re actually losing money by not investing in expanding your team. If you can secure the resources and know-how to do it (capacity building, infrastructure, etc.), scale up by hiring a professional team or by taking on a few additional team members. If that isn’t an option for you right now, scale up by hiring outside help from freelance professionals.
Speaking of resources, what are your finances like these days? If you have the cash flow to invest in building out another revenue stream, go for it! But you don’t necessarily need to have tons of cash on hand to be able to grow to scale. You can also scale up with the help of investments from outside investors.
And finally, it may be the right time to scale up if you dream of creating something even bigger than what you’ve already established. So go ahead and chase those dreams (with the proper planning and preparation of course).
7 Ways to Scale Up
1. Expand Your Market Geographically.
Once you’ve reached a certain level of business in your geographical target market, it could be time to move forward into a new region. This can be done through exploring new wholesale accounts in other regions as well as via expanding internationally online. If you do go the digital route, keep in mind that this isn’t as easy as turning on your shopping cart for worldwide shipping. You’ll have to really dive into everything it takes- including regional-specific marketing and advertising, payment types and currencies.
2. Venture into E-Commerce.
After you’ve achieved a strong wholesale business, it’s a good time to start thinking about selling direct-to-consumer online. A successful e-commerce shop of your own means you’ll be able to enjoy your own well of customer data, more precise branding and increased profit margins.
3. Launch Your Wholesale Business.
The same is true the other way around. If your e-commerce business is solidly established, this may be the time to explore potential wholesale accounts. Think strategically, be selective and remember that it’s better to be in the right stores than in the most stores- maintain exclusivity.
4. Open a Retail Store.
Ignore the news reports insisting “retail is dead” because the industry is only transforming for the better. In fact, for the most part, it’s the bigger brands and big box retailers who are suffering most. Why? Because they continue to present more of the same and they lack a sense of “newness”. If you’re ready to open your own store, by all means go for it. Choose from a single brand or multi-brand shop and think outside of the confines of what already exists. We love what Apolis is doing with their NYC shop. They’ve based their brand and entire business model on social enterprise with production in L.A. as well as places as diverse as Uganda and Peru via advocacy projects.
5. Create a Lifestyle Brand.
You can also scale up via product extensions. Look at your business strategically and assess what should come next. Jason Wu just launched an adjacent product line at New York Fashion Week – branded phone chargers, headphones, Moleskine notebooks and Sharpies!
6. Develop a Diffusion Line.
Target another price point for the chance to reach another group of customers.
7. Get Vertically Integrated.
Start to bring elements of your supply chain in-house to gain short-term and long-term benefits such as greater control over your brand and sourcing and producing for less. You can also create a new revenue stream by manufacturing for other brands!
Need help scaling up? Contact us for personalized support for everything from team building and market entry strategy to brand extensions and CEO advice. Schedule a consultation session today. For DIY international growth strategies and support, check out our e-book, Going Global.
Hiring is a major factor when you’re growing your fashion business to scale. Your modest team of a few talented professionals was perfect in your startup days but bigger plans and more initiatives requiring a suite of new responsibilities and skills calls for definite growth when it comes to your most important resource – the people behind your brand. Use these tips to help you make the wisest hiring decisions.
Here’s advice that holds true across the board, as well as specific hiring tips as they pertain to leadership positions and support staff.
First Things First
No matter the position you’re looking to fill, always begin by assessing personality and enthusiasm. Your new hires can’t just be talented. They’re also going to need to have the right personalities to build on the overall synergy of your team. Also, having the skills, experience and personality for the job won’t stand to benefit your brand much if they just don’t have the passion. The initial excitement can quickly wear off and you’ll find yourself trying to find new ways to motivate them or they may not waste much time before simply moving on.
Take a look at your potential hire’s background. The retail industry is huge but not all of its categories are easily transferrable. For example, a potential hire who has acted as social media manager for a tire company has had a totally different experience than someone who has done the same job for the fashion industry. Look for candidates with experience in your sector, with the exception of roles that aren’t sector dependent – such an executive assistant.
Finally, be sure to include a non-compete clause in the contract of every one of your employees. This prevents people from getting your secrets and then running away to apply them at the firms of your competition.
Welcoming New Support Staff to Your Team
While it’s tempting to mine personal contacts, here’s a big caution: don’t hire your friends as employees. Unless you feel comfortable telling them what to do and they’ll feel comfortable taking your instructions, these types of arrangements can quickly go sour.
When it comes to office positions, it’s best to hire seasoned professionals. If not, you’ll need to train on everything from communication to software which can be an expensive and time-consuming process. You also don’t know how much time it will take for them to get used to all of their new responsibilities.
Finally, don’t discriminate against people who may have too much experience based on only reviewing their resumes. These days, people go through multiple careers and they’re a lot more open to big life changes. If a candidate fits the bill and has a great personality, why not? Most of these potential hires tend to be independent contractors so just be careful that you aren’t breaking any labor laws. If you need them to work in a fixed environment for a fixed amount of time, it may legally be time to transition them into salaries.
Leadership Hiring Practices
For leadership positions, look for people who have experience doing the same exact role at another company. Don’t hire anyone who simply “thinks” they have what it takes and don’t get too impressed by resumes from big corporate backgrounds. Corporate candidates are used to working with bigger teams and bigger budgets so their experience tends to be worlds away from what you have to offer – unless they were part of a startup or incubator at the firm or somewhere else. Leadership positions will usually account for your very first salary hires so be extra careful about your contracts and HR procedures.
Before You Make the Hire
Now that you’re ready to hire top talent, make sure you have all of your on-boarding materials in place. Take some time to figure out what benefits you can offer generously to employees. Maybe you can’t afford dental and health but you can afford a one week paid vacation, a clothing stipend or a matching 401k. Next, get a comprehensive payroll system (such as Gusto) and have everything set for smooth accounts payable/receivable. Be sure you can pay everyone on time while also being able to follow up on receivables with ease.
You don’t have to scale up on your own. At Scaling Retail, we help businesses grow with a comprehensive array of custom services including capacity building, rebranding, wholesale sales strategy and product extensions. Email firstname.lastname@example.org to schedule a consultation session today.