Congratulations on being able to get started on your fashion startup thanks to having the funding you need. It’s a very, very exciting place to be, and we’re thrilled to hopefully impact a few of the key decisions in your fashion startup business plan at this really integral time for your company.
The first 18 months are so valuable and so important. In fact, once you move outside of the startup cost phase- sampling, branding, website development… you move into operating costs and the monthly amount it takes to run your business. This can be the most make-or-break time period for you because you have to find your customer in these first 18 months. You have to nail down your fashion startup business plan and make sure that your shipping and logistics are great. You have to make sure your product development, styles, SKUs and everything else is up to standard. This is the time when you’re capturing the customer, driving home great messaging and building a business to last.
Within the first 18 months, it’s likely you’ll be trying lots of different experiments. And after that time period, you’ll say, “Hey, these are the things that worked and this is what didn’t work.”
1. Expect to Spend a Lot More on Marketing Than You Think.
Marketing will be one of your biggest efforts for gaining attention and market share. Be prepared to spend.
2. Be Your Own Sales Rep.
Being your own sales rep will give you a lot of experience so it may not be the best idea to hire an outside group from the start. It’s also the best way to get your on-the-ground, word-of-mouth messaging out there.
3. Never Sacrifice Quality.
When you go into production with the first round, everything is perfect. However, when it comes to delivering product to your customers consistently, time and time again, never sacrifice the quality. Make sure you have all of your desired bells and whistles in every single collection.
4. Pay Others to Do What You Can’t Do Well.
Plan to spend on what you can’t do yourself. This might seem like an easy concept, but there are a lot of fashion startup owners out there that are not hiring people to fill in core competency gaps. None of us are perfect. I personally can’t draw if my life depended on it. And trust me, if I was starting a fashion startup, I wouldn’t sit there trying to sketch and draw if that wasn’t my strong suit. I would likely hire someone within my budget to execute on what I can’t do well.
Sometimes we fail to see that our biggest weaknesses can sometimes be trying to do everything ourselves. When you take the time to find the right people to help you execute various needs, you’ll end up saving money and time. You might be saving a few hundred dollars by doing something yourself, but is that to the detriment of the business or will it add to the business?
Your time is as valuable as money, as is the time and value proposition of everyone else you may be interested in hiring. Make a list of what you’re great at and what you want to be doing within your business, then make sure you allocate resources to hiring other people. Even if it’s something you do okay but you’re not great at it, get the pros on board to do them for you instead. You’ll be so much happier you did.
5. Stick to a Budget and Spend Strategically.
Lastly, stick to a budget. It’s such an important part of any fashion startup business plan. I know it’s so easy when you’re first starting up a business to have a whole line item of expenses. Those fashion startup costs can be costly. They can be expensive. However, when it comes to operating costs, it’s a little different. You’re trying different strategies and working with different approaches. It can feel limiting to have to ascribe numbers to certain activities because they’re experiments. However, an experiment that goes unmonitored, that’s not being pivoted and that doesn’t have some boundaries isn’t an experiment. Experiments have variables. Experiments have structure to see how they perform. If you’re just trying things randomly things without a game plan, you’re not experimenting and it’s not even a strategy. You’re throwing pasta to the wall- which can be fun, but it doesn’t always yield the results you want.
Brands will often say, “Oh, I’m going to just pay for things as I have money and I’m just going to do it ad hoc and whenever I can,” but that’s not strategic. If you have a certain amount of capital for the year, make sure you know what that spending looks like. If you have a certain amount of capital for the first six months – even if you don’t have all of it at once – make sure you know what that looks like.
Know the following:
- Where do you plan on spending the money?
- How do you plan on seeing your intended results?
- How does the way your spending affect your bottom line?
- Are the costs fixed or variable?
- What is the triple ROI of every particular expenditure?
tt can be stressful when you’re thinking about budgets, cash flow, planning and how you need to spend money on the various aspects of your fashion startup business plan. If you need assistance with getting your business off the ground, connections to the right CPAs, the right bookkeepers, knowing what kind of software platforms will be best for your business to launch and grow, et al. send us an email at hello@scalingretail.com. We’ve helped shape many successful businesses from the aspects of financial planning and strategy.
For further reading, visit our blog post on how to determine if you need a retail consultant. We explain the ways in which having a retail strategist by your side can get you to your goals faster, better and stronger than doing it all alone. We’ll also explain how we can create custom strategies for your fashion startup business plan based on your unique positioning, goals and needs. We have a free gift for you as well; download your fashion startup cost planning sheet for a lesson in startup cost planning 101.