CEO Advice Fashion Startup

Startup Capital: How Much Do You Need and When?

When creating a new business, understanding how much capital you need is one of the most important aspects to starting up. Before you know the actual dollar amount that will be needed, you should understand your leverage. What can you bring to the table in your business and what will you need to hire other people to do for you? Do you have friends or acquaintances from other companies who might be able to give you deals or points of leverage? Keep these questions in mind when you start to raise funds for your startup capital. 

Starting Within

First-time CEOS of a company are often unconsciously incompetent of many factors because they are still learning the basics and learning how to implement them—which is OK! They then become consciously incompetent because you can now acknowledge that you don’t know how to do many of the things you are learning about and must now hire people who understand more than you. Trust others. You cannot master everything on your own, and knowing what you can bring to the table well then filling in the holes around you with people who can support you is a key to success. This may be costly depending on who you work with, but do not cut corners! It will end up costing you more in the long run. Finding people to help you with all this will be beneficial, so don’t be afraid of hiring a consultant.

Breaking It Up

Startup capital is often separated into two separate funds: pre-launch and post-launch. Ideally, you would have enough startup capital to fund 12 months of pre-launch and 12-18 months of post-launch production. Pre-launch typically includes keeping in mind development and design costs, which are often overlooked, and post-launch focuses on continued brand development and operational costs.


  • Cost of goods: product type, product assortment, number of units, what and where you’re producing
  • Tech packs & illustrations
  • Brand Development
    • Full study of customer base
    • Where does the company fit within that market?
    • Mission, values, and brand DNA
    • Logo development that fits specific market demographic
    • Communication and market strategy—How will you speak to the customer base?
    • First photo shoot (amongst others), website development, and copy writing

Post-Launch/Operating Costs

  • Marketing—Grow your business!
    • PR
    • Advertising
    • Organic Social Media
    • Multiple photoshoots
    • SEO
    • Paid collaborations with influencers or affiliate marketing
  • Product Development
    • Production, shipping and logistics, packaging, in-house customer service representative or team
    • Ongoing merchandising costs. Plan for years out! Ask yourself: what can you afford for your first and subsequent collections? Don’t have a big first release then continue with small collections just because you ran out of money early on
  • Accounting, legal team/lawyer, office space, and other indefinite costs

Planning Ahead

While many aspects of business are not expected during pre-launch, take them into consideration when figuring out overall gross margin planning as the costs will occur eventually. Starting a business usually doesn’t happen overnight, and a lot of work goes into it. Having a team that you trust is very important, so take a look at the lists above and see where you may need to hire out to truly succeed.

At Scaling Retail, we’ve helped launch and scale fashion retail businesses all over the world. Questions about building, launching, or growing your fashion business? Send an email to for a complimentary consultation.