But before you jump into the business with all that adrenaline rush, you need to start with a plan first. And a good one at that.
Business planning involves putting your ideas down and really defining what your company is all about. It gives you focus on the direction you want to go.
There are many things you need to cover when starting your own fashion business.
Some of the things you have to do include:
1) Determining your marketing strategies and distribution strategy
2) Analyzing your competitors
3) Compiling your start-up and succeeding costs (particularly in the first three years)
4) Planning to grow and expand your business.
These may seem overwhelming at first glance but there are many online resources and also fantastic local Winnipeg resources that can help you write your plan.
Entrepreneurship Manitoba – 240 Graham Avenue Winnipeg, MB phone: 204-480-8481
Women’s Enterprise Centre of Manitoba– 207 Donald Street 204-988-1860
Creating your business plan
We will keep this simple and focus on four main parts:
1) A description of your business
2) Your marketing plan
3) Your financial management plan
4) Management plan
Description of Your Business
It is what it is. You need a description of the fashion business you plan to launch. The key is to emphasize what makes your business unique and special. Your goal is to make everyone who reads your business plan share your vision and know that you are creating something extraordinary.
Stakeholders need to see that you have a plan for operating, producing, and selling your product or service.
Some of the things you can detail in your business description include:
● Nature of your business (i.e. product-based, service-based, or a little of both)
● Your USP or Unique Selling Point (i.e. the product/service that you offer that will have clients and customers beating down your doors)
● Clearly defined goals and objectives backed by knowledge and expertise you have acquired
● Explanation of why your business will be profitable and how your fashion house will be different than the others in Winnipeg
● Reason for starting the business and what you intend to accomplish with it
● Types of clothing you’ll be designing
● Resources to be used (supplies and equipment)
● Clothing production process
● Number of employees (current and future plans)
● System in managing finances and margins (i.e. hiring an accountant/bookkeeper)
● Technical assistance required for construction and sourcing of your goods
● Business hours
How well you market your business will determine how successful your business will be. Your marketing plan will define your market backed by accurate facts and show how much you know your customers.
In here, you will map out your market analysis (the assessment of the existing market for your designs) and market strategy (the methods you will use to spread the word about your business).
Market analysis allows the readers of your business plan to understand your industry. You must describe the fashion industry keeping in mind that the reader may not know anything about it. The information you will present here should be precise, up-to-date, and relevant. It should also include the following:
● Description of your target market
● Factors your customer considers when making purchases
● Benefits that customers get using your product/service over others
● Industry trends (including future predictions)
A market strategy will explain how you will promote and advertise your business. It has to explain clearly how your company will fit in the fashion industry.
Other key points you should include are:
1) Competitor description and your competitive position
2) Pricing scheme (in comparison with your competitors)
3) Promotional plan and strategy (including ads, social media, trade shows, etc.)
4) Distribution strategy (where your products can be bought, how it will be distributed, and where customer service will be provided)
Financial Management Plan
Developing a good financial management plan will help sustain the funding of your business needs. A good cash flow is necessary to keep your business running and thriving despite unpredictable marketing conditions.
Having said that, if numbers isn’t your strength then it would be best to work with an accountant to help you develop a feasible and sustainable financial plan. There are many accountants and bookkeepers who do contract work here in Winnipeg.
Investors need to know four things from you:
1) Startup cost estimate – sum of all your expenses before your business opens. You might want to use the worksheet available on our website here.
2) Revenue projection – anticipated sales estimate within a specific duration (i.e. weekly, monthly, quarterly, yearly). The best method here is to work backwards. Think about the year, then the quarter (fashion is extremely seasonal), the month, and then the week.
3) Break-even analysis – a projection as to when your expenses will match your income and when it will be profitable
4) Income statement – a report that details your company’s profit and loss statement over a certain period that is realistic to your business
Aside from these, you also need to find an accounting software that you will use such as QuickBooks and other similar programs. Make sure that you work closely with your accountant to help you understand the financial side of the business. Keep your targets top of mind, and review often.
The people you choose to work with will have a huge impact in your business. Hiring the right people is vital to the success of your business. They will represent your brand and everything you stand for. The fashion industry requires exceptional people. People who know how to make things happen, quickly and efficiently. If you miss a deadline by a day, or don’t have a plan B, your entire collection can flop. You need to hire people who truly understand the word “Hustle”.
Some stakeholders invest more on the people than the business. They want to know the team behind your company so it’s important that you get people who are also knowledgeable about the business, particularly the (unique) fashion industry.
Your management plan should cover the following areas:
1) Professional credentials – your experience and expertise in the fashion industry
2) Management team – who they are and what their role will be
3) Business partners – who your investors and consultants are
4) Employee relations duties – for you and your team
5) Hiring plans – current and future
6) Business operations overview
7) Labour and workplace safety issues and policies
After you have completed all of these, you can now prepare your Executive Summary. This is probably the most important document you will ever make because it is the concise version of all the reports in your business plan. It is the first and probably the last thing your stakeholder will read.
In making an Executive Summary, you need to remember three things:
1) Be mindful of the length – short and sweet so to speak (maximum of two pages)
2) Highlight the important parts of your business plan – incite interest
3) Mention your future plans for the company – short and long-term goals
Once you’re done with the Executive Summary, prepare your cover sheet (business name and contact details), table of contents, and a statement of purpose (mission and vision).
Do not forget to include other supporting documents such as:
● Tax returns
● Personal financial statement
● Purchase/lease agreement of office or store space
● Design portfolio
You can download business planning articles and tools at the Canada Business Services Centre here.