7 Secrets to Starting a Financially Fit Fashion Business
Fabric, manufacturing, social media, photo shoots, QuickBooks, showroom charges, prototypes, shipping rates—our heads are spinning too. There is so much that goes into creating a fashion brand that it can get overwhelming and most important, expensive. When launching your fashion brand, you will want the crème de la crème when it comes to all facets of your business—but that can put you in a very financially unstable position.
Here are some secrets on how to start a financially healthy fashion brand:
Double and Triple Check your Personal Assets
As the founder of your own business you will most likely be putting up most of the financing. This financing will come directly from your savings and personal assets. You want to be positive in the accuracy of the total worth of your assets. From evaluating your personal savings, current debts, and any possessions you may be willing to sell to invest in your brand; you can now research various avenues to gain more financing.
Cash is King
The more cash you have on hand the better for the financial health of your business as well as yourself. Cash is most accessible and safest form of an asset. To be on the safe side, you want to have at least six month cash cushion of living expenses set aside from the money you are using for your business. This cushion can become a life saver in case of any emergencies or disasters in both your personal life and business.
Get Rid of your Debt
The smartest time to launch your brand is when you have paid down all your debt. Whether you like it or not, you will be taking on debt (or cutting some major costs) when you create and grow your fashion business. To keep yourself financially healthy, you should make sure there isn’t any additional debt that could hinder your business growth. To help get rid of your debt you can try to negotiate lower interest rates with your creditors and make sure use additional income such as bonuses and tax refunds to pay them off.
Tap into your Inner Circle
Your biggest supporters during your business journey are most likely your close family and friends. If you think it’s appropriate, approach them with the idea that this is an investment opportunity. It would be helpful to have a business plan and financial plan to show them how you plan on handling their money.
Create a Financial Plan
Drawing up a financial plan before you start your brand can be fundamental to a financially healthy business. This plan will obviously not be completely accurate but it is helpful to get quotes from fabric producers, manufacturers, website designers, etc. You can tally up the total amount you will need to launch your brand, in the way you want it to be launched. This can give you time to save up money, find a loan, or just prepare for financial security in the long-term.
Apply for a Small Business Loan
Securing a small business loan can help you get a hand on some much-needed cash to launch the business you want. These loans are typically backed by the U.S. Small Business Administration and have a couple of qualifications. Some of which are that you must be a for-profit and do business within the United States, and you must be putting equity into your business. We can’t get into all the logistics but it is definitely something worth researching. The only downside is that you have to be rejected from your local bank in order for the SBA to be guaranteed.
Get Yourself Out There
If there’s a time to stay silent—now is not the time. Get out there and network, meet industry professionals, fellow designers, manufactures, and others involved in the fashion industry. Networking is going to be more important than it ever was before. Getting your products out there and meeting others can result in more sales and greater brand awareness. It’s time to send some emails and make some phone calls; there’s nothing wrong with letting people know about your brand.