It is an understatement to declare how much finance is undervalued in the world of emerging and independent designers. It’s safe to say that sometimes the word “finance” instills actual fear. However, we want to clear the air (and let you breathe again). There is no reason to be nervous about finance or be intimidated by taking on your own finances.
It may seem like a deep, dark, depressing path but finance will only shed light onto your business and future endeavors.
Many successful brands, such as Marc Jacobs, have their creative vision down pat, but many people fail to know that his partner was an excellent business man. Combined, they created a world-famous, highly successful fashion brand.
Whether a fashion empire is your goal or not, it is important to note that the business of fashion is highly influenced by the intellect in finance. No reason to be nervous—you’re growing your fashion business which should be just as exciting as curating your next show or photo shoot.
When first tackling your finances, remember that this is your first glimpse into the health of your business. And you will only need to do this for the first time…once.
After your initial financial screening of your brand, you can simply build on it and adjust your plans and spending according to your situation. After going through your financial situation and examining what your brand can/cannot afford, it will feel as if a weight has been lifted off your shoulders and that you can finally get back on the clear yellow brick road to your success.
If you’re lucky enough to have comfortable finances, you can hire an accountant. An accountant will not do ALL the work for you (shucks, right?) but they will get you on the right track and help you organize your accounts, bills, payroll, and budgeting.
The second hardest part when it comes to finance is sticking within your budget. An accountant can also ensure you are recording your finances correctly, give you advice on how to proceed when making future financial decisions, and evaluate the health of your fashion business.
Another thing to note when taking on your finance is that there are plenty of tools around to help you out. If you haven’t checked out ‘5 Financial Tools That Make Running Your Business a Breeze,’ we highly recommend it. There are programs such as Excel, QuickBooks, Expensify, Mint, etc that simplify the complex math for you and give you results that are tailored to your specific brand.
In the age of technology and an overload of information, there is no reason to be nervous about taking on finance. You can learn everything through online tools and when using those programs becomes too cumbersome, there’s always YouTube.
Lastly, if you want to take out a loan or approach any investors, their biggest concern will be your purpose for the money and how much you expect make back from their initial investment. Investors are weighing out their risk and return and without a solid financial plan, it is almost impossible to determine that.
Now even if you are not looking to pursue the investors’ route, as your brand grows, how you allocate and handle your finances will become increasingly transparent and it will either help your business or hurt it. Think about it this way: if you can’t handle $500 dollars you won’t be able to handle $50,000. Be smart with your finances from the very beginning.
Finance is the lifeline of your business, you may be able to ignore it for a certain amount of time, but it can be detrimental to the growth of your fashion business—even if it doesn’t seem like it.
It is imperative to keep your personal and business finances separate so you can get a clear look at how your business is doing versus how you as an individual is financially striving. This article is to clarify that finance is not scary and there are so many different approached to get yours in order.
Between the plethora of online resources, financial programs, the option to hire help, and of course the StartUp FASHION Community offering tools and templates for independent use—finance shouldn’t be intimidating but rather empowering.