We understand that finance can seem dull and daunting to the creatives of the world such as you. It’s not the sexy stuff, we get that. But we cannot stress enough how vital it is to your brand’s success. We talk a lot about the do’s but we have not focused on the don’ts of business finances.
So what are some of the don’ts of business finance?
Not creating a budget before you start your fashion business
We keep reiterating how important creating a budget is. This time, we just are just holding a large STOP sign and telling you to start your budget today. No really, right now. You don’t want to sink any further into your business without allocating a certain amount of capital to certain tasks to help grow your business. There are hundreds of things you can spend your money on within your business and you need to choose what is really worth your dollar bills.
As independent designers, you may not yet have a steady paycheck coming from the business. This can create a stressful situation and could leave you feeling like you have to decide between working a career and designing the life you love. We’re here to tell you creating a budget can help alleviate a lot of financial stress. When you know how much money you have and how much you can spend, you can start buying things better suited to your situation and create a stronger, more sustainable fashion business.
Avoiding checking your bank account out of fear of poverty
We’ve all been there—that nerve-wracking moment where you don’t want to view your bank account because you’re scared you may only have $500 in your account. We’re telling you avoiding your bank account will not help, it will just send you into a deeply morbid financial darkness. The more you know about your finances, the better you will feel. If you don’t believe us—just try it. We can guarantee you will feel a weight lifted off your shoulders and that’s the start to a more financially stable business.
Not learning what you can’t afford
Make a list of the things you need to grow your business. Then be honest about what you can afford. OUtsourcing will be an option for some aspects but not others, simply based on budget.
For the things you cannot afford to outsource, use the internet to your advantage. Reading books focused on your weaknesses and on logistics of running a business could be a brand-saver. Remember that reading is the key to where you want to be. There are plenty of books, websites, and articles (AHEM…search the StartUp FASHION blog!) tailored to specific aspects of running a business. We strongly urge you take the time out to research and try to learn about whatever skills you may be lacking, it will save you thousands in the long run.
Depending on your credit card
We are in living in the era of credit. When you can’t afford something you want, it’s easy to reach for the pretty plastic and swipe away. But as business owners, you can’t do that. You have to keep your credit healthy and be able to manage with the money you do have. If you can’t manage $1500 you won’t be able to manager $150,000.
While using a card every now and then is required to build your credit, don’t get laissez-faire with it, which can happen much faster than you think. If you dig yourself in deep credit card debt, you won’t be able to continue running your fashion business and gaining outside capital will be a difficult task when your credit rating proves your inability to handle money. Don’t depend on the plastic but the tangible income you have in your bank account.
As a last note, don’t buy things you can’t afford (aka do not fit within your budget). Sending us right back to our first point; start managing your fashion business finances smarter than before, the first step is just creating a budget. These small avoidances can save you from unstable situations and propel your brand into greater growth.
Image via lanuiop