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Clothing and Fashion Business Plan (How To Write?)

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What connects Fifth Avenue fashion houses and basement designers? They had business plans before making dresses and hiring app developers. You can launch a fashion line. You want to start a revolutionary company. Plan first.

Hillary France, founder, and CEO of Brand Assembly, advises emerging designers to put their business plans first. A plan clarifies what, how, and to whom you’re selling, establishes your uniqueness, identifies your competitors, and, most importantly, proves you can make money for fashion startups with limited resources.

Also You Can Read: Startup Business Model

Market research

Writing a business plan can overwhelm creatives. Business courses, market research, and competitive analysis are available. The FIT Design Entrepreneurs annual program accepts 25 New York-based fashion executives. Euromonitor and NPD publish market trends and growth reports. Excerpts are available, but these cost over $1,000.

Sutian Dong, a Female Founders Fund partner invested in Rent The Runway and Eloquii, recommends reading Fred Wilson and Brad Feld’s business plan blogs. These offer advice and show how successful investors think.

Not all research can be done online. “It’s about doing the legwork,” says Kitri founder Haeni Kim. Kim believed she could be a “bridge between high street and contemporary,” so she visited brick-and-mortar stores to gather data and sales associate experiences. Kaelen Haworth, the designer behind direct-to-consumer womenswear brand Second Sight, cold-emailed successful designers for advice and found them willing to help.

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Use family and friends

Remember that everyone wears fashion when fundraising. Kim used Survey Monkey to gather consumer insights from friends and family.

That also applies to plugging numbers into a business plan. Haworth suggests hiring a friendly MBA student to create financial spreadsheets for free or for a small fee. “I’m much more visual, so for me to plug in a number—like, ‘I make 25 of this, what happens to my potential for profit?’—is hugely helpful,” she says.

But fashion is a visual business so the plan could lead to a prettier, summarized “pitch deck” to present to investors when seeking funding. Advisory board members can use their experience to evaluate a design vision using the pitch deck. Jeanette Nostra, executive-in-residence at FIT’s Design Entrepreneurs program, suggests forming an advisory board with designer mentors, past professors, friends, and contacts in law and finance.

It takes time. Kim and Haworth estimate that preparing their numbers and business plans took a year before launching their brands. This organic template should fit your business.

Executive summary

This section includes your “elevator pitch” and mission statement. Summarize and differentiate your brand. Summarize your target market, revenue goals, and timeline. After running all numbers, write the executive summary. Two paragraphs are enough.

Company Overview

A brand’s founders’ education, past jobs, and unique skills are displayed here. Include your location-based business entity and any relevant partners. Specify your product and manufacturing process. Include order fulfillment frequency and distribution and sales methods. List your biggest concerns.

Market study

Show off your market research by identifying and detailing your market’s opportunity, size, competitors, and target customers.

Factory operations

Identify and cost your line’s manufacturers and suppliers. Include sample costs and currency fluctuations if suppliers and manufacturers are overseas.

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Distribution and marketing

Outline the launch timeline, marketing strategy, and sales channels (wholesale, department stores, boutiques, direct-to-consumer). Explain the relationship and costs of hiring a showroom or distributor. How will the brand grow?

Financials

The income statement, calculated in Excel, Quickbooks, or another program, summarizes your revenues, expenses, profits, and losses over a period. Present a three-year sales projection to show annual growth and a cash flow statement to assess future funding needs. Finally, include a startup cost sheet.

A visual, step-by-step guide to starting and growing a fashion label.

Blue Ocean Strategy: W. Chan Kim and Renée A. Mauborgne. Instead of fighting competitors, the authors suggest finding new growth opportunities.

By Vineet Nayar: Rokh designer Rok Hwang calls this book “essential” for understanding business management as a creative.

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