As the 2013 kicks in, and the A/W 13 selling season is about to start, I though it would be timely if our first blog for the New Year focused on an important business focused New Year resolution.
If you are thinking of starting up a new fashion related business or are running a business without a clear strategy in place, I'd like to suggest your resolution is
‘I'll make a start on my business plan’
This topic is something I cover in my book Design Create Sell – a guide to starting and running a successful fashion business, and one of the most requested subjects I am asked to talk about at speaking engagements.
So why do you need a business plan?
Most budding entrepreneurs have heard of a business plan, however many think it’s something you only need if you are approaching banks for a loan or are looking for investment. Whilst this is true, your business plan is also your personal roadmap, as it will be central to your business development; outlining your goals, visions and objectives. As time goes on, you will use it to measure your actual progress against your projections.
‘Failing to plan if planning to fail’
I can’t stress how important it is to have a strategy in place and to start a business plan at the beginning of your business journey. It is essential for any enterprise, but the diversity of product and customers in the fashion industry means to have a chance of success you must be able identify where your product/idea sits within the overall marketplace. A business plan will help you think this through.
If you are a creative person this could take you out of your comfort zone but it doesn't have to be tackled all at once – most plans take a few weeks, or even months, to build. As you go through the process you will undoubtedly come across some problems you hadn't thought of – by planning in advance you have the opportunity to think of solutions.
Much of the information going into the plan will be in your head so it’s a matter of articulating your thoughts and putting them down on paper to start with and as it will take some time to pull together, the sooner you start, the better.
Tips on Writing a Business Plan
Start by dividing your plan into the sections below and try and answer the following points within each section. (There isn't a hard and fast rule as to how long a business plan should be, but you should aim for one to two pages for each section.)
- Although this sits at the beginning of your plan, it’s usually something you do at the end, once the rest of your plan is more or less finished. It should be no longer than two pages, with just a couple of sentences summarising each section of your plan, as the finer details will be in the main body.
- An overview of the market segment you are moving in to
- The legal status of your business
- Describe your business – what are you going to design or make?
- Mission statement – in one or two sentences, state your personal vision for the business.
- Who is your target market?
- Are you filling a gap in the market, or have you found a solution to a problem?
- What about your designs and/or concept is it different to those already in the market? In other words, what is your Unique Selling Point (USP)?
- What is the size of the market like that you are going in to? Is it a growing market?
- Who are your competitors? What is your competitive advantage?
- Have you identified a clear niche?
- Is your brand identity easy to distinguish?
- How will you get wholesale buyers or retail customers to find out about you
- How will you build brand awareness and attract press coverage?
- What is your background and your role in the business?
- Is there anyone else involved in the business, and if so what are their roles?
- Do you have any other support structures that can help such as a business mentor, accountant, etc.?
- What additional staff or expertise may you need to operate successfully?
- Where will you run your business from?
- Are you going to need to invest in any special equipment?
- How and where will you get your product made?
- Can it be produced at a competitive price point, suitable for your target market?
- Where will you source your raw materials from, e.g. materials, trimmings, fittings?
- How much money will you need to get started? Think about how much your sample collection will cost to produce, include fixed overheads and ongoing costs. If you’re projecting sales orders at a certain level, how much finance will you need to produce your orders? You will need to include profit and loss projections and a cash flow forecast.
- Can you obtain this money, either from friends, family, savings, bank, or any other options?
- This stands for Strengths, Weaknesses, Opportunities and Threats and is a useful exercise to self-analyse your business.
The key when approaching anyone you want to borrow from is to make sure that your business plan is credible. The financial section is absolutely critical to your plan as it will identify your projections for how the business will grow - in terms of both profits and income - and what financing you will need to make that happen. More information on finance is covered in Chapter 10 of the Design Create Sell book.
Remember - This is not a static document; it needs to be amended as your business develops and changes so worth reviewing at least every three months or so.
You can also get help creating your own business plan by booking a place at our next workshop ‘Fashion Business Planning’ on 22nd January. This practical session will guide you through the business planning process and how to go about the research needed.
One thing I can promise you – once you have a plan in place you’ll have a great sense of achievement and find it much easier to be focus on your business goals.
Good luck and let me know how you get on!
By Alison Lewy