9.1 Introduction
In the previous module, you created your garment tech pack and walked through the production process. Now that you have successfully produced your fashion designs, you should begin expanding your career options in the industry. The fashion industry is broad, and you have a wide variety of career opportunities available to you.
However, most designers who are new to the field start out with some interest in seeing their unique collections hit the runways. In this module, you will learn the next steps you should take to take to finance your clothing label. You will also learn how to create a business plan, which will be a useful tool for you to use throughout the course of your career. This module will also talk about owning a business in the United Kingdom and how to market your designs. As you move through this course, you will gain the skills you will need to break into this
industry and create your own destiny.
9.2 Developing a Business Plan
Whether you are going to start your own clothing label or open a small speciality boutique, the first step you need to take is writing your business plan. A business plan is a roadmap for your business success and will help guide the way for the goals that you have for yourself and your company.
Your business plan is going to contain information on your fashion label or company, the competitive landscape, your industry, marketing information, distribution, management, and financial information. Every successful business owner has one of these, including all the famous designers that you look up to, so you should know and understand exactly how to craft one.
Draft a Summary
The first step when developing your business plan is your executive summary. This is a description of your company and its goals. This section should be as accurate as possible since this is usually the first item that banks will see.
For example
In this section, you could address any items that you plan on designing. Although you want to be specific in this section, you should also keep it general enough to encourage your reader to read more. So, don't give away your entire plan in the first section.
Discuss Specifics
Since the fashion industry is so broad, you should get very detailed at some point in your business plan. If you specialise in a certain type of apparel, such as children's wear, athletic wear, or you intend to focus on jewellery, it is important to note that in your plan. Another thing that you should note are production details like haute couture or mass production preference. If your designs are unique or you have a specific niche market, you should address what it is that makes you stand out amongst the competition.
Research the Fashion Market
Throughout the course, you have learned about the importance of researching the fashion industry to predict fashion cycles. So, it should come as no surprise that when you are drafting your business plan, you should do a considerable amount of research to determine information about your target market, demographics, and market research.
Develop a Marketing Plan
Fashion designers have several different marketing techniques that they employ to advertise their brands.When you are drafting your business plan, you will need to include how you plan on marketing your own designs. You can include plans for social media advertising, fashion shows, or product sampling.
Outline your Organisational Structure
A business's organisational structure refers to the employees and the chain of command. It also covers hiring, recruitment, and compensation projections. When you are planning this section, keep in mind that designers need artists, tailors, graphic designers, models, and fashion consultants.
Draft a Cost Analysis
Your cost analysis will include the amount of money that you will need to start your label. This could include several factors like purchasing supplies, employee salaries, materials, manufacturing, fashion mock-ups, and photography.
Activity 1
Estimated Time: 25-30 minutes
Having a business plan is a great tool to guide you throughout every phase of your new career.
Practise creating your own business plan.
Begin with a basic executive statement. Depending on what you want to do in fashion this may or may not be an easy task. Try your best to create a plan that summarises where you are at right now with your fashion design goals.
Where would you like to see your career go?
Use the steps above to create a plan that matches the fashion label or business that you have in mind for yourself.
9.3 Owning a Business in the United Kingdom
If you want to start a clothing line or open a small business in the United Kingdom, there are some things that you need to know. Before you set up shop, you should do your due diligence to find out if you need to register your business before you begin selling clothing under a label. Depending on the type of business you are and where you choose to work, you may need to register with the government. To help you along the way, here are some guidelines for opening a business in the UK.
Business Registry
Most businesses will register as a limited company, partnership, or sole trader. A sole trader is simple to set up, but it means you are personally responsible for business debts and hold accounting responsibilities. If you opt for a limited company, the company finances are separate from your personal finances, but you have more reporting and management responsibilities. Finally, with a partnership, two or more business owners share responsibilities for business debts and accounting responsibilities.
Business Insurance
If you are going to own a business, then owning business insurance is a great way to protect yourself and your company against unexpected expenses. Although that is elective, there are some types of business insurance that are required by law.
For example
If you are an employer you are legally required to carry liability insurance, which will cover the costs of compensating injured or ill employees on the job. Also, if your business owns company vehicles, it is your responsibility to hold motor insurance. You also can choose from the following optional insurance options:
Commercial property insurance - This covers the cost of rebuilding or repairing business repairs.
Liability insurance - Covers the cost of compensation claims following any negligence made against you.
There are also specific rules that you must follow if you sell goods online, run your business from home, or buy and sell goods overseas. To be sure, you should always check with the business rules and regulations before conducting business.
9.4 How to Start a Clothing Label
The fashion industry is competitive, so if you have decided you want to create your label and launch your clothing line, there are some start-up steps that you should take into consideration. The first thing to remember is that starting a clothing brand takes a considerable amount of time and money to succeed. So, ensure that you are ready for hard work, commitment, and a considerable investment from the beginning. Once you have committed to your start up, the following steps will help you create your label.
Come up with a 'Must Have Item'
One great way to develop a label and get your brand up and running quickly is to develop a 'must have' item. There have been several fashion designers who have done this.
For example
Diane von Furstenberg - with her signature wrap dress.
Develop the Design
After you have the must have item or unique idea in mind, sketch out the idea and begin developing your design.
Make a Prototype
If you want to develop a brand, you will need a prototype of your designs to show potential buyers. Keep in mind that these are not cheap, but it is necessary to your final goal.
Organise Your Business
An important step that you shouldn't overlook is that your business is an entity of its own, which means you need to establish it legally. You should also make important decisions regarding taxes, lawyers, and legal names. Like many retail businesses, fashion is not heavily regulated, which means you don't need a certificate or license to sell clothing. With this unregulated environment, many designers can fall into the trap of not taking the business end of their line seriously. Whenever possible, it is important to remain organised with your brand.
Establish a Pricing Model
In order for your business to be successful, you need to make a profit and to ensure that profit margin, the designer has to establish retail and wholesale rates are higher than expenses. A base would be to earn a profit of 30-50% greater than your expenses.
Fund Your Business
You have quite a few options available to you for financing, including banks, investors, loans and credit cards. The business plan you create will be the blueprint that you bring with you as a guide.
Sell
If at first you fail, open a small store or an e-commerce site and get your name out there and eventually, your label will get picked up.
Fact
You should expect to spend from £1,000 to £4,000 in the βirst year to get a basic clothing line off the ground in the UK, if starting your own.
Source: Startups.co.uk
9.5 Financing Your Clothing Label
One of the advantages to starting your label is that you can start modestly because your largest overhead will be the actual clothing. If you choose to purchase your own clothing, you will need to locate designers who will sell to you at wholesale prices. If you are designing your own clothing, you can purchase basic clothing to get you started and invest in more professional manufacturing equipment later.
Remember, once demand picks up, and you have the capital, you can grow your stock. The type of equipment that you will need will depend on what you are deciding to make.
For example
If you are designing dresses, you would require some material and a sewing machine. In addition to cost production, you will spend money on marketing costs, and trade shows.
Start-up Loans
The amount of money that you will need to start your label depends on your business needs and your goals. However, you do have some options available to you as a start-up business. In the UK, you can apply for a start-up loan of £500 to £25,000; these loans are for people who are interested in starting or expanding a business in Scotland, England, Wales, and Northern Ireland.
If you are interested in applying for a loan, there are a few requirements that you must meet:
You must be a resident of the United Kingdom
You must be 18 years of age or older
You must start, plan to start, or currently have, a UK-based business, which hasn't been trading for a period of 24 months
Not currently bankrupt or on a debt relief order
You cannot have an outstanding trust deed or individual voluntary arrangement (IVA)
Not currently be on a debt arrangement scheme or debt management programme
Grants
Start-up businesses prefer to apply for grants because they usually do not require payback. However, the number of subsidies offered by the UK government is limited. If you are interested in applying for a grant for your fashion line, organisations want entrepreneurs to see that your plans for the future are detailed, fail-proof, and serious.
Crowdfunding
Crowdfunding websites allow members to pool their resources and investing as little as £10 each in start-ups.
Business Loan
A traditional business loan from a bank is still a popular route for many βirst-time business owners, and it offers you the ability to retain equity in your business.
9.6 Marketing Your Clothing Line
Fashion is a very competitive industry and talent is always available, so having a well-executed marketing plan for your brand is the best way to separate yourself from the rest. While there are many different marketing methods available, the 'Four P' method is the best place to begin. The four P's stand for product, place, price, and promotion.
Product
The key to a good marketing strategy is having a great product. After all, what is marketing without a product? Product is defined as a service or an item that meets a customer demand or need. In fashion you are designing a product that people don't know they want or need yet, and you're using marketing strategies to make them desire it.
Since this is a backwards technique, it is important to employ methods that promote your brand or product. To accomplish this, try to convey a message with your marketing techniques and call focus to a particular lifestyle or activity that will appeal to the masses.
Price
In fashion, the word price is referring to the value equation the brand creates in a consumer's mind and not the actual monetary amount. This simply means, for the price the customer is paying, are they getting the quality it is worth?
Place
Fashion brands have several sales channels, making where you sell your product very influential on your brand image. You have the benefit of controlling your sales environment, so pay close attention to your target market. Also, regardless of where you are selling, you should always have a website for your brand.
Promotion
Your designs can have several different promotion techniques, which range from cutting-edge to traditional. They are all effective in their own unique ways.
The following are all methods of promotion that you can utilise for your business:
Advertising - This is the most favoured method of promotion, and it includes TV, print, radio, and online methods.
CO-OP - Retail accounts will promote your designs in store or in catalogues and distributed material.
Social Media - There are several social media outlets available to brands; this method has become very popular for advertising and brand promotion.
Website - The internet is filled with opportunities for a budding designer. Creating a website to showcase your designs is a great way to promote your work.
Event Hosting
Another great way to market your fashion designs is to host events that teach people how to dress. Surprisingly, events like 'dress for success', are becoming increasingly popular for women who want to improve their public perception and image.
Activity 2
Estimated Time: 25-30 minutes
For this activity, you will stretch your imagination and creative skills and work on creating your own signature item. Before you do, search the internet and look for designers who have made their mark on the fashion world. You should be able to βind quite a few designers who have set themselves apart by creating one signature piece.
What do you notice about their designs?
Now you should try your hand at creating something that will make you stand out amongst the rest of the designers. You can choose to design something in clothing, shoes or accessories.
MODULE SUMMARY
This module focused on preparing you for owning your own fashion label. This module began with a lesson on developing business plans, which is an essential tool for you as you move forward in owning your own brand. You also should have learned about owning a business in the United Kingdom.
The module also covered information on how to start your own clothing label and walked you through how to finance your vision. As you continue to work your way through the course, you should have learned about how to organise your business, establish a price model, and create a must have item.
Finally, this module taught you how to market your clothing line. The methods you learned will have people spreading the word about your one-of-a-kind designs in no time. The next module will wrap up this course and focuses on the different career options you have available to you in this industry. As you prepare to study your career options, keep what you learned in this module in mind, so you are prepared with your business plan, marketing information, and financing knowledge.
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