No industry is easy to break into, and now, thanks to the internet, businesses have access to a resource which continues to change the face of commerce. Regardless of the simplicity in a clothing garment, the fashion industry is one of the hardest industries to successfully navigate, with over 50 percent of start-up labels folding after just 3 years.
Many artistic individuals launch clothing lines because of their underlying passion in the industry, but often, these people are not business savvy entrepreneurs who understand how successful businesses operate. New designs in fashion are abundant and very trend focussed, meaning today’s in-demand style will be tomorrow’s forgotten look. With fast fashion retailers establishing their strength and ability to quickly turn a runway trend into a collection, new players in the market need to be quick, stylish and understand the new consumer in order to survive and thrive.
Competition of course, isn’t the only reason why many labels fail, with many in house business decisions being decisive factors in why some start-ups aren’t successful. The following steps give guidance on what it takes to make the new label a winner.
Understand the costs
Time and money are necessary to make a new label succeed. The typical doubling rule works well for aspiring individuals who want to start a clothing line. Do your analysis and forecasts and then double the time and capital required to get started. In every business there is plenty of hard work, so if you are already thinking about your holiday in the Bahamas, drinking cocktails after your label hits the big time, then maybe the high stress start-up world isn’t for you.
Any experienced entrepreneur knows a company without a business plan is at an immediate handicap. A business plan is an inherently strategic written description of your business's future. It should state how you plan to take yourself from where you are at the beginning, to where you want to go in the future (usually three to five years out). The future should take into account different resources and abilities as well as greater profitability and increased assets.
It’s also important to get the company vision right. How does it want to be remembered, or known as, and what are the core values that drive it forward. It is good to include a picture of what future success looks like for your company. Additionally for fashion lines, labels need to have a clear idea of where they plan to sit in the market. Is it Haute Couture, ethically sourced or for a niche market? For brands, having a clear vision on what it wants to sell and who it wants to sell to is important to get right at the start. The business plan needs some indication of operational overview. The owner should know how the company will operate and manufacturing options. The important thing to remember is that this is a clear and defined outline. With an ever changing market, labels need to be able to adapt in order to make the most of market opportunities.
Strong business foundations
Get advice on how best to structure your business. An incorrect structure could set you off on the wrong path. Make sure you have a clear understanding and written agreement with you partners.
Establish a pricing model
Wholesale, vertical or online? Vertically integrated companies have proven to be extremely profitable in recent years but so to have companies with multi-channel approaches which include aspects of all three. If you have limited capital, selling through retailers might be your best option to begin with, coupling that with an e-commerce strategy. Online, gives you full margin and control over branding and engagement with customers. The Daily Edited www.thedailyedited.com is a great example of a company that has used e-commerce to its full advantage. E-commerce is growing rapidly as billions are spent monthly so you have a lot to lose if you don’t move your business online.
The most successful fashion brands will embrace a blend of both traditional and new media to communicate a consistent and authentic message across multiple channels in a manner that both piques consumer interest and creates long-term brand value.
Knowing where to produce the clothing line is an extremely important decision. A small business may choose to manufacture its products, but outsourcing should also be considered. Many businesses are perfectly equipped with years and years of production knowledge to handle your production externally. Your skills as a brand and entrepreneur are your vision and entrepreneurialism, while their skills are their craftsmanship and attention to detail. A smart business owner can move costs out of production (by not purchasing machinery and training staff), and into sales and marketing, which will help drive sales and boost profitability. Customers are also becoming more and more driven by quality goods, so if you are in the high-end market, choosing the right manufacturer that upholds your brand’s values is paramount to success. Texstyled is here to help you turn your concept into a collection by removing the difficulty of sourcing designs, luxury products and manufacturers from around the globe.
Last of all, be inspired!