CASH & FUNDING: The 3 Basics To Prepare Before Working On Your Fashion Business Plan

 

Hey guys,

 

I wrote the fashion business plan book from the moment I started working for fashion designers. Originally though, I come from the auditing and finance sector. I have audited many companies across the globe. I actually practiced this for large international listed corporates, in the industrial and banking field. Especially in the banking industry, my job was to evaluate loan applications from companies. So my role was to review the applications and to decide if the applicant companies should be granted the loan…So writing or reviewing business plans finally became something that I got pretty much accustomed to.

What makes a business plan different in the fashion industry

And to be perfectly honest, when I was asked to do it, in the fashion industry I encountered some difficulties at the beginning. In fact usually, when you write a business plan, it’s important to think about a gap in the market and how your product is going to change that. So it means that in classic business plans, you need to have a gap and your product would be a solution. In most of the books that exist today it is recommended to start your business plan by identifying an unfulfilled need (this gap). In most books on the subject, you will read that it is necessary to identify the gap, a need from the start, and to present a solution which will be discussed in the business plan. And yet fashion cannot be considered like that.

If we are being completely honest, we don’t need another brand because it’s a saturated market already. So presenting fashion from the classic angle of a solution offered to fulfill a need does not work for a fashion product. So designers who start in this industry need to get that it is vital to your business to go beyond the need. In fashion, instead of a need, it’s important to create a strong impact from the beginning. Because when you make a strong impact, you create a desire.

You have to make people want your brand.

You have to create emotions, you have to really move people. But that’s not enough. You have to build a whole business model, based on this desire. So it means that the fashion concept has to last in time. And if the fashion concept does not last, if the emotion you create is just temporary, you have no valid foundation for a fashion business. This became clear to me when working with fashion brands. I observed that the fashion business plan was very different from what was done in other industries and that’s where I started thinking about a method to generate it.

Reminder: what is a business plan and do you need one? 

So before we move on to the basics, let’s clarify what is a business plan. A business plan is a document that helps you explain a project, the strategy that you will apply to make a business out of your concept, with the related financial projections. As you may guess, this is quite a massive work. So the question some of you may have is: do you really need to go through all that fuss? Some of you for example tell me that you are planning something quite simple and you don’t plan to apply for a loan or find investors. So you don’t understand why you would need to go through a business plan.

And I always answer that it is always good to have a business plan, even a simplified one. Even if you are not going to look for funding. Why? Because, at least when you do one, even something simplified, you know where it is going and you have an idea of how many of the dresses you made it will take you to break even. This is also an interesting info, even for you personally. You probably want to know when you will be able to earn your first salary because it’s fine and good to sell fabulous outfits but you also need to earn a living out of it. Otherwise it won’t last! So that is one reason to start drafting a business plan.

And in the case where you look for funding or even look for serious business partners to collaborate with, it’s good to have a business plan to show that you are not completely clueless and you know what you are talking about. This is actually one of the pre-conceptions that people from finance have in their mind when thinking of fashion creatives. And you don’t want to prove them right from the first meeting. I am not telling you to lie about who you are but at least have a down to earth approach that indicates that you know your market and the steps to follow to get your collection sold. It doesn’t mean that you are doomed if you don’t do exactly what’s in the business plan. But it’s a way to communicate with other parties, a courtesy, the least you can do when you ask for someone’s money. I’ve seen people get angry about having to do all this financial estimates. Presenting a business plan, especially a valid one means that you have a plan. Nobody will blame you if you don’t do exactly what’s written there. But it says that you have a plan and when people lend you money, you need to show that you have an idea of how you are going to use it.

It’s the equivalent of a resume when you apply for a job.

However, before calculating your revenues and costs, you need to know where you are heading to. It takes preparation, three basics we unveil hereafter.

Button fashion business plan - Fashion FXF - Fashion cross functional

Basic #1 – Be 100% cohesive.

As I mentioned in the beginning, the difference with business plans in other industries, is this necessity to make a strong impact from the beginning. This is a key element that you really need to understand. And it doesn’t matter if you are a sustainable brand, an ethnic brand or a fashion tech brand. A fashion product has to make strong impact from the beginning. And the way to achieve that impact is through the cohesion you achieve through your entire project.

So what does this means concretely?

Firstly you have to speak the language of fashion. Meaning you have to understand that in this industry, looks and visuals have to be perfectly polished. There is absolutely no excuse for that. I covered it already in many previous contents but I insist because lots of beginners in the industry do not understand that.

It’s like when you go to a phone company and you buy a smartphone. The salesperson will talk about the features of the smartphone and compare it to the competition. However no one will ever promote you a smartphone by telling you that it can call. This is a given. So it’s the same in fashion, excellent visuals (photos, videos, websites, lookbooks Instagram profiles) are a given. You have to do whatever it to takes to have a good presentation. One of my customers told me once that she didn’t have enough money to do good visuals. And I showed her websites of new designers who were penniless. Their pictures and websites still looked fabulous. They made it work. So why wouldn’t you?

So when you take a picture of your design, put a good lighting. Please don’t leave pictures with yellow light. Remove the clutter, choose a plain background or if it is cluttered, it has to be artistically interesting and sophisticated. Then the model’s posture and pause has to be highlight your design. Underline a  silhouette.

Once you understand the language of fashion, you have to make sure that your entire brand is cohesive. It means that if you say you are a futuristic fashion brand for example, it has to show in your design. It has to show in the material you use. Maybe you’ll use tech fabric, mixed with metal. It also has to show in the cut you choose. Maybe the clothes you design will show geometric shapes.

Then in the way you market your products, you will distribute your clothes in the places that are more open to that kind of fashion. Asian markets (japan, china, south korea, maybe also London) could be a good fit.

Then if you do an event to promote the brand, you will make sure to collaborate with very futuristic DJs or tech companies to set the tone of your event.

Then in your communication, on top of the traditional fashion magazines, you could also maybe be featured in avant-garde magazines. Why? Because there is a good chance that people who like futuristic trends read those magazines.

And if you decide for example to give some of your profits to a charity, find one that shares your love for the futuristic world and helps to do advanced research in that field for example.

So focus on being 100% cohesive in your approach

Basic #2 – Be crystal-clear on your fashion brand DNA

IN order to be able to align your business and be totally cohesive, you need to know what to align to. Are you going to go 100% on the futuristic side? Or do you need to focus more on the classic style? How to know what exactly to align to?

Well you need to understand and define your fashion brand DNA first. But let’s clarify what is a fashion brand DNA first. Like a person’s DNA makes a person unique, A fashion brand DNA is what makes your fashion brand unique. It’s its identity card.

And before you draft your business plan, you have to be crystal-clear on yours. Why? Since number one criteria to make a fashion business fundable is the strength of its impact and since you achieve that by aligning everything, you need to know what to align it to. And this is why you need a fashion brand DNA. it will be the pillar to which you will align everything in your business.

At fashion FXF we have a 4 hour individual workshop to work on that matter. We go deep through your history, what inspires you in general and what inspired you to create the brand. We make a connection between your story, your inspirations (commercials, movies, ads, paintings, musique, books etc), your actual design, where you want to go, who you could target with your designs and we define exactly what the brand is about. We establish a pattern and find similarities between all the things you said and based on that, we define the identity card of your fashion brand: the physical traits that are always present in your design (and it‘s not only about the logo, it includes the cut, the silhouette etc), your brand personality, its culture, what people say when they wear it, what people think when they see it on someone else and how it interacts with people.

So the idea in the end is to really create a character with your brand. You have all the detailed steps in my book The fashion business plan, that includes a workbook so that you can immediately apply what you just learned on your own business.

Button fashion business plan - Fashion FXF - Fashion cross functional

Basic # 3 – Tailor your strategy to your fashion brand DNA

Third step to work on before crunching the numbers for your fashion brand is aligning the strategy to your fashion brand DNA.

When you just start, there’s a chance that you are overwhelmed with information and you don’t know what to do. Plus you probably learn many new things. Strategy – as in the key method that you will use to sell first and be profitable in the end – strategy is key. So at the beginning you will maybe learn the elements of a well rounded fashion business strategy. So you will probably confirm the exact customer that you target, the price point of your products. Then you will decide what you will set to reach your target customer: which distribution strategy you will go for: full online, partly online partly offline with pop stores for example, trunk shows in department stores, Wholesale, online and/or offline multibrand, and so one. Then you will probably decide to promote your events and show your fashion line to your target customer. It is expected that you know where your target customer spends time, which brand and stores they like, what magazines they read, which facebook group they mostly follow, what hashtag they use on Instagram and so on. This approach is quite standard to any industry.

However in order to have a better chance to succeed in your fashion business, and to generate the impact we keep talking about, you absolutely need to adjust your strategy to the brand DNA that you defined earlier.

So for example I love what Dolce and Gabbana did these last years to remind people of its Sicilian influence. I was in Milan last year and I took photos of their amazing flagship windows via Montenapoleone. It was magical. They went a 100% on the Sicilian concept, made small reproductions of a market. The craft was impressive ad beautiful (well that’s actually no surprise because it’s a must). It was really worth looking at. It was worth going there. You have to understand what’s happening in today’s market. You know there are many ways to consume fashion these days. And since we have the comfort of internet, when you have a brick and mortar shop, you really have to go the extra mile and make it worthwhile for your audience. Why should they leave their couch and go there? You have to offer an experience offline that your customer would never have online and that your customer would never have at any other brand. You have to make them feel something. The only way to do that is to revisit your strategy using the angle of your brand DNA. You see the Sicilian influence everywhere. In the collections as well naturally and in the commercials. They kept that strong traditional and popular print in their recent fashion movies. So you will see some strong references there.

This is how you keep things cohesive. And once you know what kind of strategy you are going to apply and how you are going to tailor it to your fashion brand DNA, then only you can price what you are going to do.

In order to guide you into these steps for your own brand we also have it detailed in The fashion business plan book. The book gives a method to find and confirm your target audience with a dedicated workbook as well. Then in another chapter it summarizes a few strategic directions you can go for, knowing of course that you have to tailor it to your brand DNA afterwards. And there is a workbook for that strategy chapter as well, of course.

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Interested in writing your own fashion business plan? 

Here is the tool you need to get for yourself. The fashion business plan provides you with a step-by-step approach to write it all down.

Button fashion business plan - Fashion FXF - Fashion cross functional

The Fashion Business plan - Fashion FXF - Fashion cross functional



 

 

 

 

 

 

 

 


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