The fashion industry is highly competitive.
The fashion industry is extremely competitive, and starting a business in it will take talent, effort and significant funding. Potential entrepreneurs must first decide what aspect they want to focus on: design, production, or wholesale or retail sale of clothing and accessories, and then structure their business plan accordingly. They must also decide whether they are going to conduct business online, from a physical location or a combination, because this will affect the funding required for startup costs. While difficult, it is not impossible to start a fashion-related business. Some famous designers, such as Coco Chanel, Vivienne Westwood and Mary Quant started out alone and, through hard work and determination, built global empires.
1. Research the aspect of the fashion business you plan to start in. Is it feasible, and can you realistically expect to make a profit? Is there a niche you can identify that is underserved and that you can serve? There are plenty of businesses engaged in fashion design and merchandising, but you may find that you can fulfill an, as yet, unsaturated market by designing specifically for a certain group such as older, petite or plus-size women, who long for designer clothing but have few choices, appropriate for their age or size.
2. Develop a business plan that comprehensively details the business mission and objectives, market potential, competition, structure, financial projections and startup costs. A strong business plan is essential to attract investors and funding. It is important that you focus on defining how your business will stand apart from others in the fashion industry and what you will do differently that will attract clientele. The Fashion-Incubator.com website has a wealth of tutorials and resources to assist the fashion entrepreneur.
3. Seek advice from business startup experts. The Small Business Administration (SBA) can help entrepreneurs realize their goals by providing expert advice and information on funding and possible grant and loan options. The business.gov website is also a good resource for anyone considering starting a business. No matter what area of the fashion industry you intend to concentrate on, the SBA will be able to provide you with essential advice, free of charge.
4. Choose a business location that is affordable, is zoned for your type of business, and will attract foot traffic and customers. Compare premises managed by different property management companies, and see whether any provide move-in incentives, such as reduced rental rates. You may find that you live in a city where the fashion and garment making industry is concentrated in one area, or you may want to find a small space in a trendy neighborhood, where the clientele you intend to attract congregate. Ultimately, price will determine where your first space will be.
5. Finance your business by seeking government-backed loans and venture capital. Find like-minded entrepreneurs whom you may be able to partner with. Resist spending savings and using credit cards in the initial startup of your business. You may even be able to find investors specific to the fashion industry. For example, New Entrepreneurs has been set up specifically to assist emerging fashion talent.
6. Decide your business structure. There are tax advantages to each type of business structure. A sole proprietorship or a corporation may work for you. Consult with a business startup expert to determine the best structure for your business, and file the appropriate IRS, state and local tax forms and obtain state and local business licenses, as appropriate for your specific location.
7. Determine what stock you require or the materials needed, if you are going to make items to sell. Source wholesale vendors and compare prices to get the best deals possible and increase your profit margin. Try to stay loyal to vendors such as fabric and notions wholesalers, because they may offer discounts to ongoing customers.
8. Join fashion industry-related organizations and associations and attend industry-related events to ensure that you keep up with current trends and can customize merchandise to rising trends for future seasons.
9. Determine whether you can afford staff to assist you in running your business, or to pay experts to assist with functions such as accounting and tax filing. If you cannot, ensure that you keep clear records and stay on top of accounting functions. Take business management courses at your local community college. If you have studied fashion, you may have studied with other business-minded students whom you can collaborate with.