We love meeting with new entrepreneurs and hearing about their ideas! Being fashion product development experts, we know the fun is in building and testing the product. But, before you jump in with both feet you need to complete the first step in launching any business: determining the start up costs. You don’t want to get 3 months down the road and realize you have spent your entire budget and you haven’t even started production yet! You need to calculate that budget before you start. Here are some steps you can take to help you determine your fashion line start up costs:
- Develop a pre-cost of your products. Developing a pre-cost is really based on educated guessing. Don’t expect this to be perfect, but make it reasonable. You don’t need the exact amount down to the penny, but you need a general idea of how much your products will costs to produce. Look to experts in the fashion industry who can educate you on the costs of fabrics, trims, and cut and sew prices.
Make a list of startup expenses and assets for any business. For instance, you need a logo, website, research and development, legal and professional fees. Don’t forget office expenses if you plan to purchase new items like a new computer, new software, printer, or furniture. Don’t forget marketing materials, sales materials or people that you need to pay.
Also, tally up the items that are industry specific. In the fashion industry you will most likely need a photographer, models, hair stylists and make-up artists for photoshoots. As you make this list, it is a great idea to also run a tally of anyone you can call in for favors. Everyone wants to help an entrepreneur starting out. Calling in these favors in a few years will be harder. In short, if your brother’s friend’s sister is a photographer, make a mental note to reach out at some point for that favor!
Lastly, calculate the inventory you plan to have on hand. While this is an asset (mentioned above) it is a doozy and needs a bit of strategic planning. If you plan to go to a retail show you might need to have a good amount of inventory on hand. However, if you plan to sell online only at first, you might want less on hand so that you don’t need to have a flash sale in case sales don’t take off right away.
No doubt about it there are a lot of things to consider when calculating start-up costs when starting your own fashion brand. It can feel overwhelming and really, calculating numbers isn’t much fun. We love it here at Stitch Method. We cover this topic in-depth during our Stitch Strategy. Contact us and we can help!