HOW MUCH DOES IT COST TO START A FASHION BRAND?
Isn't that the million dollar question?
Unfortunately there isn’t one answer to this question. The answer depends on many aspects such as the product type, target market, price point, business concept, strategy etc.
In order to build a strong fashion business with real chance in being successful you must spend money to make money!
Just like with any other business.
More so, with the complexity of creating a product from scratch you can’t cut corners and you’ll need to plan ahead.
By planning ahead I don’t mean creating a wish list with what you’ll hope would happen re: I would like to sell in 50 stores in the first season, be profitable after the first year, have a markup of 80% etc. I mean a detailed, well thought of, step by step plan with a strategy, milestones and cost for executing the plan - in other words, you need a business plan.
The biggest financial challenge that start-up fashion brands face (which unfortunately most of them are either not aware of or simply ignore) is cash flow. As a fashion brand you are creating a product from scratch and are responsible to pay upfront for everything involved in making the product, you will than wait anywhere from 3-6 months before your customers pay you for the product and In the meantime you will also need to pay for the development of your next season.
This can adds up to a big investment,
For example, although you might only need 10k to start the business and develop your first season you will still need maybe 100k as an investment to get you through the first 2 years considering the circle of cash flow described above.
Than how can you figure out what it will cost you to start your fashion brand? Here are the steps to help with that: