Flashing lights, runway models, and a premium corner store location.
It’s every fashionista’s dream, but one many simply don’t believe they can achieve. Or they attempt it and then fall short and have to close shop.
So, what gives? Some of these business owners may have run out of funds while others may have not made enough profit.
Fashion and business seem to not mix on the surface. But, any fashion business owner needs to know as much about business as they do about fashion.
Knowing how to start a fashion business is more complicated than stocking merchandise and opening your doors. It requires preparation, knowledge of business ongoings, and conducting research.
But if you’re a fashionista fully committed to having the store of your dreams, then your store can definitely become a reality. With the right planning and dedication, you can learn how to successfully run your business and be in the industry you love.
Read on to learn more about the business side of the fashion industry to set your store up for success.
Fashionista and Business Owner: How to Start a Fashion Business
Ready to get down to business? The fashion industry can be competitive, but these tips will help you shine. Explore the following tips for starting a fashion business.
1. Conduct Market Research
To conduct market research, first identify your target audience. Your target audience is the customers most likely to purchase your products. Determine where they live, how much they make, and places they frequent.
Knowing this information will help you to identify whether or not your desired fashion items will be a good match for your target audience. If you intend on having a brick and mortar location, this will be especially important. If you have an online store, then it will be much easier to reach your target audience.
Some brick and mortar locations also have an online store. This grants them the experience of interacting with customers in person as well as shipping orders.
2. Know Your Overhead
In the business world, overhead is the amount of money it takes to start and maintain your business. These are all of the non-labor expenses it takes to run your store. For example, postage, rent, insurance, and product fees. The benefits of a wholesale supplier, however, will likely lower product costs.
Knowing your overhead is essential before making any major decisions. Make sure you know all of the costs in running your business on a per month basis and the cost of labor to determine your profit margin.
Starting a brick and mortar store is the more expensive option. It’s also more of a risk. But if you secured the right location and are confident that your products will sell, then it may be worth it.
Running an online store, on the other hand, has very low overhead. Many websites only charge listing fees and transaction fees which allows you to make more of a profit.
3. Carefully Examine Your Finances
Running a business requires money. How do you intend on getting this money?
By getting a loan? Dipping into your own savings? Perhaps another way?
Whichever way you decide, make sure it matches your risk tolerance. You may want to ensure that you have 3 to 6 months of rent and bill money set aside in the event your business closes shop.
It’s important that you see the big picture when examining your finances. Make sure you know the costs and the risks thoroughly before proceeding. Especially, if you do decide to get a business loan, borrow money, or dip into your savings.
It’s highly recommended to also hire an accountant/tax advisor to keep track of your business expenses. You’ll most likely want and need to keep your business and personal finances separate. You’ll also want to keep track of receipts and store them for tax season.
Marketing is essential for any fashion brand. Even popular name brands still have to market their products.
Market your products by creating social media pages, purchasing online ad space, or creating a newsletter to send out via email. You’ll also want to create a logo, brand, and tone of voice for your fashion store. This should reflect your own vision as well as be appealing to your target audience.
Marketing budgets are sometimes feared because companies pay a whole lot to perfect their marketing strategies. But, marketing can also be fairly cheap if you can do the work yourself. If you find yourself needing additional marketing help, then consider outsourcing your marketing efforts or hiring a marketing guru.
5. Have a Mentor
We all need a little help from time to time, and starting a new business can be exciting yet scary at times. It helps tremendously to learn the ropes from someone experienced so they can guide you along the way.
Someone in the fashion industry would be best, but anyone who owns a business can also be of help. Look for someone who has a similar store to you as well. Ask them about their mistakes as well as their successes to determine how to best start up your business.
6. Know the Regulations
Businesses need to follow laws and regulations in order to operate legally and effectively. You’ll need to select a business structure and determine what laws you’ll need to follow in your area.
Online businesses also have to follow laws. Make sure to thoroughly conduct research in your area to figure out the best course of action. For example, you’ll need to follow tax laws as well as get the proper permits to operate your business.
If needed, contact a lawyer who understands your local business laws.
Create a Vision: How to Start a Fashion Business
When learning how to start a fashion business, one of the things that will get you through the more challenging days is the vision for your store. Create a vision for your business and allow your fashionista to shine through. See yourself in your store and imagine it exactly how you want it.
Then, to the best of your ability, make it a reality!
Want to learn more about starting a business? Check out our blog post for 5 simple tips for starting a business.