A business plan is a roadmap that outlines goals, plans and how to achieve those goals. With a thorough business plan, you can think critically about your idea and discover if your model is valuable, actionable and achievable.
Keep in mind that your business plan is never finished, it’s a living document.
The market and the needs of your potential customers will change over time. If you acknowledge this fact, you will have a clear mind on your business.
Be critical and adapt your business plan if necessary. Stay focused and know that not everything will go as you expected. Eventually, the growth of your brand will be positive if you keep your business plan flexible.
A business plan of a clothing line is a key document with information about the description of the market, your brand story, your products with the pricing, your marketing strategy and financial information.
A market analysis is research about the business market you’re in: the fashion industry.
The analysis is necessary because you have to know your market and if you can build a sustainable brand in it.
You can do a market analysis by following these steps:
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The best brands are built on great stories
Every great brand tells a great story, let’s talk about your story.
A brand story goes beyond what’s printed on your t-shirt. Your brand story is what people believe about your brand based on the facts, feelings and interpretations evoked by your clothing.
Your brand is just another commodity if you don’t have a true brand story. Building a story is about building something that people care about and want to buy into.
You can write out your brand story with the follow key aspects:
A brand story has to be clear and understandable. Here’s an example of a known british brand that tells a simple but powerful story: Paul Smith.
Paul Smith - Brand story
Paul Smith is one of the great English fashion designers who developed his own ‘classic with a twist’ style.
The Paul Smith brand story is simple: the thwarted athlete who still wants to become a world beater. When he was 17 years old, he wanted to become a professional racing cyclist.
Paul Smith had a serious accident and stayed in the hospital for months. There, he met interesting people who told him stories about the Bauhaus and contemporary design. From that moment, he wanted to tell his story through an own clothing line.
The brand story is about an outsider who makes high-quality clothes and accessories. It’s a story that reflects simplicity with elegant twists. Eventually, the Paul Smith brand has become known in the international market.
Another great example of a successful brand story is the famous Jack Daniels Whiskey. Read more about the story in this inspiring post.
You can’t start your clothing line without knowing exactly what you want to sell and who will want to buy it.
First comes first: create your own product. You can start with a small collection.
After your first release, you will find out which products are trending the most.
Follow these steps to create your own product:
What is your idea? What do you want to create? If people will see your design, what should they think about it?
Draw your design digitally, and focus on every detail. Don’t have a clue on how to design clothing? We can help you out with our design service.
Which colours of textile do you want? Which style of clothes fits your brand strategy?
This is a very important step, don’t choose the most easy or cheapest producer. Find a reliable partner that works on long-term.
Make sure that this partner is doing quality control. Your brand has to be made from high-quality materials. That’s a must for the image of your brand, and will certainly lead to success.
The price of your clothes has to be right. Prices that are too low or too high will attain in bad results. Look at your competitors, how much do they ask for a sweater?
The marketing strategy is the phase where you decide how you will sell your clothes.
How will you sell your clothes? Online, offline, or both?
E-commerce is booming for years, so a webshop is certainly a good idea. You're basically open 24/07, worldwide.
Also offline selling (in retail shops) is necessary. Find out which stores fit your style and ask them if they want to sell your clothes.
Thereby, you have to find out how you'll communicate with your audience. Choose the most effective communication channels (social media, website, blogs…) and communicate on a regular basis.
You can organize giveaways on Facebook to have more likes for example.
We recommend you to read the post about 17 successful marketing strategies to take your clothing brand to the next level. You will be surprised about all the possibilities to boost your clothing label.
The purpose of the financial part of your business plan is two-fold.
First, you will have to find out if you need investors or partners. They will have to see the financial numbers of course. The second reason, and that’s the most important, is to calculate your own benefit.
How do you write the financial part of the business plan? These 6 items are absolutely necessary:
1. Sales Forecast
Start with a sales forecast. For every month for the first year, you can set up different lines of sales. This can be measured on the results of the past year(s). If you’re starting a clothing brand, you can make an educated guess.
2. Create an expenses budget
How much is it going to cost if you actually make the sales you have forecast? Take into account the fixed costs and the variable costs.
3. Cash-flow statement
Let’s move to the third step: develop a cash-flow statement. The cash flow measures the total amount of money that goes in and out of your business per month. This is very important, as you have to measure your cash reserves.
4. Income projections
A projection statement makes you look ahead and helps you to make some estimates about the financial status of your business. Shortly said, these are the profits that the company will have in the future. In other words: the profit and loss statement.
5. Assets and liabilities
Next, you have to deal with assets and liabilities that are not in the profits and loss statement. Let’s explain it easy: an asset is anything that puts money in your pocket, and a liability is anything that takes money from your pocket.
6. Break-even analysis
Last step: set up your breakeven analysis. The break-even point is when your business’s expenses match your sales or service volume. Your business is viable when your overall revenue will exceed your overall expenses.
In this post, we went in detail about important parts of your business plan. We could write books about the perfect business plan, but that would be too much, right?
Based on the experience of world-known fashion labels, we created a 1-page template of a business plan. The template is easy to implement and will give you a clear overview of all the steps that are needed to start a clothing brand.