CASH & FUNDING Archives | Page 2 of 5 | FASHION CROSS FUNCTIONAL

June 10, 2016

CASH & FUNDING: The 7 Steps to Write your Fashion Business Plan

Hi guys,
We have been talking a lot about fashion business plans lately.
But what is it for? Why do you need it? and what is inside?
The Business Plan: a courtesy for your investor
When you apply for a job, you need to send a resume and your fashion portfolio to the recruiter and share your experience in the framework of an interview.

It’s the same when you raise capital. The Business Plan is your passport to the funding. Everybody including the investor knows that it’s highly probable that reality will differ from what you wrote in the Business Plan. However it’s a basis that shows what you are aiming at, how you plan to do it, based on which assumptions.
The specificity and the difficulty of a fashion business plan
Any usual business plan book begins with two questions: What is your product? What need does it serve?
The answer to those questions are simple: you sell fashion pieces. And they are used to dress people, carry around objects if you sell bags, etc…
Now how can you concretely justify that the world really needs another brand? Would we die if your brand does not exist?

If we analyze fashion through the angle of need, the answer is clearly no. We do not need another fashion brand.
So need and hence the traditional business plan is not the adequate angle to present your fashion brand.
Because in the end for you, it’s not a question of need, it’s a question of impact.
Transform a yellow spot into the sun

Picasso once said “Some painters transform the sun into a yellow spot, others transform a yellow spot into the sun.” and that’s exactly what you need to prove in your Fashion Business Plan: you have the ability to transform a yellow spot into the sun.

As a fashion designer, your job is to dream. Your job is to translate your inner world in a brand. Your job is to stir up desire, arouse curiosity, give people what they want and create an obsession to reach maximum impact.
What guarantees maximum impact?

A powerful vision
A collection and a brand strategy that perfectly reflect this powerful vision. In the brand strategy, you have to share your knowledge of your target customer.

The structure of a Fashion Business Plan

Present your fashion brand identity
Present your target audience
Present the main conclusions of your market research
Summarize your conclusions in a SWOT analysis
Present your strategy and tailor it as much as possible to your fashion brand identity:

Present your financial estimates and show how your strategy (and the related action plans) can make your business profitable:

Startup costs
Financial plan
Profit and loss statement
Cash flow analysis
Break-even analysis

7. Present your exit strategy

Photo Credits: MBFW Berlin 2013 Lena Hoschek by Patrick Raczek – Creative Commons
*******************************************************

How to write a Fashion Business Plan?

Find the complete version of this article as well as other tools to help you through your fashion business plan, with the number one FXF guide.“The Fashion Business Plan” by Bako Rambini is available on Amazon.

*******************************************************
To receive more cash & funding related articles as well as fashion designer tools, follow us

June 3, 2016

CASH & FUNDING: When To Make Your Financial Estimates?

Source: Victoria’s Secret Fashion Show – Laurent Jean Philippe – Creative Commons

Hi Guys,
Today’s post is going to be short. After talking with a few fashion designer clients, I thought I would write about the timing when to start making your financial estimates.
Making your financial projections is the last step to carry out in your business plan. To stack all odds in your favor, you need to go through three steps before that.

Your chances to raise capital are as big as your ability to align those three elements: your vision, your design and your strategy.

What is your vision as a designer?
Since your vision is the main element that will truly make the difference and be the basis of the whole concept, you need to clarify your vision first. Who are you as a fashion designer? What is your brand identity?
Is your design in line with your vision?
Have a critical look at your collection. Have you found the adequate balance between madness and more basic pieces? Does the overall result perfectly reflect your vision?
Have you adjusted your strategy to express your vision?

Your strategy should be a translation of your ideal world. Who is your ideal customer? Do you know how to reach them? In your ideal world, how should your product be showcased? Where would you sell your product? How would a boutique look like? How would you communicate and interact with your customers?

In the end, look at the big picture. Does it look cohesive?
If yes, then you have reached alignment. You can now start calculating how much you will need to implement all that and make your financial estimates.
*******************************************************

Find more tools to help you through your fashion business plan, with the number one FXF guide. “The Fashion Business Plan” by Bako Rambini is available on Amazon.

*******************************************************
To receive more cash & funding articles and fashion designer tools, follow us

May 27, 2016June 18, 2023

CASH & FUNDING: How To Calculate The Startup Costs For Your Fashion Brand?

Bonjour Fashion designers,
today’s topic will cover the first step to begin with when making your financial projections to raise investment for your business.
After you have thoroughly worked on your fashion brand identity, researched your market and defined your strategy, you are now ready to assess how much you will need for your whole concept to come alive: let’s calculate your startup costs.

The startup costs

This chart presents the overview of all the positions you will need to invest into in order to start your company. All the costs are to be presented without Value Added Tax (VAT).

Startup costs / Intangible assets

An intangible asset is an asset that is not physical in nature.
Registering fees are all the setup costs fees you had to pay to launch your company. It comprises all the registration fees paid to the public authorities to register your company but also the costs invoiced by your company lawyer for the legal advice related to your registration (to help you establish the articles of incorporation).

Advertising startup costs are the costs you spent to advertise about the launch of the company
Patents and copyrights include all the costs spent to protect your company name, your work or your invention, if any.
Logo creation and website include all the costs you spent in order to design your logo and your website.

Tangible assets

A tangible asset is an asset that has a physical form.
Enter the value of the assets without VAT that your company actually owns.

Building and lands
For example if your company owns a sewing machine, you can register it here.
Office furniture
Computers
Software installed on the computers

By adding up all this costs you obtain the gross value of the tangible assets.
In accounting, they consider that the tangible assets are used over a certain period time called useful life. For example you will probably use your computer for 3 years. Hence to calculate the profitability of the business, it is more accurate to allocate the cost impact of your computer over 3 years. The asset depreciation accounts for that. It impacts the net value of the tangible assets (net value = gross value minus depreciation) that decreases as time goes by and the net profit of the company during the asset’s useful life.

Financial assets

A financial asset is an asset that derives value because of a contractual claim. Stocks, bonds, bank deposits, and the like are all examples of financial assets.
You can also put the amount of the deposit you gave to your landlord to rent your office.

Initial inventory

Inventory is the raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale.
In order to calculate the value of your initial inventory you will need to add up the following costs:

The cost of raw materials meaning the total cost of the fabric and trimmings you have
The cost of incurring work-in-progress you have on hand. If for example you work on a prototype, the value of your work-in-progress amounts to the cost of the fabric and trimmings used on the work-in-progress at this stage. Another possible way to calculate the cost of the work-in-progress is to assess the percentage of achievement of each item in progress. Then you multiply the total production costs for a finished item by the percentage of achievement in order to obtain the value of the work-in-progress.
The finished goods are valued at their total production costs (costs of raw materials used+labor costs).

So do a brief inventory take of all the goods in your atelier and present them like in the example hereafter. The designer lists up all the goods in his atelier that will contribute to make the products and generate future sales:

Startup cash

Startup cash is the amount of cash you have available on your bank account when launching your company. As a measure of caution, it is usually required to keep at least the equivalent of three months of fixed costs as startup cash.

April 1, 2016

CASH & FUNDING: 11 facts about funding a fashion brand

Source: GettyImages – Getty Images Entertainment – Stuart C. Wilson

Hi all,
Today’s cash & funding resource comes from a lecture on the basics of startup financing given by Nina Faulhaber at the London College of Fashion.
We picked this content because firstly it answers all the questions a fashion designer might ask (Do I have to raise funding? why actually raise funding? how? where? what happens then?…). Secondly it provides comprehensive answers and accurate insights about the funding process of fashion businesses. So here are the key topics discussed in the document:

The possible sources of capital
When to look for funding?
Who to appeal to at which development stage?
What are the impacts of each type of investment for the fashion designers?
What are the interests at stake for the investors?
What happens concretely once the deal is on?
How to approach investors?
What are the key elements to highlight to impress an investor?
How to do a deal?
How to present the pitch?
What happens once you get the cash? What to spend it on?

Enjoy!
*******************************************************
To receive more cash & funding articles and fashion designer tools, follow us