How to bootstrap your fashion brand.
The term bootstrapping means building a company from the ground up with nothing but personal savings and, hopefully, cash from the first sales. The term is also used as a noun: A bootstrap is a business launched by an entrepreneur with little or no outside cash or other support.
Since COVID, it is less certain how easy it will be for new fashion brands to gain investment. That is why bootstrapping is the buzz word in the world of entrepreneurship.
As a fashion consultant, I help numerous fashion brands launch their businesses online. I have seen and learnt how many successfully bootstrapped their eCommerce business. Read on to discover the methods they used and benefit from their experience.
D.I.Y. as much as possible.
For those that don’t know D.I.Y. means do-it-yourself. Analyse every task within your business and see if you can complete it yourself. Only outsource the ‘needs must’ tasks; the tasks that require an expert for success and/or those tasks that will directly deliver revenue as quickly as possible.
D.I.Y. can also mean calling in a favour or asking your friends and family for help. Either way, D.I.Y. is all about reducing outgoing costs and running a lean cash flow until your fashion brand is launched and you start seeing revenue into your business.
A fantastic example of a fashion entrepreneur who did exactly this is Sarah Blakely, the founder of Spanx.
‘She started Spanx in 2000 with $5,000 of her personal savings. The company’s first headquarters was her apartment in Atlanta. She even wrote and filed her own patent application to save on legal fees. In 2016, Blakely made Forbes’ first list of the richest self-made women. Blakely still owns 100% of Spanx. Her personal fortune is estimated at about $1 billion.’
You can make your first million by D.I.Y!
E-learning; either business or creative courses.
Because of COVID, 2020 has seen a boom in online learning (E-learning). The huge reduction in face-to-face learning has forced everyone online to learn and up-skill. The E-learning market is now fully loaded with a huge spectrum of courses covering business 101 through to how to pattern cut & more. Whatever you are looking for, there is sure to be a course for you.
E-learning means you can learn in your own time, enabling you to earn and study. Also with most courses, you are being taught by an expert in their field. They are teaching you exactly ‘how to’ using their expertise in the industry; they have been there and done it time and time again! Their value is their experience.
A final reason why E-learning is a great bootstrapping option right now is that demand is high. The market is extremely competitive meaning most RRP’ have been lowered to remain viable. Now is the time to take advance of this trend in the market and up-skill.
Producing on-demand collections doesn’t work for every brand. It will work for those brands that have a solid relationship with their manufacturer as well as a medium to short lead time (no longer than 6 weeks).
The success of pre-sale is timing and how you choose to use this method. Options being:
- List your salesman samples on your website and social media ahead of launch and ahead of the products being made. Use the pre-order sales to gauge a reaction and interest for that product. Use this as a guide to the total units for that order.
- Use pre-sale only. This means you never place a lump-sum order with the factory; you only produce on-demand. This method will only work if you have an extremely strong and reactional customer service that can keep your customer up to date with their order every step of the way. You also need a short lead time i.e. less than 6 weeks.
- When you sell out of an item immediately list the product to be bought as pre-sale while you place a repeat order with the factory.
Pre-sale is a great method for managing cash flow, as long as you deliver within the terms agreed with the customer. It can also help you to de-risk your business model by not investing in a lot of stock upfront.
Since COVID, many fashion brands are using this method as a way to be seen as sustainable and is a great marketing tactic. By producing only what is in demand your brand is employing sustainable production methods. You’re not overproducing and creating textile waste for landfill.
"Producing on-demand collections doesn’t work for every brand. It will work for those brands that have a solid relationship with their manufacturer as well as a medium to short lead time (no longer than 6 weeks)."
Any sale you make reinvest it ASAP.
As a fashion entrepreneur, especially when bootstrapping, don’t expect to pay yourself a wage for the first year. While you launch and grow your brand, you are running a lean operation. Every dollar you make should be reinvested into the business. You are striving to continually improve and strengthen your position which in return should increase your sales.
For every dollar invested in your fashion brand, ensure you always focus on return-on-investment (ROI) spend. What will deliver immediate results as opposed to nice to have? Think like a business owner, not a creative.
Reduce your living costs.
Bootstrapping your fashion brand is a personal choice. You are funding your fashion brand through personal investments. You need to consider all of your personal outgoings to support this investment.
The most successful way we have seen fashion brands achieve this is by listing all of their personal monthly expenses and then looking at ways to reduce these and setting a monthly personal budget.
Always remember the short term loss vs long term goal! A few sacrifices will go a long way when it comes to bootstrapping your business.
Research and plan before starting out. Ensure you have a niche.
The final method is probably the most important.
Why? You shouldn’t implement all of the above methods, without research and validation. How do you know you have a niche in the market or problem to solve if you have not done the research.
You must always know there is a demand for your product and/or service before you invest a dollar into developing your idea.
I teach this process in our 6-step course. The process to find your niche is:
Method 1 = Identify your market
Method 2 = What are your competitors doing?
Method 3 = Who is your target audience?
Method 4 = Which is the best channel for you
Method 5 = How to price your product competitively
Method 6 = Validate your idea
To find out more about our proven 6-steps to launch a fashion brand course contact us.
Do you want to learn more about How to Launch Your Fashion Brand? Take our 6-step course. We provide in-depth information about business set-up and finance from day 1. This means you will know exactly how much cash you need to invest before your first sale. You will discover how to set up your fashion brand in a professional way and transform it from a hobby to a successful business.
To learn more about the 6-steps course click here.