So you have an idea for launching your clothing line? There are several factors to consider before you can get your products to market. However, if you do it right, you can quickly turn a profit. It does mean staying within a budget and making connections. This article will outline where some of the costs will come from and a few ways to help cover those as you concentrate on your fashion startup.
Where Your Costs Will Originate
Depending on various costs, you will have an investment ranging from a few hundred to several thousand dollars. Your success will depend on what you can afford to establish your clothing line. The costs will come from many different sources in the beginning, which may include sourcing fabric and trim, manufacturing of garments (sampling and production), product distribution, marketing through eCommerce platforms, legal support, and advertising. It may sound like a daunting task, but once you get a handle on all these needs, your dream of having your clothing line will become a reality.
How To Pay For These Things
Sometimes it takes creative financing to get products to market. But even Bella + Canvas had to start somewhere. So here is a list of potential sources for funding worth exploring.
1 – Utilize Your Savings
Provided you have been putting aside some money for some time, and this is one of your best options. One benefit of using your finances, you end up without debt. The downside is that using money from a retirement saving fund could harm your financial health.
However, starting small is fine if you begin your savings journey. As little as 5 or 10 percent of your income going into savings will prove valuable when you need it. There are also practical ways to cut down your expenses so you can save a bit monthly. They may include reducing non-essential spending, seeking a raise to increase your income, or possibly adding a side hustle to generate additional funds.
2 – Borrow From A Lender
Borrowing is not an uncommon scenario. Fashion entrepreneurs without enough savings turn to lenders like banks and other financial institutions. It is best to do some homework first by investigating fees, terms, interest rates, maximum loan amounts allowed, and how quickly you can receive the money you need. All of these factors will differ from loan to loan.
Then decide where you will get your loan based on your information. For example, you may discover that rather than a lump sum loan, it could be better to set up a business line of credit. Therefore, provide access to funding when needed and you have the funds available. Business operators commonly use a line of credit.
3 – Online Fundraising Campaign
Crowdfunding is a great way to raise funds for a startup. It is one of the easiest ways to finance a venture without giving up equity—the purpose of many online platforms, including GoFundMe, Indiegogo, and Kickstarter. Be sure to review the terms and conditions of each and choose the best fit for what you need.
Businesses use crowdfunding to pitch their product to the public and leave it up to each individual to decide whether or not to contribute a donation. The donation size is entirely up to the individual, which could take time to reach your funding target. Also, some of these platforms require you to pay back your funders, and others need you to reward them for helping you.
4 – Approach Individual Investors
You may have heard of angel investors or venture capitalists. These are good options to consider for funding your clothing line. How these types of investors operate is that they provide you with funding in exchange for equity in your business. If you offer too much, these investors could gain control of your business and decide how it will operate. That primary consideration may or may not fit your overall business plan.
There are also differences between angel investors and venture capitalists. For example, an angel investor will fund smaller amounts seeking less of the business and are perfect for the early stages of establishment. On the other hand, venture capitalists are a better fit once established as their contribution reduces your risk, making expansion more attractive with an additional funding source.
5 – Explore Personal Connections
You can always turn to family and friends if you have exhausted all other avenues. There is no doubt that asking these close, personal connections for money may be somewhat awkward, but there are advantages to reaching out to these people. First, they should already know your history and your passion. They will have a level of trust within your abilities.
By asking for help, your family and friends become closer to you and are willing to support you in a tangible way that leads to your success. You won’t know if you don’t ask. The downside is that if your business takes longer to succeed, it may impact how long it will take for you to pay back your family and friends, which could put a strain on these relationships.
Launching your clothing line is exciting and scary. It will also cost some money in the startup stage. The tips listed above give you some ideas of where to go to help fund those first steps in establishing your business. Using a combination of them will work best for your needs. Regardless of how you support your fashion brand, the more successful it becomes, the easier it will be to repay those debts you incur to get your business off the ground and into the marketplace.