Alison Lewy MBE, is a fashion industry expert, author and founder of Fashion Angel, who provide mentoring, business support and access to funding for the fashion industry. Alison was a guest on Episode 79 of my podcast Start, Scale Succeed and shares her top tips for starting a fashion brand.
Common mistakes to avoid when starting a fashion brand
- A lot of people come into it thinking it’s a sexy glamorous industry and don’t realise what goes on behind the scenes, and that in a lot of cases you need quite deep pockets to make it work.
- You have to plan, things don’t happen by accident. You need to have a really clear purpose for what you are trying to do, and a strong USP for your brand.
- Make sure you research the market, and understand where your brand is going to sit amongst your competitors.
Put together a plan for exactly how you are going to do it, and what it is going to cost. I see so many brands run out of money before they really get anywhere.
What should you include in a business plan when starting a fashion brand?
Firstly, if it is just for yourself, which it usually is to start with, it doesn’t need to be War & Peace.
Things to include:
Brand Identity
- Define your USP, and develop a short, powerful couple of sentences, because you’ve got to get your message over really quickly.
- Remember people don’t buy products, they buy the stories behind the brand. Think through this side of it.
- Do your market research, understand who your competitors are, and where your product is going to sit.
- Profile your target customers; you have to know who you are selling to, and what’s going to make them want your product.
Operations
Manufacturing and sourcing is often the most difficult part of it. You will need to include in your plan
- How and where are you going to get your product made
- What is it going to cost – are you going to be able to sell it at a price point that your customers can afford, and will give you some profit?
- Your selling model – whether it is business to business, to retailers that sell on your behalf, or directly to the consumer online, through pop up shops or both.
- How are you going to manage that
Finances
Once you’ve done that narrative of the business plan, put together your financial forecasts
- What your start up costs are going to be
- Your ongoing costs
- A cash flow forecast
- Your profit and loss
These are all the boring things that people hate but they are absolutely essential because you have to have control of the budget and your finances.
Cash Flow and Start Up Costs for a Fashion Brand
- The biggest cost will be your sampling and development to create new patterns, styles and prototypes. It will depend on what you can and can’t do yourself, and how much you have to outsource.
- For a fashion item or jacket you’ve got to budget between £500-£1000 for each new style.
- If you are working with a manufacturer there may well be a minimum order quantity that you need to factor in.
- Budget how much you will need for your initial stock.
- There’s other costs in terms of branding and fantastic imagery. More important than the website itself is the imagery that goes on your website – this is what is going to attract interest.
- Then there’s extra bits and pieces like trademarking.
- Your two biggest costs are going to be manufacturing and marketing.
How many items do you need in your range to launch as a new fashion brand?
You want to test the market first and get some feedback. Launch with the minimum amount you can, for instance half a dozen shapes, and find out what your customers respond to.
You can always start with one key product that you get known for, and then expand your range. For instance Oliver Brown, started off with high end swimming trunks and is now an extensive menswear and lifestyle brand.
A lot of people are under the misconception that they have to launch with a big fashion range – the thing that needs to be all singing and all dancing is the marketing.
Would you recommend pre-orders for new fashion brands?
Pre-order is a popular option for many brands, as it will minimise the risk for them, and you can have some success.
However it is tough when you are new and not known as a brand. It is easier when you have already cemented your reputation. This is why it is so important before you start your brand to start talking about your core values and building your community around those values. When you launch you already have a following built into your ethos who are more likely to preorder if that is your route or when you launch.
Building a reputation and community is the key to successfully doing pre-orders.
What should you consider if you want to build a sustainable fashion brand?
Consumers have a higher demand for sustainability and transparency. As a new brand you need to take this into consideration, but also factor in that if you are going to be a sustainable brand your costs will be higher.
Although prices may decrease as demand increases, the cost of raw materials continues to go up, so they will remain a more expensive option.
The other challenge is some of the fabrics are hard to get hold of because of limited availability. Often as a designer you have a particular idea of how you want something to look, but then struggle to source it.
Hopefully as more investment goes into this market, the choices of materials will increase.
Where can you seek funding for your new fashion brand?
- Many people start out asking family and friends. Then you have various debut funding options, such as loans from banks.
- Fashion Angel is a delivery partner for the Government Start Up Loan scheme – which offers competitive interest rates, good terms and business support. Unlike most loans you are not tied into anything, you can pay it off at any time, and there are no penalties to pay for exiting early.
- It’s a good bridge to give yourself traction, before seeking equity investment from business angels. Most angels won’t want to go in new with their money, they want to see a proven concept, which you will have at this stage.
- In the UK there is not a lot of grant funding, but it is worth looking to see if you can find anything regionally, e.g. on council websites.
- Sign up to the Local Enterprise Partnership for your region, as they will know if there is any local funding available.
- Enterprise Nation are another great source of information on funding
- There are more grants available if your focus is on sustainability and the circular economy.
- Keep an eye out for competitions, things can pop up where you get to pitch and win a chunk of money.
- If you are in Ireland, the Irish government has a lot more grants, and your local Enterprise Ireland office will be able to help
What support is there for new fashion brands looking to export?
Get in touch with the Department of International Trade. Most funding comes through them. The funding itself has been reduced, and tends to be focused on larger business, but they can help you with research.
The UK Fashion and Textile Organisation can help you prepare for showing at overseas trade shows, and will have representatives there to support you.
What are the main advantages and disadvantages of manufacturing in the UK vs manufacturing abroad?
In an ideal world most people want to manufacture in the UK if they can because:
- It’s easier to control
- High quality manufactures
- Minimum order quantities are likely to be lower
- Turn around time is quicker
- You don’t have all the expensive transportation costs
- If you are exporting, especially to the Far East & the USA, Made in the UK adds value to your brand, and people are prepared to pay more for it
However sometimes it is not practical to manufacture in the UK
- It is hard to find manufacturers for products like lingerie, jeans & footwear, so you may have no choice but to source overseas
- Labour is expensive in the UK – which increases your costs
Always do a proper cost analysis. You may think you are getting the product cheaper from overseas, but all you have is the making price. Once you factor in the added costs of prototyping, bigger minimum order quantities, shipping costs and duty, the difference is not that huge.
If that is the case, I always recommend the less risky option which is to pay a bit more and manufacture in the UK, certainly at the beginning.
Which Trade Shows would you recommend for new fashion brands?
Investment wise, trade shows are not something you need to do straight away.
When you are ready, look for shows that you feel your brand and product will sit well with. Always visit the shows first to see if it is right, and talk to other brands to get some feedback. Ones worth looking at include:
- Pure
- Just Around The Corner
- Specialist shows for Lingerie, Bridal Wear etc if relevant to your product
Thank you so much to Alison for all her advice. You can access lots more resources and advice at Fashion Angel, and listen to the full podcast here.
I hope that this post helps you to continue on your journey to success and if you need any extra support then check out my free resources on my website, follow me on Instagram, subscribe to my monthly newsletter or get in touch at nicole@thebuyerandretailcoach.com
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