It wasn’t so long ago that if you wanted to start a fashion brand, or really any business for that matter, you had to take on a lot of risk. That included financial risk – from taking out a loan, borrowing from a family member or accumulating credit card debt. Thankfully, that’s not so much the case anymore – there is a way to launch a fashion brand without risking your savings and going into debt and that’s what I’m sharing in this episode.
Resources mentioned in this episode:
It wasn’t so long ago that if you wanted to start a fashion brand, or really any business for that matter, you had to take on a lot of risk. That included financial risk – from taking out a loan, borrowing from a family member or accumulating credit card debt. Thankfully, that’s not so much the case anymore – there is a way to launch a fashion brand without risking your savings and going into debt and that’s what I’m sharing in today’s episode.
Alright, so let’s lay out the problem first – most people don’t have $20,000 laying around to invest in the first production run of their fashion startup.
And even if you did have that much money saved up, you don’t want to invest it on a hunch that people might buy what you’re making. It’s not only risky for your own finances, but you haven’t taken the time to test the market first.
What I see people doing (who aren’t in the Factory45 program) is investing time into design and product development – forgetting about the marketing – and when they go to launch they have no one to sell to.
Do not invest your life savings based on an assumption – this is the fastest way to go into business debt and stop you in your tracks before you’ve even really started. PLUS it’s not necessary… there is a way to test the market, and raise money before you create inventory.
So, how do you do that? How do you reduce your own financial risk, test the market and raise money to go into production? All at the same time?
What is a pre-sale? I go into this much more in my free workshop (and I’ll post a link to that in the description if you want to check it out) but pre-selling allows your customers to pre-order from you based on photos and video of finished samples of your garments.
This can be done through a crowdfunding campaign (like Kickstarter), an ecommerce website (like Shopify) or a virtual pop-up method through Instagram that I teach in Factory45.
A pre-sales campaign (and it doesn’t really matter which platform you use) allows you to test the market and raise the money from your customers to pay for production.
This is also obviously a win from a sustainability perspective because you’re not creating inventory that you don’t know you’ll be able to sell and will end up sitting in your basement or a warehouse and then eventually, a landfill.
When you pre-sell and raise the money upfront, this ensures that you aren’t overspending on production of extra inventory you can’t sell. Which also means you aren’t taking on debt.
I know what you’re probably thinking… what about the money you need to even get to the point of launching a pre-sales campaign.
There are two ways to approach the pre-launch expenses
1.) Allocate a chunk of savings ($5-10K) and create a budget so you know how you’re going to spend that money – could be a tax refund, a portion of your savings account, a gift from a relative, an end of year bonus from your “real job”
2.) Go slow and set aside a certain amount of money each month – can you look at your personal expenses and see where you may be spending money from your disposable income that could go towards business expenses.
- For example, what you spend on dining out / going out
- what you spend on clothing or beauty products
- even opting out of the $5 latte every weekday and drinking the office coffee can add up to savings to invest in your brand
- Maybe you start taking public transport instead of a Lyft or Uber
You can also look for grant opportunities along the way and I have a separate episode that talks about how much money you need to start your brand, which we’ll link to in the description below.
If you want to dive deeper into pre-selling and what it could like for your launch, make sure to check out my free 1-hour workshop that will teach you how to raise money for your fashion brand without risking your own savings, taking out a loan, pitching investors or going into debt. The link is in the description below or you can go to http://factory45.co/sustainable-fashion-event. Thanks for listening and I’ll see you next week!