Launching a business requires creativity, passion, dedication and funds. Fashion is no exception.
Finances can make or break your fashion business. Therefore, before you get going, take into account the following factors to determine if you have adequate funds for managing your business:
First off, what is your investment threshold? This is the minimum investment return you are expecting to make.
When setting the threshold rate, make sure it is realistic. Compare the figure with other designers’ investment threshold rates.
Once you have set a final number, include a margin of error for unanticipated expenses that will come up.
Next step, you need to figure out your risk tolerance. In other words, how much risk are you willing to take and withstand?
Make sure you figure out a risk tolerance level that you are comfortable with. Performing an in-depth analysis of your finances is an effective way for establishing a realistic risk tolerance level.
Spending vs. return
Finally, how do you want to spend your finances? Think long and hard. How will you invest your financial resources?
For example, do you want to invest most of your money money in the design of the product, in stocking inventory, in advertising and PR, in your webite? Knowing the key drivers for your brand will make the budget decision-making process much easier.
Along with your expenditures, you need to have a clear idea about the return timeframe. After how much time do you expect to generate returns on your investment?
Whatever your timeframe is, check in with yourself every few months to assess your progress.
Of course, it goes without saying that tracking your expenses and being disciplined in your decisions are all parts of smart financial management.
For more information on fashion designing, manufacturing and management, check out our blog.
Lefty Production Co. is a leading design house, garment and accessories manufacturing company in Los Angeles.
The company specializes in the design, development and production of apparel and accessories, including women’s wear, men’s wear, children’s wear, bridal wear, athletic wear, swimwear and bikini, lingerie, handbags and accessories.
Their services include fabric and trim sourcing, pattern making and sample making, cutting, sewing, finishing, grading, marketing and more.
Lefty Production Co. works with domestic and international clients of all sizes. Get in touch now to learn more about their services.