STEPS-TO-SUCCESSFOR CLOTHINGINDUSTRY START-UPS

PREPARED BYINFOCREST

JUNE-2016

INTRODUCTIONNo industry is easy to break into, but that is especially true about apparel. While otherindustries enjoy a 50 percent or higher business success rate after four years, retail andapparel do not. Indeed, a full 53 percent of clothing lines will fold by the fourth year’s end.

One reason for the higher rate of business failure is competition. New designs are abundant,and today’s in-demand style will be tomorrow’s forgotten look. Competition alone isn’t thereason many lines fail, however. Another significant reason clothing businesses have loweredsuccess rates is the business end itself.

Many individuals who launch clothing lines do so because they are artistic, yet theseindividuals generally are not entrepreneurs who understand how businesses operate. Beforelaunching an apparel line, individuals should consider the following six start-up steps.

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UNDERSTAND THE VALUE

Individuals aspiring to start a clothing businessmust have a clear view about the time and moneyrequired to start such business. Money matters a lotand you must consider a double of the estimatedamount before running a business.

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Sportsbikeshop founder James Mitchell attested tothis principle in a recent interview. “There is no way

one can escape the hard work - there will be touch ofluck, but being creative, hardworking and thinking

out of the box is what that sets the trajectory of yourbusiness.”

PLAN THE BUSINESSAny experienced entrepreneur knows a companywithout a business plan is like a fish without water.Initially it should include the:

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General Company Description.Products Overview.Operational Overview.Executive Summary.

Clothing line entrepreneurs must always have acheck of their plan and must update it regularly as

the business grows.

PREPARE FORMANUFACTURING

Knowing where to produce the clothing line is anextremely important decision. A small business maychoose to manufacture its products, but outsourcingshould also be considered.

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Although minor expenses are incurred in organizingthe business, manufacturing is the stage where

expenses really mount. . This initial investment willrange from a few hundred dollars to several

thousands, depending upon inventory and quality.

ESTABLISH A PRICINGMODEL

Making a profit off the clothing line is necessary to thebusiness’s success. Profit comes from making morerevenue than the fixed and variable costs combined.Examples include the price difference betweenmanufacturers or the cost to produce different apparelitems.

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To ensure profit, the entrepreneur must establishwholesale and retail rates higher than the expenses. Atarget for these rates would be to earn a profit margin

30-50% higher than associated expenses.

MARKETINGAfter the business’ essentials have been developedthrough previous steps, entrepreneurs should start toconsider the following items in their marketingstrategy.

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Build The BrandIdentify The Target AudienceCreate An Online Presence

Your marketing should be strong enough to attractmaximum customers. It should be really awesome to

hold the customers and make them your loyalties.

ANALYZE AND ADJUST

“It’s really about the loopholes that you leave open inyour marketing strategy, figure out where you arebleeding money, identify the bottle neck in your salesfunnel and eventually you’ll have a fine-tuned machine,"

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Efficiency is essential to the business’ survival. Afterlaunch, entrepreneurs should re-examine their

business model to ensure the company is meetingprojected profit estimates or not.

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