Every successful business has a plan – but business planning may not come naturally to you, especially if you’re of a more creative bent. Fashion industry expert Alison Lewy, founder of Fashion Angel and author of Design Create Sell, offers her business plan advice for creative start-ups as 2013 starts to take shape.
So why do you need a business plan?
Most budding entrepreneurs have heard of a business plan. However, many think it’s something you only need if you are approaching banks for a loan or are looking for investment. While this is true, your business plan is also your personal roadmap outlining your goals, visions and objectives and will be central to your business development. As time goes on, you will use it to measure your actual progress against your projections.
‘Failing to plan is planning to fail’
I can’t stress how important it is to have a strategy in place and to start a business plan at the beginning of your business journey. It is essential for any enterprise, but the diversity of product and customers in creative industries like the fashion industry means to have a chance of success you must be able identify where your product/idea sits within the overall marketplace. A business plan will help you think this through.
If you are a creative person this could take you out of your comfort zone but it doesn’t have to be tackled all at once – most plans take a few weeks, or even months, to build. As you go through the process, you will undoubtedly come across some problems you hadn’t thought of – by planning in advance you have the opportunity to think of solutions.
Much of the information going into the plan will be in your head so it’s a matter of articulating your thoughts and putting them down on paper to start with and, as it will take some time to pull together, the sooner you start, the better.
Tips on writing a business plan
Start by dividing your plan into the sections below and try and answer the following points within each section. There isn’t a hard and fast rule as to how long a business plan should be, but you should aim for one to two pages for each section.
Although this sits at the beginning of your plan, it’s usually something you do at the end, once the rest of your plan is more or less finished. It should be no longer than two pages, with just a couple of sentences summarising each section of your plan, as the finer details will be in the main body.
- An overview of the market segment you are moving in to
- The legal status of your business
- Describe your business – what are you going to design or make?
- Mission statement – in one or two sentences, state your personal vision for the business.
- Who is your target market?
- Are you filling a gap in the market, or have you found a solution to a problem?
- What about your designs and/or concept – is it different from those already in the market? In other words, what is your Unique Selling Point (USP)?
Sales and marketing
- What is the size of the market that you are going in to? Is it a growing market?
- Who are your competitors? What is your competitive advantage?
- Have you identified a clear niche?
- Is your brand identity easy to distinguish?
- How will you get wholesale buyers or retail customers to find out about you?
- How will you build brand awareness and attract press coverage?
- What is your background and your role in the business?
- Is there anyone else involved in the business and, if so, what are their roles?
- Do you have any other support structures that can help such as a business mentor or accountant?
- What additional staff or expertise may you need to operate successfully?
- Where will you run your business from?
- Are you going to need to invest in any special equipment?
Production and sourcing
- How and where will you get your product made?
- Can it be produced at a competitive price point, suitable for your target market?
- Where will you source your raw materials from – for example, materials, trimmings, fittings?
- How much money will you need to get started? Think about how much your sample collection will cost to produce, including fixed overheads and ongoing costs. If you’re projecting sales orders at a certain level, how much finance will you need to produce your orders? You will need to include profit and loss projections and a cash flow forecast.
- Can you obtain this money, either from friends, family, savings, bank, or any other options?
- This stands for Strengths, Weaknesses, Opportunities and Threats and is a useful exercise to self-analyse your business.
Remember, a business plan is not a static document; it needs to be amended as your business develops and changes so worth reviewing at least every three months or so.
The key when approaching anyone you want to borrow from is to make sure that your business plan is credible. The financial section is absolutely critical to your plan as it will identify your projections for how the business will grow – in terms of both profits and income – and what financing you will need to make that happen.
StartUp Loans for young entrepreneurs
The good news is that if you are between 18-30 you may be eligible for a £2,500 loan and FREE business mentoring with Fashion Angel under the Government’s StartUp Loan scheme. To find out more, just email firstname.lastname@example.org and we’ll send you an info pack and application form or visit Enterprise Nation’s StartUp Loans page.
Buy Design Create Sell from £5
Design Create Sell: A guide to starting and running a successful fashion business will lead you through all of the issues involved in setting up a small fashion enterprise. It’s available as a print book or a downloadable ebook from the Enterprise Nation shop.