Fashion Business Plan: Tips and Advice
A professional business plan is essential for all startups, because banks and investors usually consider it an indispensable prerequisite for obtaining startup loans. This is even more established in the fashion industry, and a good fashion label business plan often has very specific characteristics.
The focus of your professional business plan must be on the range of offers and the target group, because every label is aimed at a very specific group of people. The planned marketing strategy / market entry strategy is almost as important – it shows how your label is going to differ from the existing ones.
Fashion Business Plan: Creativity and Specifics
The concepts of creativity and innovation are essential to the clothing industry. Nowhere else do extravagance, money and eccentricity clash to this extent. You should keep this in mind his when writing your fashion label business plan. Too often people forget that fashion is not only art, but also a business. Sound business judgment, business skills and knowledge of the legal basics are essential.
If you have completed a course of study that provides one or more of these qualifications, you should list them in the clothing label business plan to set yourself apart from competitors.
Fashion Business Plan – Tips for Creating a Business Plan
Fashion Business Plan Tip 1: The Market at a Glance
It is important to list the relevant features and key data pertaining to the future fashion label (see also our informative articles on the topic “Market analysis / market research“). You should proceed from general to specific data in your clothing business plan / boutique business plan. You should start with the data and facts about, for instance, the fashion market in Germany: 60 billion in revenue per year.
Continuing to assume we are writing a business plan for the German market- if you want to start a men’s fashion label, you should define the market further. Go over the main aspects of the market for men’s fashion. Here you could mention that German men spend about €101 a month on clothes on average.
Fashion Business Plan Tip 2 – Target Group and Offer
The target group is one of the most important elements of a business plan and the fashion label business plan is no exception. What clients is the label aimed at? Businesspeople, young adults, or teenagers? These are all important questions that need to be analyzed and answered in order for the start-up to achieve success.
What’s more, demand plays an important role on every market. Your company must be oriented to the main prevailing market demand. Only then can you operate successfully and in the long term.
Fashion Business Plan Tip 3 – Competition
The fashion market is extremely competitive. There are countless large and small labels that offer very different products. Therefore, it is important to know your potential competition well. The strengths and weaknesses of the competition need to be examined very closely.
This means: learn from the good, improve upon the bad. Ideally, your new label will fill a gap. If this is the case, you should explain very well why and how your label can fill the existing gap. Your fashion business plan would be incomplete without this.
Fashion Business Plan Tip 4 – The Most Important Legal Issues
The most important legal issues should be considered within the business plan. The most important market constraints must be expressed and respected. This also applies to the fashion industry. More specifically, it is to be noted that there are certain limits if your products are going to be made abroad (for example on chemicals that are used in coloring). Import and export permits must also be obtained from the relevant authorities. In addition, a registration with the respective trade office is necessary.
Furthermore, your fashion label business plan needs to include information on the desired legal form. In Germany there are numerous types of company forms that differ with regard to the start-up costs, the degree of public control (for example, accounting obligations), the liability and the tax burden. As far as the choice of legal form goes, it is worthwhile to seek professional advice.
Fashion Business Plan Tip 5 – Marketing and Price Formation
The fashion industry is highly competitive and marketing plays a particularly important role to this end. You should give this aspect its due attention when developing a business plan. If you’re starting a fashion label, you need to express specifically why it should exist and how it will differ from the others. This is closely related to the target group. All marketing strategies must address the target group.
It also determines the price you will charge for the products of the label. Clothing for teenagers will be generally cheaper than designer products targeting financially strong women (ex. Louis Vuitton). The pricing strategy has to combine the maximum possible profit margin on the one hand and ensure affordability for the customer on the other. The lower the price, the higher the demand. If the label targets financially strong customers, you can set a relatively high price. This creates a feeling of exclusivity because not everyone can afford the label.
We hope that this short article has given you some good ideas for creating your fashion label business plan. In addition to the ideas in this guide, please check out our related article about getting start-up business loans and our business plan examples / finance plan templates. Should you need business plan help, our professional business plan writers will be very happy to assist you.
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