Thomasina R. Legend
Since COVID, it is uncertain how easy it will be for new fashion brands to gain investment. That is why bootstrapping is the buzzword in the world of entrepreneurship. The term is also used as a noun: bootstrapping means building a company from the ground up with nothing but personal savings and, hopefully, cash from the first sales. Here are a few ideas on how to bootstrap successfully:
D.I.Y means do-it-yourself. Analyse every task within your business and see if you can complete it yourself. Only outsource the 'needs must' tasks. This could mean calling in a favour or asking your friends and family for help. An example of a designer that practices 'D.I.Y' is Hanifa, whose seed capital was her tax refund. The Maryland-based womenswear label went viral in May after presenting its new collection on a 3D digital model. Hanifa saw more than double the usual online orders for a new collection in the weeks that followed. Another designer who did it herself is Sarah Blakely, the founder of Spanx, who started her company with just $5,000 in 2000. Her personal fortune is now estimated at about $1 billion.
2020 saw a boom in online learning (E-learning). The huge reduction in face-to-face learning forced everyone online due to COVID. E-learning means you can learn in your own time, enabling you to earn and study. Also, with most courses, you are being taught by an expert in their field. E-learning is an excellent option in educating yourself on all there is to know about the fashion business and how to run a successful fashion business and brand. There is no better time than now to take advantage of e-learning to up-skill and be knowledgeable about all things fashion business and branding.
The success of pre-sale is timing and how you choose to use this method. Producing on-demand collections doesn't work for every brand. It will work for those brands with a solid relationship with their manufacturer and a medium to short lead time (no longer than six weeks). To produce on-demand, here are a few ideas to make it successful:
List the best samples on your website and social media ahead of launch so that you can gauge reaction and interest from potential customers
Pre-sale only. This means you never place a lump-sum order with the factory; you only produce on-demand. This method will only work if you have strong customer service that quickly responds and takes good care of your customers. You also need a short lead time, i.e. less than six weeks.
When you sell out of an item, list the product to be bought as pre-sale while you place a repeat order with the factory.
Pre-sale is a great way to manage cash flow, as long as you deliver within the terms and conditions agreed with the customer. It can also help you reduce the risk of your business model by not investing in a lot of stock upfront - especially if you are new to the market. Only producing what is in demand is a great way to show your brand is sustainable. Since COVID, many fashion brands are using this method as a way to be seen as sustainable and a great marketing tactic. It means you're not overproducing and creating textile waste for landfills.
It is essential to reinvest every penny you make back into your business. As a fashion entrepreneur, don't expect to pay yourself a wage for the first year. Every dollar you make should be reinvested into the business. For every dollar invested in your brand, ensure you always focus on return-on-investment (R.O.I.) spend.
It is vital to reduce your outgoings where your living costs are concerned as much as you can. If you want to bootstrap your fashion brand, you need to consider all of your personal outgoings to support this investment. Bootstrapping is the process of looking at your monthly expenses and then looking at ways to reduce these and setting a monthly personal budget.
Research and Plan
Research and planning are crucial and should always be the first thing you do, no matter what. You must always know and be a hundred per cent confident and have the research to back you up that there is a demand for your product or service before you invest a dollar into developing your idea. You must also do the research - how do you know you have a niche in the market or problem to solve if you have not done enough research?
Image via Hanifa