By Salma Awwad
Tips for turning a creative flair into a successful business plan
People who join the world of fashion do it to pursue an innate passion, whether it is creative freedom, glamour, a certain lifestyle or the expression of a universe that they strongly believe in.
But there’s a flipside to all the razzle dazzle that designers seldomly enjoy, let alone master: The hard numbers and business acumen are what make up the core of any successful business, especially in such an ever-evolving, highly-demanding, trend-based industry.
Just take a closer look at the lives of our iconic fashion designers and you’ll clearly see that many of them have a business counterpart, who is a major entity in their everyday lives.
Giammetti ran the business side of Valentino’s fashion house for 40 years, while Pierre Bergé was the devoted business partner of the legendary Yves Saint Laurent.
That is because these masters of their craft wanted to dedicate all their focus, time and energy on what they do best: designing.
But what if you don’t have the liberty to outsource such tasks and you have to buckle down and tackle the dryer side of this business?
We sat with New York City-based fashion consultant Yolanda M Wardowski to help us answer this question.
With over 15 years of experience in mergers and acquisitions, corporate finance execution and strategic advisory experience, she joined the third season of Dubai’s Fashion Forward to discuss the key components of a successful business plan for an emerging fashion business.
Here are the hard facts for fledging designers keen to turn creative expression into a viable business venture:
1- Building a strong business plan:
A business plan should tell a complete story. It’s a way to communicate and clearly outline why you launched your business, what specific gap in the market are you trying to fill and your key competitive advantage. You need to analyse the market and the competitive landscape and provide realistic financial data with a detailed plan of action.
2- Developing financial projections:
Financial projections are broken up into three main components. First is the “balance sheet”, which reflects the company’s assets, liabilities and equity at a specific moment in time. Second is the “cash flow statement”, which calculates the cash-in minus cash-out over a period of time. And finally the “income statement” is the monthly or quarterly report that reflects profit over a period of time.
3- Raising capital:
There are over a dozen types of investors that you can approach depending on which phase of your business development you are in. From angels and seed funds to crowdfunding and venture capitals, most investors are looking for the same key components: strong passion and drive, a dream team which is committed to the company’s vision, a growth strategy and proven market consistency.
4- Determining distribution channels:
Department store sales have dropped significantly in favour of specialty and online stores. Assess your distribution channels in order to strike the right balance between wholesale and direct-to-consumer sales. Both have their unique set of advantages but as a start-up, having greater control and higher margins is essential.
5- Watching the fashion calendars:
Fashion weeks, trade shows and showrooms are the bread and butter of the fashion world. They also provide you with essential key selling dates that you need to strictly adhere to since fashion is all about timing. However, while trade shows can be an efficient method for selling multiple retail accounts, they are not for everyone. You need to look at your own unique business and its needs in order to determine which elements of the fashion calendar you will participate in.For all the latest fashion trends from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.