The Basics | Part 1 – Setting up your own fashion business: What do I need to know first?

Backstage at Christopher Kane's S/S 2013 show | Photo: Morgan O’Donovan

Backstage at Christopher Kane’s S/S 2013 show | Photo: Morgan O’Donovan

The Business of Fashion is getting a lot of play of late. At the recent CFDA/Fashion Fund awards in November, Marc Jacobs spoke at length about the ups and downs (and downs) of starting a new fashion business. Many young designers rush into setting up a business, attracted by the perceived glamour and fun that is associated with the fashion industry. There are wonderful fairy tale stories of young talented designers graduating from St Martins or Parsons and then going off to achieve fame and fortune. The stories we hear less of are those that describe all of the failed companies and dashed hopes that are the cruel reality of this industry. I am glad that Marc shared his stories with some of the upcoming stars of American fashion who were in the audience, including Doo.Ri Chung, Proenza Schouler and Peter Som.

One of the most common questions I am asked by designers who have just come out of fashion school (at both the bachelor’s and master’s level) is: “Should I start my own business or should I go work for a big fashion house?”. The truth is, the right answer depends on you and your aims. In our first article on the Business of Fashion Basics, we will pose the questions that you need to ask yourself – so you can make the right decision.

The first thing to think about is “Do I really want to run a business?”

Beautiful people, fun parties, flights of creative fancy – what more is there to want from a career? Here’s a reality check: it’s not as glamorous as it sounds. Running a fashion business means that packing boxes at 2 am, steaming clothes over and over again, and pouring through receipts with an accountant will become part of your routine. You will likely spend less than 10% of your time designing, while the rest of the time you will be managing production, sending clothes to magazines, dealing with suppliers who want their money (now!), begging Anna Wintour’s assistants to grant you a meeting, managing your employees while hoping they don’t fall ill, and trying to eat and bathe in between. On top of all that, you have to worry about making enough money to declare some kind of dividend from the business for all your hard work. You will eat, live and breathe your business 24/7. If that doesn’t turn you off, then keep reading.

Starting any kind business requires tenacity, endurance and dedication. Setting up a fashion business is all the more challenging because this is a hyper competitive industry (who doesn’t want to be a fashion designer these days?) and a very complex one as well, even at the smallest of scales. What other kinds of start-up businesses so quickly find themselves with customers and suppliers scattered around the world, requiring so much coordination and organization? Managing to get all of your raw materials (fabrics, trims, haberdashery, etc) all to your manufacturer at the same time to start your production and then sending it all out to stores in different corners of the world (each with their own customs procedures) in only 2 months can be a nightmare, even for those with great forward planning and troubleshooting skills.

All of this is to say that one of the key drivers of success will be your entrepreneurial skills and your commitment to running a business. In order to be successful, you should think of yourself as a CEO first, fashion designer second. A CEO is a manager of people, finances and processes. Therefore, you will have a great deal of responsibility and important business decisions will face you each and every day. The buck stops at you and the business should always be at the forefront of your mind, not just an afterthought.

For some people this is an extremely exciting and energizing situation to be in. For others, it is their worst nightmare. What kind of person are you?

Next, you should ask: “Do I already have or can I find the necessary skills, contacts and funding to create a successful fashion company?”

Clearly, you won’t be able to do absolutely everything yourself. This is where you need to find other people who believe in you to join your team or provide support in some other way. Doing a self-assessment of your skills and abilities will tell you what gaps you will need to fill in order to make your business work.

You may assume that having completed a design degree, there are no skill gaps there. However, the design process in a business can often feel very different to that of the design process in school, where you don’t have to worry about things other than the product. Running fashion business means developing and following an organized creative process that works for you – and that other people can work to as well. One of the great things about designers who have previously worked in a large fashion house is that they have seen how other people organize themselves and can take lessons from there as they start. Having a clear design methodology is crucial to getting the best out of your abilities. If you don’t have this in place now, perhaps you may want to spend some time learning from someone else first.

Apart from mastering the design process, something that some of the smartest designers do next is to find a business partner they can trust, who brings different skills and connections to the table. Often it is a spouse (Patrizio Bertelli is married to Miuccia Prada), sibling (Christopher Kane’s sister Tammy runs the business) or a friend (Marc Jacobs has long time business partner Robert Duffy) who might take on this role. In this way, not only do you have someone to lean on in times of difficulty, you also have a division of roles, which allows you to focus on more on the creative aspects of the business.

You will also need to find people in the Industry who agree to support you and work with you. You’ll need a PR who will (at least initially) give you his services for almost nothing and a factory that will make your clothes in small quantities. You will also need accountants, lawyers, stylists, photographers, graphics designers, production managers and interns – hopefully all at discounted prices. You therefore need to ask yourself if you already have a set of contacts which you can leverage to make your business work. If not, you need to get out there and meet people so you can start your business on the right foot, with the right team behind you.

Finally, for most designers who haven’t come into an unexpected windfall inheritance in the millions, starting a business is also a question of finding money. There are many sources of funding, but each source will take time and effort before it bears its fruit. Family and friends who believe in you are obviously one place to start, but you will also need to deal with bank managers about loans, and think about taking on investors as well. Having a network of people who may be able to introduce you to potential sources of funding is imperative to setting up your business. You can have a brilliant business concept, a fantastic team, and all the energy in the world, but without funding in place from the start, it will be difficult to get up and running. You should also do research on grants, sponsorship and awards that many organizations make available to nurture new design talent.

Lastly, you should ask yourself: “Do I have something unique to offer the market?”

If there is one crucial thing I recommend that you do before rushing off to start a business, it is to carefully craft your business concept. What is it about your business that will be unique? Why will people choose to buy your product over someone else’s? Is it the design, the price, the value or the dream that they are buying into?

You will need to think carefully about who you are designing for. It is cliché by now, but I almost always ask designers when I first meet them: “Who are you designing for? And why?”. Most of the time, this simple question is met with groans or blank stares or platitudes like “I design for me and my friends” or “A very glamorous woman with lots of money”. This is not enough. You need to get into the mind of your customer and understand what motivates them. Where do they spend their time and for what occasions will you dress them? What makes them buy a garment? Understand their psychology, emotional needs and relationship with clothing. Visualize all the aspects of their lives and assess how your business can blend into making them even better.

It’s worth pointing out now that not all fashion businesses have to operate at the high end of luxury, although it seems that that is where every designer wants to be. Remember, your business concept needs to offer a clear proposition of value to your customer, and that value could be world-class design at more reasonable prices. Look at Zara or H&M or Coach or American Apparel and how they have taken clear business ideas that allow them to deliver great fashion to the masses. While it may seem ideal to be a “luxury” brand, also remember that some of the most influential fashion businesses are on the high street and in your neighbourhood mall, because they dress thousands of people around the world.

Next time: Writing a Business Plan

Assuming I haven’t completely scared you from starting your business, our next article will go through the process of writing a business plan and why it is so valuable. In short, it will help you to raise funding, to clarify your vision, and to set a roadmap for how to get there.

This is the first in a series of articles on the Business of Fashion: Basics

• Basics 1 – Setting up your own fashion business – what do I need to know first?
• Basics 2 – What is a business plan for and how do I go about writing it?
• Basics 3 – How do I find the right investors and partners?
• Basics 4 – How do I decide where to allocate my capital?
• Basics 5 – Design and development
• Basics 6 – Sales
• Basics 7 – Production
• Basics 8 – Marketing
• Basics 9 – E-Commerce

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37 comments

  1. cool site..:)

    Donna from Downey, CA, United States
  2. This is the best fashion business university I could attend- first hand knowledge from professionals in the industry. Couldn’t get more realistic than this! Information provided here is really priceless and extremely usefull for people/orgnanizations like mine that are infants in the fashion industry.

  3. this website helped me start my own bussiness ( old navy )

    james from Rome, GA, United States
  4. very useful information indeed!!!! some very valuable tips were provided. its a very well written article!!!

    madiha from Abu Dhabi, Abū Z̧aby, United Arab Emirates
  5. this article is great it has put me in perspective i know i’m to young to want to start my on biz but at least i have a clear direction

    moha from Lithuania
  6. hey am 16 and i live in St Louis i have a eye for fasion for bout long time i find myself drawing nice thing on paper and will really like for one day for it to been seen on people do you have in advice for me

    tyricha minnis from Hazelwood, MO, United States
  7. Very brilliant. Its working for my new fashion label (T.T.DALK apparels,footwear & accessories)

    Temilade Osinfade from United Kingdom
  8. You hit the nail on the head. Too many people go into business and think it will be fun and game or they enter for the wrong reasons. One may have the skills, but there are so many parts one must master or get someone to do it for you.

    At the end of the day the help goes homes . You will be there with the headache.

    I think you did an outstanding job of getting us started on the right foot. Business is great, but it is not for everyone and you made that point clear

  9. Great articles! I’m interested in starting my own business and was wondering if you could recommend some additional resources. I’m interested in setting up an online retail business (à la net-a-porter) but not sure how the business model works. Any suggestions on where to start?

    rg from United Kingdom
  10. Great articles!! The Information provided here is extremely usefull for people who all ready have their own business too. it refresh my vision .tks!!

    Andreina Neri from Caracas, Distrito Federal, Venezuela
  11. very helpful article…I’m in the inception phase of opening my own boutique in the style of Colette or the Dover Street Market, and am wondering if you have any advice that would be specific to how those stores operate?

  12. this is probably one of the new title I’d latch onto this list after a drought of personal inability to really like a show–basically it’s not to say there haven’t been great shows to recommend others between 2004 and 2007, but this one manages to strike a chord in me that elevates it above others. It’s a feel-good high school affair with a lot of heart. If you can cut through the cutesy loli (or rationalizes it away), there’s a gem waiting for you.

  13. thanks for the info.
    basic knowledge to start my (future) clothing business. *hopefully

    bbs from Indonesia
  14. Love this website, Ive been working in Fashion for years and agree with this article completely :)

    catherine from Venice, CA, United States
  15. Dear Imran,

    The above series of articles are wonderful and extremely beneficial.
    Awaiting articles from basics 5 to 8.

    Thank you.

    gideer from Cairo, Al Qāhirah, Egypt
  16. This is exactly what I’ve been looking for but could not find it all in one place. Thank you!

    S from Scottsdale, AZ, United States
  17. For avoiding risks your fashion business may face everyday, you may rather order small orders at the beginning. For instance, take a min to look at vonstyle.net 100% fine fabrics & OEM w/ labeling service is accepted You can ask for a new design with own clothing sample & they’re able to manufacture only with drawing of the design. Start small if you really want your own fashion business

  18. As far as funding is concerned, it comes down to finding people who understand the clothing and all related industries.. PERIOD! I have breath taking line of fashion sneaker and much more and I have not been able to find penny one! I have a well written pan and management team with 30 years of knowledge and relationships. As a reference point the sneaker industry did over 27 billion in gross revenue and over 1.5 billion in the fashion sector, in 11 just in the US market alone

  19. I love this website, am so inspired!

    Uyai from Nigeria
  20. I often wonder what kind of person it takes to write about a topic for free just to help others. You are wonderful and kind for putting this out there for us. I’ve learned so much and now writing my business plan is easier than before I read your articles. God bless you and thank you :)

    Veronica from United States
  21. Grt article,,,,need to know more about fashion pros and cons ,,,so that it would help me to plan accordingly..thumbs up:))))

    AANCHII from Delhi, Delhi, India
  22. Am a designer from Nigeria and i can tell u this article has so much content and indeed a brilliant way to kick off for young designers.

    Breeze36urban from Lagos, Lagos, Nigeria
  23. I own a fashion school as well as a fashion design business in lagos Nigeria,at the end of each students programme, I make sure I get them to understand the fact that its not going to be a smooth ride all the way.the illussion the media (Tv hyps,magazine spreads,radio and social network sites) creates around the fashion industry is such a fairy tail that if any young designer is not told the real truth he or she even with a lot of money might end up closing the business.I completly agree with this pice,in fact I think its one of the best I have seen that deals with this subject very well. Good job.

    Valerie,CEO Valisimo Fashions from Lagos Nigeria from United Kingdom
  24. Thank you for posting this article, it very informative and gives a thorough understanding of how it works, for someone like myself who’s hoping to launch an online fashion line soon, it gave me a good insight.
    Thank you

    Thanya from Prahran, Victoria, Australia
  25. Lovely article.,it gav me the go ahead spirit.nw i can see the steps to take and the picture of my dream.jimmy Nigerian

    Jimmy from Ashburn, VA, United States
  26. do you rally have to go to a fashion university and graduate there, just to launch a fashion show?

    jonzki from Cebu, Cebu City, Philippines
  27. I was thinking abt starting my own business in the fashion industry, after reading this I found out I have alot to learn…wasn’t planning on just jumping into it though, I just needed to know more..thanks for the heads up ;)

    Kiki Diamond from United States
  28. This article is so great, it really describes the reallity behind the fashion industry. I created my own clothing brand 2 years ago (Cuteandbroke.com) and I have to say that the hardest things was to find that good team to work with. One of the things that I have learned is to make baby steps in order to avoid big risks at the begging, so small production is the key!

    Anastasia from Athens, Attikí, Greece
  29. American Apparel? Please, American Apparel makes Walmart fashion looks like High class fashion.

    Dan from Calgary, AB, Canada
  30. I could really use all the advice given to start my clothing label please contact me back with any information to doing so. Thank u sincerely, Jackie

    Jackie Braico from Sweet Home, OR, United States
  31. wow…really helpful:D:)

    franks.A from United States
  32. We agree. Thanks MJ for stepping up and making it real. It is difficult and resources are hard to find if any at all. A couple of years ago, CFDA Designer Janet Howard and I created a company to facilitate the needs of those out there who wanted to take the risks. We wanted to take some of the sting out of it and create a community/design environment where designers could design and we do the rest… and advise and guide those who want to build a fashion business. Currently, we are looking into creating a fashion incubator on both coasts for designers and individuals wanting to expand into the fashion business. Please check out, we are the Martini Factory, LLC. (themartinifactory.com). Don’t be afraid to take a chance on your dreams.

    Kim Barbieri from Los Angeles, CA, United States