Why do new fashion businesses fail?

By Maria Pesin | Fashion , Productivity , Vibe Consulting

I have read that the number one reason new businesses fail is lack of money.  I believe this is true.  But there is more to the story than not having enough money.  Lots of times they do have money.  There have been many entrepreneurs that I have run across who have told me they spent $50,000, $100,000, or even $200,000 and they have nothing to show for it.  So they really did have enough money to, at the very least, start small and then build from there.

So what is the problem?  As I see it, it is two fold.  One reason is many emerging designers just don’t know where to start.  Their beginnings are somewhat chaotic as they jump from task to task without a plan.  They don’t even know who their target customer is.  Or they think they do but haven’t done any research to insure that they are right.  They do step 5 before step one. I have even seen people spend years on their brand and yet haven’t had any sales because they make it the last priority.  One entrepreneur I know put $1 million of inventory in his warehouse before he even started to think about how to sell it.

Another issue I see is brand owners who spend their money on ineffective marketing.   They jump around trying a little of this and a little of that.  I had one client spend $50,000  a fashion show in Europe yet sold no stores and had no plans to do so. And how many people do one $10,000 trade show with no orders placed, not realizing that it is a building process and takes many shows before they see results.  Or they try to do so many things but do not consistently pursue a few targeted strategies that will ultimately build results.

Yes, not having enough money makes it hard to be successful but spending what you have unwisely is the biggest culprit of all.

How Long Will It Be Before My Fashion Startup is Profitable

By Maria Pesin | Vibe Consulting

Lets see, let me get my crystal ball…uh…the spirits aren’t sure.  Even they don’t know when a fashion business will start making money.  Let’s face it, the answer to this question  depends on many different things and since each business is unique it’s hard to know how much time you will need to prepare before you can actually start selling.  One thing that every entrepreneur should know is it takes time before you start making money.

Making a business plan will help you come up with the time it will take you to become profitable.  While a business plan is not a seer of the future, understanding your profit numbers and creating a break-even analysis is an important of your business plan that will give you some idea of when you will be profitable.   As a start up company developing break-even analysis, a profit-and-loss forecast, and a cash flow projection will help you understand what you need to do to reach the goal of making money.  Having an aggressive sales and marketing strategy will help it be quicker.

I find nothing sadder than a business owner pulling the plug on the business just before it starts making money, because they ran out of steam or worse money.  Having a business plan in place gives you a blue print for how to run your business.  It helps you figure out how much money you will need to run it plus an idea for when it will start making money.

Because I know how valuable a business plan is I developed a business plan template specifically for the fashion industry.  Click here to purchase the plan.  Believe me it if you are starting a fashion business it will be the best $97 you will spend.  If you do purchase it contact me and I will review it and give you my critique for free.

Why Branding Is Important In Fashion

By Maria Pesin | Vibe Consulting

Do you have favorite companies that you like to buy from?  Do you lust for a Prada handbag, or jeans from 7 of all mankind?  Or maybe you just really like Old Navy’s T-shirts.  That is the power of branding.  When people love your brand, they seek you out.  They also will pay a premium to get your product.

But what is branding?  Branding is all the effort we make to create a to create an impression we want our customers to have of our products. Brand building is the biggest lever most companies have to improve profits and create a demand amongst our customers. Most retail buyers seek to buy from companies that have strong consumer recognition.  They understand the effectiveness of branding.  If you want to create leverage with an account you must make your brand so compelling that they have to carry it in their store.

Brands that stand out from the crowd do so because they intrigue people, are memorable and different. Compelling brands are relevant, have strong brand stories, and have a consistent style. They stand for or against something and have a unique proposition that differentiates them from the competition. People remember compelling brands and know what to expect from them.  It’s like finding a McDonalds in China.  You know what the BigMac is going to taste like even though the restaurant you’re in is 6,000 miles away from the one you usually go to.

Creating a consistent brand experience is critical to establish your identity and engaging your customer. There is nothing better than a shopper coming to a store and asking for you buy name.  That level of demand brings equity to your brand.  It makes it more valuable and helps you compete more successfully in the marketplace.  So spend the money it takes to build your brand, as it is money that is well spent.

Is Your Social Media Telling A Story?

By Maria Pesin | Business , Digital Marketing , Vibe Consulting

Have you ever noticed that some fashion brands post random photos or messages that mean nothing to the brand and have no cohesion?  It is as if they have no idea what to post and do it just for the sake of doing it.  Or they post what looks like a series of ads with no personality. Big mistake!

One of the biggest ways social media has impacted marketing is by giving companies the ability to tell their story.  That is what makes marketing on social media so great.  By using brand storytelling marketers are able to give personality and associate emotion with a brand. By combining the power of storytelling with social media, brands can create a personal connection with the consumer.  People relate to stories and customers like to do business with companies they relate to.

Effective brand stories must communicate the essence of the brand. They must be unique, truthful, striking and interesting enough that people want to engage and share, and of course eventually buy the product.   They shouldn’t be self serving but must be meaningful to audiences.

As marketers we have to think as people connecting with other people as opposed to businesses selling to consumers . You should use powerful imagery that is relevant and personal to your brand. Storytelling is most effective when it’s personalized but use personal images as stock images will never do your brand story justice.  Videos are also a terrific tool to build your following.  Think of an active brand that shows a short video of certain yoga moves, or a lingerie company that illustrates how to fit a bra. This is a good way to engage.

With the growth of social media, a storytelling approach to building a brand is critical. We know that stories are relatable and helps make connections, which is basically what social media is for.

Are you selling enough brick and mortar stores?

By Maria Pesin | Fashion , Sales

Does Making Ethical Fashion Impact Your Sales?

By Maria Pesin | Business , Fashion , Vibe Consulting

First off, what exactly is ethically produced fashion.

According to Ethical Fashion Forum “ethical fashion represents an approach to the design, sourcing and manufacture of clothing which maximizes benefits to people and communities while minimizing impact on the environment.

“If you describe something as ethical, you mean that it is morally right or morally acceptable.” Collins English Dictionary

For the EFF, the meaning of ethical goes beyond doing no harm, representing an approach which strives to take an active role in poverty reduction, sustainable livelihood creation, minimizing and counteracting environmental concerns.”

Ethically produced fashion matters to consumers.  In the US more and more people are becoming more socially conscious.  As a human beings, we are constantly bombarded with news of :  climate change, poverty, war, worldwide inequalities, shrinking natural resources and other challenges.  More people than ever before have woken up to the fact that we absolutely need to do something.   One of the ways people are doing something is by buying ethically made product.

In fact the consumer is so motivated to buy this way, “They will even spend 10 to 15 percent more on ethically produced clothing,” according to Marshal Cohen, retail analyst at NPD Group.

Social media is huge right now, and  consumers like to post about the brands they prefer.  Those that admire socially responsible businesses will discuss your brand and recommend it to others.  In fact this is a very newsworthy subject that can prompt writers to publish articles about your brand.

I speak to emerging designers all the time who are interested in making ethically produced fashion and have a strategy to do so.  One thing I make clear is that the product itself still needs to be right as well as ethically produced.  You cannot have one without the other.

Does Making Ethical Fashion Impact Your Sales?  I say the jury is in and that it absolutely can impact your sales in a positive way.

5 Ways To Increase Your Fashion Business Sales?

By Maria Pesin | Business , Sales , Vibe Consulting

Fashion entrepreneurs have one thing in common.  They always seek to grow their businesses.  They see themselves as a major brand and rightfully so.  While they may not necessarily want a billion dollar brand a $20 million brand can make them very happy.  So how do they do that?  Here is what I suggest.

1. Expand on seasons deliveries – I have worked with brands that do most of their business in one season.  For example a cashmere line that ships 90% of their product in the fall.  I have them add spring fabrications so that they can increase sales by shipping more for spring then ever before.  For brands that do business for fall and spring I have them add additional groups to ship in other months.
2. Grow your sales team –  Adding additional sales reps, both showroom sales and independent reps can make a significant difference to your volume.
3. Increase your marketing – Are you doing all you can to get your message out?  Review your social media, email marketing, retargeting efforts, and PR with an eye to expanding on what you are doing.  The idea is to create more buzz in order to drive customers to your site with the goal of internet sales or having them look for a store where they can buy you product.
4. Broaden your product assortment –  If you make sweaters, perhaps you can add some bottoms to work with them.  I have a tie company as a client and we added pocket squares.  I also have an activewear client and we added sports bras.  There are many natural adjacencies to product lines so just figure out what makes sense for your brand.
5. Rework best sellers – When I ran Jessica Simpson we had a coat that sold very well at retail.  Our first season we sold 500 units.  We took the body and reworked it by offering different lengths, different sleeves, changed the collar, and offered it in plus sizes.  We must have sold 50,000 units of that coat in all the incarnations and it always sold well at retail.

Are You Creating An Outstanding Brand Experience?

By Maria Pesin | Business , Fashion

What is a brand experience?  A brand experience is conceptualized as the sensations, emotions, perception, and behavioral responses evoked by brand related activities

Marketing is all about delivering  the kind of experience that you want to associate with your brand with each customers  interaction. The more compelling the experience, the more people take notice and the quicker you will build brand loyalty. In fact, the culture you create becomes your brand in your customers’ minds.

You must think about both the totality of the experience.  So every point that you touch a customer should be thought out to ensure  consistency across your various marketing elements.

This includes everything from customer service policies, to label and packaging; social media posts to advertising.  Think of going the extra mile.  Instead of just delivery a great experience think exception.  Don’t just make a happy customer but one who is surprised and excited.

I still remember the first time I ordered something from J. Crew.  It was a Father’s Day gift.  When I received the box and opened it up I was impressed by the packaging.  In fact so much so that I called my mother to tell her about it.  That’s the value of an outstanding brand experience.

Even though it isn’t a fashion brand I can’t help thinking of Disney as a perfect example of a brand experience done right.

“Years ago when the Pirates of the Caribbean attraction was being built at Disneyland, Walt Disney noticed that one of the construction workers on the project was from the Louisiana bayou country. The Louisiana bayou is the setting of the first part of the attraction.

Walt took the worker aside and walked him through the first part of “Pirates.” Disney pointed out details, they took their time, allowing the man to look around. Finally he asked the construction worker what he thought of it. Was it authentic looking? Did it remind him of the bayou country that he had grown up in?

“You know,” the man said, “it is good, but there is something missing. I just can’t put my finger on it.”

“Well,” Walt said, “let’s walk through it until you figure out what’s not right.”

So they started over again, and then they went back and did it again, each time allowing the man to look and ask Walt questions. Finally as they were passing through the bayou the man snapped his fingers.

“Fireflies!” The man excitedly proclaimed. “There ought to be fireflies in this swamp!”

Just a few days later, the swamp was alive with electric fireflies.” as told by Jeff Dixon in his post “Walt Disney Fireflies”

Walt Disney left nothing to chance when creating an experience.

Creating an outstanding brand experience is both a tactical and operational activity.  First you need to decide what you want to create and then put strategies in place to execute.  Remember to raise the bar high and create an experience your customers will brag about.

Why a New Fashion Company Urgently Needs a Business Plan

By Maria Pesin | Business , Fashion

There is so much that goes into starting a business.  Most new entrepreneurs don’t know what it entails.  They don’t even know what their first steps should be.  That is why I advocate for a business plan.  It is a critical step in increasing your chances of success.

Some people think business plans are a waste of time.  Their reasoning is nothing goes as planned, so why take the time to plan?  While that is true there is still an extremely  strong case for it.

A good business plan forces you to answer questions about what your business stands for, your market differentiation, marketing plans, etc.  It also helps you figure out the financials of the business. By making a plan you come up with the structure of your business and the strategies of how you execute.

If you don’t make a plan your business at the mercy of the way the wind is blowing.  Reactive as opposed to proactive.

While things will come up that you didn’t plan on or expect, you can always course adjust.  Which is exactly the best way to run your business?  Truthfully you don’t have a crystal ball so how can you possibly plan for every contingency.  But, plan you must.  Then as you learn what works and what doesn’t you can refine your plan

Since many of my clients have asked me for a business plan, I decided to develop one myself.  I have designed a business plan template for fashion brands that covers mostly everything you need to plan for (unless your business has more unique parts I might not have thought of.  At which point it is easy to add to)

All you do is fill in the template and out comes you business plan.  Nothing could be easier.

If you are interested click here.

The Value of Setting Goals For Your Fashion Brand

By Maria Pesin | Business , Vibe Consulting

It seems to me that new entrepreneurs are afraid of setting goals for their business.  They have no idea what their goals should be; so they either don’t do it or they set vague wishy washy goals.