This is an important part of the initial steps you need to take before you get started on your business. Plan the expenses you will have for the first two years and play it safe by adding at least 10% to the overall number and plan on having that money on hand for when you get started. One of the main reasons why new businesses fail is they run out of money. The worst thing is to put all the time and money into your business only to close it before it starts to turn a profit. Obviously the more money the better off you will be. But, at least you should have what I suggest.
Unfortunately your predictions are not always reliable, largely because businesses need to make assumptions about the future and no one has a crystal ball. Also you are not sure if you are going to have sales in the first two years. That is why I recommend that you plan your expenses high. Do a lot of research before you start. And hire someone with the expertise to help you in your planning.
Most fashion start ups are self funded. There are other possibilities where you can find cash besides your savings. Person credit, family and friends, crowdfunding, a bank loan (difficult to obtain when you are new, they might ask you to put an asset like your house before they give you a loan), venture capitalists, and angel investors.
Whatever you choose remember a few things. You will have to pay back whatever you borrow. Investors will probably want a part of your company. Bank loans are sometimes too expensive to be worthwhile.
Maria Pesin knows fashion, especially the business side of the fashion industry. Do you know how Manolo Blahnik got his start in the industry? How he leveraged a paltry 3 grand into one of the world’s most famous luxury brands? While she doesn’t take credit for Manolo’s success, Maria has walked a similar path on numerous occasions. The world of fashion is not silicon valley, and it has nothing to do with Madison Avenue marketing. In this industry there is ALWAYS room for something new and exciting, but you have to have your ducks in a row. If that’s what you need, believe me, Maria is the General Patton of fashion ducks!
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