Why You Need A Business Plan For Your Fashion Business
Many people falsely assume that a business plan is only for those businesses that want to raise funding or make an investor pitch. There’s no easy way to say this- the first person who needs a business plan, and will most likely use it extensively, is you!
As the adage goes, ‘failing to plan is planning to fail.’ So, a business plan is not just a spruced-up, fancy document that you rarely take out. It helps you determine exactly how you run your business, right from using your cash well to managing inventory.
Mind mapping ideas before creating a business plan
Here are some goals, apart from being an investor document, that a business plan serves.
A Communication Tool For Your Team: A business plan is a great way to show your team precisely what each person needs to do to achieve a very defined set of goals. Without a plan, most people don’t know where they’re heading. Worse, you’ll end up paying all of your resources without grasping why you aren’t getting any results. So, use a business plan to communicate your ideas to your team.
A Ready-reckoner Of Goals: Having a business plan means putting down goals and objectives in as granular a manner as possible. You can always go back to your plan and review if you’re meeting goals. If not, the plan serves as a guide to see what went wrong- was it your strategy, or was it execution?
A Flexible Calendar: One thing that all businesses, and young business, in particular, should remember is that no plan is set in stone. A business plan serves as a guide and allows you enough leeway to make adjustments based on the market from time to time. This is one key reason why a structure is essential. It is always good to make changes to a base template than to throw ideas around and let them stay amorphous.
A Guide To Inventory: In the first year of your business, when you have no past sales data to fall back on, a business plan serves as a projection tool to decide how much inventory you need. As you know, holding too much stock can block up your working capital, and having too little can cost you a sale. Projections obtained from a business plan are an excellent way to assess just how much inventory you need.
Cash Flow Management: Retail businesses need cash to procure inventory, to sell and to keep up sales channels, as well as to pay employees. In fact, a continuous supply of liquid money can decide how far you go into retail. Having a sound business plan helps you decide which months/years involve more spending so you can cut down on other costs proportionately. Likewise, a plan also enables you to determine how much of your profits should go back into the business, and under which head.
What does a good business plan involve? Broadly, it contains your executive summary, your vision and objectives, market potential and implementation plan over both the short and long runs.
As you can see, the headings in themselves are simple enough. However, filling them up with workable solutions is the real challenge. Most of the new fashion brands either turn to mentors or consultants to help give a proper shape to the plan. If you already have experience working in the fashion industry, consider seeking help in those areas that you are not yet entirely comfortable with.
Fuel4Fashion is a design, branding and technology consultancy for the fashion and apparel industry. We provide consulting and advisory services across design, business and IT processes to early stage and mid-sized apparel manufacturers and brands looking to grow their business with the help of smart sustainable management practices. Visit our website here and follow us on Instagram and LinkedIn for regular updates.