How To Create A Clothing Line Business Plan - w/ Template
Before you can get started on your business plan… Have you set up your clothing line budget? If not, check out this article. Once your budget is set, come back to here and get to work on your clothing line business plan.
But, before we get started
Have you heard about the super secret document that everyone in the fashion industry uses, but no one is talking about? Probably not. That is because you can't find it on Google or Instagram (believe me, I've tried).
It's a form I have used for over 13 years at every job I have ever had. Literally everyone from brands to fabric suppliers use it, but you can't find it anywhere publicly.
The best part? It can cut your sourcing time in half, and save you tons of money in product development! This is the kind of info consultants charge the big bucks for. And, I'm giving it away for free until the end of the month.
So, get ready to make fashion startup life a whole lot easier, and GRAB YOUR FREE DOWNLOAD OF THE NOT-SO-SECRET SOURCING DOC HERE
What this article will cover:
- Executive summary
- Company overview
- Marketing strategies
- Sales strategy
- Competitive analysis
- Production plan
- Operation plan
- Financial analysis and projections
Now, Don't Skip This Step
A clothing line business plan is a crucial (and often forgotten step) that is needed for creating a clothing line. The plan will help you define and streamline both your long term and short term goals. It will also help you set a path to reach those goals. Not only does a business plan help you by setting a road map, but it also shows suppliers, investors, and other businesses that you are serious about your company by having a profitable plan of action.
As a bonus to this guide, I use my brand, virtue + vice, to give step by step examples, and show you how it's done. And, there's more, I have a free downloadable template to help you get started!
A Business Plan Is A Living Document
One of the most common mistakes I see founders making is that they will write their business plan, launch their product, and then never look at it again. Please don't do this. A clothing line business plan is a living document. You should use it to check in with yourself and make sure that you are meeting your goals. You can also make changes to it as your business changes.
As we all know, we can plan, and plan, and plan, but we can not plan for the chaos of life happening. So, as situations change, go back, update your plan, and re-strategize.
Keeping your business plan handy even after your launch will set you up for accountability and success.
Lastly, before we get started I am going to warn you. Making a clothing line is a lot of fun. But, it's also a lot of work, and (unfortunately) writing this business plan is the work portion of the job.
How To Write A Clothing Line Business Plan
Some business plans for fashion brands are extremely long, repetitive, and in my opinion kind of convoluted. They are a lot of words, that sound fancy and business-like, but are kind of just saying the same thing over and over. That is why I am keeping this short and brief. I have heard of people spending 6 months to a year working on a business plan. That is far too long. A month is enough - just keep it simple and don't get carried away with jargon and corporate speak.
So, let's get started.
Sections 1 + 2: Executive Summary and Company Overview
An executive summary and company overview are basically a recap of your overall business plan. While they are the first section of your clothing line business plan, you actually want to write them last. So, we will circle back at the end this guide.
But, what you can do is work on your companies mission, vission, and values.
Clothing Brand Mission Statement
Why are you starting this company? How will your company change the market place, or even the world?
Vision statements for fashion companies ask the question - What does success look like to you? Is it money? Or, is it positively impacting people's lives? How will you measure your success in the world?
What are your companies guiding principles. What values are at your core that determine and influence your business decisions?
Mission, Vision, Values Workbook Page
Section 3: Product And Services
This section should include…
- A description of the product/ service
- Features and benefits
What Is The Product Or Service?
So, what is it that you are actually selling? And, how will you make money?
In this section, you want to be clear about the type of product or service you are offering and how that will lead to profits.
My Service Offering For virtue + vice
virtue + vice is a consulting agency dedicated to helping companies clean up their supply chains. Target partnerships are existing and established brands with strong supply chains that need help creating transparency or sourcing ethical and sustainable components, as well as, startups who are focused on creating conscious products.
virtue + vice profits through consultancy fees paid by the customer. virtue + vice specializes in the following - sourcing, product development, production management, sustainable design, supply chain transparency, and ethical and sustainable storytelling.
To Recap Products + Services...
See, it's quick and easy. What am I selling? My consultancy services. How am I making money? Through consultancy fees.
What Are The Features + Benefits?
What are you offering that makes your company unique or special?
virtue + vice features and benefits
One key feature that separates virtue + vice from other consultancy firms is our sliding scale for pricing. Because we believe in our mission, virtue + vice pricing structure is on a sliding scale based on a companies profits. We choose to operate like this as a way to give back to small businesses, which we believe in, who might not have the finances to pay our full rates that larger corporations can afford.
Secondly, virtue + vice operates transparently with our customers. Our supplier is your supplier. Many consultancy firms keep their supplier contacts close to the vest and do not share, we welcome our clients to come and visit our partner factories in China and India, and work directly with them
Again, super quick and easy. What makes us different. One, we offer sliding scale prices to help small businesses (we aren't only about corporate life). Two, we work transparently without supply chain secretes like many other sourcing agents.
This section answers what happens when your company grows. Or how business people like to ask "how do you plan to scale".
How does virtue + vice plan to scale?
At about 20 clients, that is manageable for me as a solo-preneur. But what happens when I have 100 clients or more? How does my company grow?
As my company grows I plan on hiring support staff in three key areas. Product development, production, and storytelling. Product development employees will assist in taking our client's projects from initial inception, all the way through sourcing and sample development up until production. The product team member will be responsible for production, and shipping logistics of that production order. And, the storytelling team will assist our clients in telling the story of their products through photos and video for social media, copy, look books, line sheets, website design, etc.
I am actually excited to soon been announcing my first hire on the product development team (but more on that on the about us page.)
So, here I have made a plan for the future. What happens when it gets to be all too much for me alone? Who do I hire to help? I have chosen to separate tasks into three main categories that make the most natural sense for my business model.
Section 4: Marketing Strategy For Clothing Business
This section should include…
- Market analysis
- Target customer analysis
- And, your unique selling proposition that makes your product and business different from everyone else's
Do you understand the market that you are getting into? Like, do you really understand it?
This section of your clothing line business plan starts to get into proving that there is a need for your product or service. Even if something sounds great to you, if there are no customers that want it, then there won't be sales, and you won't have a successful clothing brand.
Here is how I break down my market analysis for virtue + vice
Sustainable and ethical fashion is a trend that has been growing year over year. In this article from Sourcing Journal they reported: "Overall, searches including sustainability-related keywords increased 75 percent year-on-year, amounting to 27,000 searches for sustainable fashion every month, according to the report."
This means that there is currently a sizable market share, that is growing rapidly for brands selling sustainable products to customers. And, those brands need help changing their traditional supply chain models to tap into the growing trend of sustainable fashion.
So, to recap.
What's the market doing, and how does my business play a part in that? Sustainable fashion is a proven growing trend, here is a little industry data to back that up. And, this is how my business plans to be part of that. Instead of choosing to sell direct to consumers, we are choosing to help brands that do.
Target Customer Analysis
Who is your target customer, who would want to buy your brand?
Here is who I target
virtue + vice plans to approach brands and companies that founder Melanie DiSalvo has been working with for the past decade. Because she already knows the ins and outs of their supply chains, she hopes to offer valuable changes and suggestions on targeted areas to help them become more ethical and sustainable.
Now, I understand that everyone does not have a built-in customer base like me. One of the most beneficial pieces of advice I can give is that you should go niche, and not broad.
To simply say "we are targeting people interested in making more sustainable and ethical purchases". Well, every big brand from H&M with their conscious collection to Walmart with their recycled t-shirts is doing that.
What makes you special? Pick something, one thing that makes your customers different. Maybe they are really into composting, so all of your materials are compostable. Maybe they are really into clean water, so your entire supply chain is dedicated to conserving water resources.
Again, I am saying this again, because it is so, so, so important. You can't be everything to everyone. Choose something laser-focused, and then as your brand grows you can expand into other areas.
How Are You Unique?
Did you see what I did there? By choosing a very niche target customer, you have already made yourself unique, and you stand out from the crowd.
How is virtue + vice unique?
virtue + vice is unique because of founder Melanie DiSalvo's extensive time spent living and working in countries like China, India, Taiwan, the Philippines, and the Dominican Republic. She has spent over 1/2 of her career working overseas and that offers her a unique and detailed first-hand perspective on how the fashion industry really works and the best ways to implement change quickly and effectively.
My tips for this section.
Don't be afraid to get a little braggy. Why does your customer want to buy from you? What makes your product so great that it's better than what is already out there on the market. Don't hold back.
Section 5: Sales Strategy
This section should include...
- Sales Goals
- Price Strategy
- Sales Plan
- Investments into sales
What are your sales goals per quarter? For the year? The next 2-5 years? What is your pricing strategy? How will you sell? Do you have an online clothing store? Do you have plans to hire support staff for sales, as a showroom, salesperson, or go to trade shows? Will you open a boutique? Will there be promotional campaigns to support sales like partnerships, advertising, fashion shows, and events, etc.
How much, and how often do you need to sell to turn a profit? At what rate do you plan to grow?
This is what I have in place for virtue + vice
I am uncomfortable sharing that. Here is what I will tell you. My consultancy business is strong enough that I am able to offer all of this information that some other companies charge hundreds or even thousands of dollars for, for free.
My business is healthy enough that I am able to give back to the fashion community at this time.
Are you going to try and sell tons of product at a low price, or fewer units at a higher price? Do you plan to drive sales through special discount promotions?
As I mentioned earlier virtue + vice works on a sliding scale so we are able to help smaller brands build their businesses.
How Will You Sell?
Are you direct to consumers, selling online? Are you business to business? Will you wholesale, will you have a distributor? What is your plan and break down?
At the moment virtue + vice relies mostly on word of mouth and referrals.
Do you need to hire support staff? What does that staff need to do their job?
Can you sell on your own, or do you need help from a pro? For example, if you hire a showroom, not only will you have the monthly cost of the showroom, plus a cut of sales that the sales agent will take. But, you will also have fees to be in the showrooms booth at trade shows. Maybe at the tradeshows, you will need some special promotional items like look books, line sheets, or even a giveaway so buyers remember you.
It Costs Money To Make Money
All of the costs associated with sales, need to go back into your price strategy. Price strategy is like a balancing act. You need to invest in it, but you need to make sure that your sales are more than the investment so that you can be profitable.
This is the hard part
This part of your clothing line business plan should probably take the most time, Really research what everything costs, what your product will cost to make, etc and come up with a well-researched plan.
How I invest in my sales
At virtue + vice I do everything myself. But, people reading this that want to sell a service like me, it's important to remember that your own personal time costs something. While it's not a salary, or an actual expense, the hours that you devote to generating sales for your company should be compensated for.
Section 6: Competitive Analysis
This section should include...
- SWOT analysis
How Do You Compare To The Competition?
This is where you get a little stalkerish. In this section, you need to identify your competition and then the advantages and disadvantages of your competitors. You will need to research things like how long they have been in business, their annual sales (if they are public). How they market themselves. Then compare your price, quality, and general vibe to theirs. Maybe you are selling the exact same thing but have a totally different target customer and vibe you are putting out.
One of the best ways to get you started is through a SWOT analysis.
Ok, so let's get to it with virtue + vice
Who is my main competition?
I just did a quick google search of keywords that I thought my compeators would rank for. And, let's call my top three competitors A, B, and C. Luckily I do not know any of these companies or people personally. So, I don't have to hold back in this analysis.
Before we dive into the SWOT analysis, here is a little info about each company.
Focuses on scaling small businesses.
The website was launched in August of 2018.
And, the founder just so happens to have no information about her experience. But a quick google and Linkedin search shows her background is in marketing for telecommunication companies. Good for them with SEO, but they don't have any real experience in the industry.
Dubs themselves as a strategic advisory for fashion and apparel brands. Offering a full range of different services.
The founder started her sustainable and ethical fashion consultancy business over 8 years ago with 20 years of fashion industry experience. And, has worked with many small, yet well known sustainable fashion brands.
A many different hats consultant that can help brands with things from marketing, so supply chain, to design.
The founder has over 20 years of design experience working with some seriously well known household names that do not have a focus on sustainability.
Competition is a good thing
A lot of times when people start their SWOT analysis they see other people doing what they want to do and they give up.
Don't do that. Competition is good.
Two of these ladies have been in the clothing business for over 10 years working in sustainable fashion consulting. That means it's a good market to be in. They have been making living out of sustainable consulting for a decade. So, business must be good!
Think about fashion in general. There are so many brands, like super successful American Eagle, which was basically just a knock of Abercrombie back in 2003. Don't' let competition discourage you.
The point of SWOT is to figure out your advantages and how to position your brand in the market.
I am working on writing a full SWOT and fashion business competition analysis post, that will be coming soon. For now, I will just quickly go through one example. For this article, I have chosen Company B because their business most closely resembles mine.
How To SWOT
SWOT stands for strengths, opportunities, weaknesses, threats.
Like I mentioned, a lot goes into a SWOT analysis. I am just doing a quick one here to give you a brief idea about what it is.
What advantages does your brand have?
virtue + vice is located in NYC, one of the fashion capitals of the world. Comapny B in New Zeland, has a much smaller fashion scene, and the geographical distance makes networking and partnerships more difficult.
I spend 1/2 the year in India. This keeps me close to my supply chains on the ground, and able to help clients with content about how their products are made as well as live updates. It also offers an added layer of authenticity.
Opportunity is a natural progression from strengths. How can you use your strengths to become even stronger?
My geographic strength of being in NYC leads to more networking opportunities and the ability to attend more fashion events. My life in India allows me to be on the ground working directly with factories so I am first in the know with the latest news.
Company B has been at this longer than me. Almost exactly twice as long as me. Also, one of the things that I thought made me unique - my long history working with well-established brands is also a strength of Jacinta's. We have even worked with some of the same brands!
Threats, analyze what obstacles you face because of your weaknesses. For me one of virtue + vices threads is authority. The fact that Company B has been in business for twice as long, gives them more authority in this space.
Now there are tons more strengths, opportunities, weaknesses, and threats that I could add. And I would recommend doing this exercise for at least 3-5 competitive brands. Again if you want to learn more I will be putting out a full competitive analysis guide with a lot more details and info on how to do a proper SWOT. But for now, I think you get the idea.
Section 7: Production Plan
This section should include...
- Company development, sales, production, and delivery calendar
The Importance of Timelines
This is basically a development and inventory calendar. How many seasons a year will you produce? When will you develop them? Sell them? When will you produce them? And, when will they sell in stores, and even be discounted?
virtue + vice follows our customer's timelines. So, what I am working on for them, depends on their business model. Some of our customers are seasonal, and only put out one main collection per year. Some two seasons, and some up to seven. And, our clients are all over the world. So our southern hemisphere clients are working on a totally different season than brands in the North.
For example, I am working on everything from Summer 2020 (happening like now!) for quick deliveries to Fall 2021, that's not this fall coming up but the fall after it (18 months from now).
How To Set Up Your Calendar
As a brand, I would recommend setting up your calendar around industry tradeshows to start out. The below break down is for America's sales season.
There are 6 major fashion seasons. They are spring, summer, fall, winter, holiday, and resort.
And, there are 4 main dates you need to keep track of for each season. They are development dates, sell dates, and production dates, and delivery dates.
Are the times you will be developing your product for the next season. You are going to want to plan for 3 months of development time before your sell dates.
Are the dates there will be trade shows and other sales opportunities for that season.
Are when you need to start producing the goods, and when they need to be finished by.
Are when the goods need to be delivered to your customer. Remember it can take over a month to ship goods from a factory if you are shipping by sea, so factor that in.
the fashion calendar
Development Dates - May - August
Sell Dates - August - October
Production Dates - October-January
Delivery Dates - January - March
Development Dates - July - September
Sell Dates - October - January
Production Dates - December - February
Delivery Dates - March - May
Development Dates - October - December
Sell Dates - January - March
Production Dates - April - June
Delivery Dates - July - August
Development Dates - December - January
Sell Dates - March - April
Production Dates - June
Delivery Dates - September
Development Dates - February - March
Sell Dates - May - June
Production Dates - July
Delivery Dates - October
Development Dates - March - May
Sell Dates - June - August
Production Dates - July - September
Delivery Dates - November - January
But, this section needs to go even more in-depth than just a timeline.
To understand what goes into product development, production, and sales and marketing schedule I am working on writing full courses on all of those coming soon!
Section 8: Operation Plan
This section should include...
- Your company budget
What Do You Need To Keep Your Business Running On A Daily basis?
Remember that budgeting guide I wrote? This is where all that info goes. Filling out this part of your clothing line business plan should be easy if the budget was done correctly.
virtue + vice operatin plan
I work from home, so that saves me a lot of money. I don't have full-time employees, so that also requires me to have less capital for salaries. Where I personally spend most of my money is on travel.
And, no it's not the glamorous kind of travel. It's me booking a ticket at 6 am for a flight to India at 9 pm that same day so I can go straighten out some sort of supply chain issue we are having in person.
Do I have to travel? Well, that's 50/50. A lot can be done remotely. But, there is always a special touch that comes when you do business in person. You will find that almost any time in business when you are face to face the dynamic is different. Even just taking a conversation off of email and onto the phone can makes huge difference.
Necessary recurring monthly costs for me are the website domain, hosting for the website, apps, and programs I use like Grammarly, Adobe, and quick books.
Basically you can take your budgeting template and use it for this section. Yay! The work is already done for you.
Section 9: Financial Analysis + Projections
Again, this is where budgeting is going to come in handy. You might even want to hire a professional bookkeeper or accountant for help with this.
This section should include...
- The money you need to get started
- How you will use that money
- The income you hope to make off of your products
- Cash flow
- And, balance sheet
Financials make most peoples heads spin, that is why I definitely recommend talking to a pro for this part.
At virtue + vice I have a full-time bookkeeper and an accountant. I am uncomfortable sharing my companies finances publicly. But, if you need help with this section, that's why I suggested at the start of this article to help get your financial plan for fashion business in order before even starting the business plan.
Back to Sections 1 +2: Executive Summary + Company Overview
Now back to the top. Remember, we skipped the executive summary and company overview. Now that we have mapped out our entire business plan we need to recap everything by writing these two summaries.
This is where you can hook potential investors. It's the first section anyone reads of your plan, so make it clear and quick.
Here is mine for virtue + vice
virtue + vice is a consultancy firm dedicated to helping companies clean up their supply chains. We are located between NYC and Goa, India. Our dual locations allow us access to the world's fashion capital, while our time spent in India allows for close monitoring of our supply chains.
Our goal for virtue + vice is to assist companies who are realizing that sustainable and ethical fashion is not a trend that is going away anytime soon, and want to be the process of cleaning up their supply chain. We offer support across all product life cycle steps including - conscious design, sourcing, product development, production, marketing and branding, retail and sales, storytelling, and content.
Key things to include in your executive summary
What you do. Where you are located. Benefits of your location. What you are selling. Why what you are selling is a great idea. Again, it's ok to get a little braggy here.
You can use this part to dive a little deeper into you and why you are starting your brand. Who are you? Why this product? How are you qualified to do this, etc? Why are you designing the type of products you are designing (hint, hint, market research). Etc...
this is my company overview for virtue +vice
virtue + vice was founded by Melanie DiSalvo. In her own words
"After working in fast fashion for 7 years I left my position as Director of Product Development with the goal of helping brands clean up their supply chains.
At the time I had a great salary, was working my way up the corporate ladder, under 30 and already had a director's title, and was traveling the world to developed and produce products for brands like Walmart, Target, Ralph Lauren, and Levi's to name a few.
The problem was that I saw and learned too much about how our clothes are really made in dark corners of the world.
So, I made it my goal to expose the industry by educating curious customers and help brands choose better supply chain partners. I have been featured in publications like WWD, VOX, Sourcing Journal, and more. And, was a speaker at SXSW."
virtue + vice aims to target clients from the fashion industry with well-established brands as well as startups to aid them in supply chain transparency and creating conscious products for this growing market share. virtue + vice will work with each client individually to meet their seasonal needs.
We believe our strength is our 10 years experience in this industry and the supply chain partners we have developed relationships along the way. Our plan. is to operate out of NYC and India for the foreseeable future where our founder has homes, and hopefully to expand to a third location in China in the next 5 years.
We believe that our dedication to quality and transparency, along with a sliding consultancy rate, will keep us profitable in years to come.
company overview recap...
See what I did here? I spoke more about myself and created a little background story. Then I hit all the other points of the business plan quickly - marketing, sales, competition, production, operation, financial.
And, We're Done!
And there you have it. A clothing line business plan. I hope this helps. After coming across so many generic business plan templates online, I was inspired to write something a little more intimate. I really wanted to show you what goes into making a business plan, and in the spirit of transparency open up about how my business works.
Remember, business planning is a lot of hard work. But, when clothing brands put in the effort at the start of their business, they have a much higher chance of success and growth.