Many African-American entrepreneurs have found success in the fashion business – Jay-Z, Russell Simmons and Tracy Reese to name a celebrated few. But for those looking to build their fashion house lack the financial resources and celebrity backing of the big players, missteps can be fatal. Here’s how fashion experts say you can stack the odds in your favor and go from fashionista to fashion mogul
Identify a clothing concept and target audience. Determine what garments you will make and study the fabrics you will most likely use. Then conduct market research to see if there is a target audience for your clothes. Talk to owners of retail stores and textile suppliers for information about businesses that produce the same kind of apparel that interests you. These contacts should also be able to tell you the buying patterns within various price points.
Cover your business basics. Choose a location for your business. Most new designers start right out of their homes. Incorporate your company. Also create a business plan, retain a corporate lawyer (particularly one familiar with the laws that govern apparel manufacturing), and start the trademark process early.
Form partnerships if necessary. If you have orders, but lack the infrastructure to fill them, look for a company that’s in your price point and has the equipment and staff, but no sales, and form a partnership. Another financial option is to use a factor, a method of asset based financing in which a firm purchases 70% to 80% of the money due on a company’s receivables, for a 4% to 5% finance charge on the total amount of the receivable.
Create your samples and price your garments. Depending on the size of your entire collection you may need several sample garments. How you will price your collection will depend on the cost of fabrics, manufacturing, and desired profit margin. Designers may have anywhere from 27% to 50% markup on a garment.
Check with your contacts. Having solid relationships is a key to success. Consider the contacts you have in the industry that could point you to manufacturers, textile firms, buyers, and other fashion professionals.
Find a manufacturer. Scour the tradeshow floors for a few prospects. You can also solicit a manufacturer by placing an ad in one of the fashion trade magazines.
Woo the buyer. Find the buyers for your price points and call them. Ask to make a presentation. Sometimes buyers only view new collections during “Market Week,” so it may be easier to schedule a meeting with a head buyer’s assistant. If you do secure an order, make sure you follow through.
Read the trades. New designers should read everything they can get their hands on about the fashion industry. Two places to start are with Women’s Wear Daily and DNR.
Edit your line. Collections are not evergreen. They must change periodically to keep pace with changing trends, so revisit and revise your clothing line often. Take stock of which colors, cuts, and sizes sell the best and make adjustments accordingly.
For even more tips on starting your own business, join us at Black Enterprise’s annual Entrepreneurs Conference, taking place May 22-25, 2011 in Atlanta Georgia. Visit blackenterprise.com/ec for more details. As an incentive BE is offering you a discount on early registration: Just enter code BEDG295 and receive $200 off.