Tuesday, March 15, 2011

Costs of Launching a Collection

Without going into details about the costs of starting up a fashion design business, which are significantly higher than those of "merely" launching a collection, I thought it might be useful to discuss some of the costs involved in launching a modest collection and give a sense of the global amounts. It is possible to do things for less, by cutting corners and relying on friends and acquaintances for a lot of the upfront tasks, but to do the job professionally involves engaging a certain level of investment.

For my initial launch, I will have about eight outfits on display ... I say this with some hesitation, because what I'm offering doesn't fit within standard categories, but let's say that it will be the equivalent of eight outfits, more or less. Eight outfits is a very modest collection - a recent fashion show by a major Montreal designer involved about 40 outfits, and these were "seasonal", aimed for the Spring/Summer period, whereas mine are an "Annual" collection, again a choice for a startup.

The minimum global cost of launching a new line of about eight garments is about 50K$ (50000$). This, in general, excludes the manufacturing costs of the garments themselves. The money is used for organising the fashion show and photoshoot for the website - the cost of photography, video production, organisation, and paying the models, as well as paying the team of people involved in the effort - stylists, make-up, an announcer, music, etc. The reason one pays for all this, is that the fashion show "buzz", the website and the video footage all contribute to driving sales in the initial period. A bill of 50K$ is actually quite low - for larger collections and bigger events, the bill will be much, much higher.

As a "newbie" designer and business man, I found it very difficult to obtain reliable estimates of the costs of doing business before actually embarking on the process. I rather naively thought we could "introduce" new garments on an adhoc basis as the business grew. But although this is always possible, there are timing and marketing issues that affect what generates the best sales, and the "adhoc" approach is often not the best approach. A structured campaign with appropriate marketing will, in general, drive stronger sales that the ad hoc introduction of new elements. This is why people use the "collection" so consistently within the fashion industry.

Finding the right strategy to follow for a start-up company is tricky. Remember, they say that nine out of ten business start-ups will fail. There are lots of "shoals" to wreck the ship in - it requires careful navigation to get through the coral reefs of the start-up process. Underestimating the funding required is just one of the larger dangers that loom!

Friday, March 4, 2011

The Joys (and Challenges) of Moving Forward

Time to give an update on how things are progressing!

On my iPhone, I now have a ToDo list that is subdivided into the different categories of what a business needs and does : Management, Administration, Marketing, Sales, Design, and Production. I propose to follow these rough categories to give you an update on how things are going.

Management : By management I mean resources management, of which there are roughly three types currently - staff, finances and inventory. In early February I hired a part-time assistant who's been very productive at getting a whole set of initiatives moving forward while I've been handling design, some marketing issues and also keeping my university career on the ball. I also now have a bank of three going on four or five couturiers/couturières (seamstresses and/or tailors) who I can call on to help with prototype development and the early vetting of production garments. The funding got worked out, although I am still finding dealing with the accounting software to be a major challenge. I think hiring a part-time accountant will be a priority once we start to generate some revenue. Finally, there is no inventory to speak of yet, but we are negociating to rent some office & storage space so that when the inventory does start to arrive we have the space to put it! We shall be acquiring a computer and phone as well for the office in the next few weeks. Also, we obtained a CA # for our clothes, a Canadian legal requirement for the clothing industry.

Administration : By administration, I really mean the top-level meetings, issuing shares and so on. Not a lot going on right now.

Marketing : I have put on a major effort to get an online presence established, and this is going quite well. I have a website with an active blog and a twitter presence that channels back to the blog and website. I've done quite a lot of SEO tweaking and the results are beginning to pay off. Viewership of the website is now above 100 a week and climbing steadily, with a moderate to low bounce rate (40%) and along average viewing time (16 minutes and 12 pages despite the bounce rate) - people are clearly looking at the whole site and not just the blog postings. This bodes well for an online store. I'm also negociating with a company to do the online store after spending some time preparing a website design brief that explains in detail what I want. Locally, I've been promoting the business mostly by word-of-mouth, through my different communities. I am almost finished organizing a Facebook page for the business as well. Also, a newsletter will be issued shortly.

Sales : None yet, of course, but interest is running quite high. We are just in the process of finishing up the first production prototypes, and these will help us garner interest among small boutiques in the region. I've developed a coding system for the garments - the first production run is quite complex and the codes will be needed to make sense of the production and to keep track of where things are at.

Design : Design has been the bottleneck in moving forward, but I've found to my chagrine that it can't be rushed. I can put in at most about three hours a day on design. Then my brain cells start complaining about the intensity of the work! But the first line of garments is (almost) finished, while the first two models of the second line of garment are also more or less completed and ready for production.

Production : While the whole production process was quite mysterious to begin with, we've more or less worked out most of the kinks and know how and where to go to do this, how much time it takes, and more or less how much it costs. We know what labels need to be made and where to make these, and are in the process of working out packaging requirements. We expect to be in production for the first batch of the first garment line by the end of March.

Our local (Quebec City) launch event won't be in April, but we believe we can meet a deadline in mid to late May now. Our online launch date will be several weeks after the local event as the online store will take a bit of time to develop and, hence, we will be able to use the photos and video footage from the launch event on our online site.

The stress levels have come back down to a more or less reasonable level, while the excitement factor remains high. The adventure continues!