Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the most important parts of your plan.
The reader should be interested in your Executive Summary right away. Explain to them the type of clothing line business you are operating and the status; for example, are you a startup, do you have a clothing line that you would like to grow, or are you operating multiple clothing lines.
Next, describe each part of your plan that follows this one. For instance, you could briefly describe the clothing industry. Talk about what kind of clothing line you are selling. Detail your direct competitors. Give a summary of who you want to buy from you. Give a quick overview of your marketing plan. Find the people on your team who are the most important. And explain how you plan to take care of your money.
In your business analysis, you will talk about what kind of clothing line you have.
Usually, you’ll talk about your clothing line based on 1) who it’s for (women, young men, etc.) and 2) what it’s made of (jackets, shirts, dresses, etc.).
In the section of your business plan called “Company Analysis,” you need to explain what kind of clothing line you run and give some background on the business.
Be sure to answer questions like:
- When did you start this business, and why?
- What big steps have you taken so far? You could have hit a sales goal, opened a new store, etc., as a milestone.
- Your legal structure. Is your business set up as an S-Corp? An LLC? A single-person business? Tell us about how your law system works.
In your analysis of the clothing business, you should describe the business as a whole.
This might seem useless, but there are more than one way to use it.
First of all, learning about the business of clothes and clothing lines gives you knowledge. It helps you understand the market better.
Second, market research can help you come up with a better plan, especially if it shows you market trends. For example, if there was a trend toward clothes that fit more loosely, it would be a good idea to make sure your plan includes these kinds of items.
Doing market research is also a good way to show your readers that you know what you are talking about. This is what you do by doing your research and putting it in your plan.
In the industry analysis section of your clothing business plan, you should answer the following questions:
- How much money does the business with the clothing line make?
- Is the market getting smaller or bigger?
- Who are your biggest market competitors?
- Who are the most important suppliers in the market?
- What kinds of changes are happening in business?
- How do you think the business will grow over the next 5–10 years?
- How large should the market be? That is, how big is the possible market for your clothing line?
In the section of your business plan about your clothing line called “Customer Analysis,” you must describe the customers you serve and/or plan to serve.
Customer segments include college students, sports fans, soccer moms, techies, teens, baby boomers, and so on.
As you might expect, the type of clothing line you run will depend a lot on the customer segment(s) you choose and vice versa.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should find out who your direct competitors are and then focus on them.
Direct competitors are clothing line businesses that sell the same kinds of clothes as you do and target the same kinds of customers as you do. Indirect competitors are other things that customers can buy from you that are not your direct competitors. A company that makes jeans and a company that makes sweatpants are indirect competitors because the two products are similar.
In terms of direct competition, you should list the other clothing-related businesses that you are in direct competition with. Give an overview of each of their businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you have worked for one of them. But you should be able to learn important facts about them, like:
- What kind of clients do they work with?
- What kinds of goods do they sell?
- What is the price range (high, low, etc.)?
- What are their strengths?
- What do they not do well?
Try to answer the last two questions from the point of view of your customers. Online reviews of your competitors can be a good source of information here.
The last part of your competitive analysis is to list the ways you are better than your competitors. For example:
- Will the clothes in your line be of good quality?
- Will your clothing line have things that your competitors don’t?
- Will you make it easier or faster for customers to get your products?
- Will you give your customers better service?
- Your prices will be better, right?
In this part of your plan, you should think of ways you can do better than your competitors and write them down.
Usually, a marketing plan has four parts: the product, its price, where it will be sold, and how it will be promoted. In your marketing plan for a clothing line business plan, you should include:
Product: In the section about the product, you should write again about the type of clothing line you talked about in your Company Analysis. Then, explain in detail what you will be selling.
Price: List your prices and how they compare to those of your competitors. In your marketing plan, you list the clothes you sell and how much they cost in the “Products” and “Prices” sections.
Your clothing line’s location is called its “place.” Write down where you are and how your location will affect your success, especially if you’re trying to reach people in a certain area.
Promotion: This is the last part of your clothing line’s marketing plan. Here, you will write down what you will do to get people to buy your clothes. Here are some ideas for how to promote your business:
- Having a storefront and/or selling things online
- Putting ads in the local newspapers and magazines
- Trying to talk to bloggers and website owners
- Having agreements with other companies
- Radio or TV commercials
- Event marketing
- Marketing on social media
- Pay-per-click (PPC) ads show up when someone clicks on them.
You wrote about your goals in other parts of your business plan. In the operations plan, you talk about how you’ll reach those goals. There should be two different parts to your operations plan.
Everyday short-term processes include things like designing clothes, making them, buying supplies, keeping track of inventory, etc.
Long-term goals are the steps you plan to take to get there. These dates could be when you plan to sell your 1,000th item or when you want to make $X. It could also be when you want to hire your Xth worker or start selling a new line of clothes.
To prove that your clothing line can work as a business, you need a strong management team. Show the backgrounds of your key players, with a focus on the skills and experiences that prove they can help a company grow.
You and/or your team should have worked in the clothing line business before. If so, talk about what you’ve learned and what you’ve done. But you should also talk about any business experience you have that you think will help your business do well.
If you don’t have a strong enough team, you might want to put together an advisory board. A board of advisors could have anywhere from 2 to 8 members. These people would help you with your business as mentors. They would answer questions and give planning tips. If you need to, look for advisory board members who have successfully run clothing lines, retail businesses, or small businesses.
Your five-year financial plan should include your five-year financial statement. It should be broken down monthly or quarterly for the first year, and then once a year after that. Your financial statements include your income statement, balance sheet, and cash flow statement.
Income Statement: Most people call an income statement a P&L, which stands for profit and loss. It shows how much money you made and how much it cost you, so you can see if you made a profit.
When making your income statement, you have to make some assumptions. For instance, how many items do you plan to sell each day? How much will sales increase each year? 2% or 10%? As you might expect, the assumptions you make will have a big impact on your business’s financial projections. Do as much research as you can to try to find facts that support what you think.
Balance Sheets: Balance sheets have a lot of information on them, but the most important thing to know is that they list your assets and your debts. For example, if you spend $100,000 setting up a shop where you design clothing lines, you won’t start making money right away. Instead, it’s an asset that you hope will bring in money for years to come. In the same way, you don’t have to pay back a $100,000 check right away. You’ll have to pay that back over time instead.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you don’t run out of money. Most Business owners and entrepreneurs don’t know that you can make money and go to church at the same time.
if you don’t have enough money. For example, let’s say a store came to you and offered you a huge contract to design and make clothes for them for $100,000. And that it would cost you $50,000 if you did it. Well, in most cases, you’d have to pay that $50,000 now for things like supplies, employee salaries, etc. But imagine that it took the company 180 days to pay you. During that period of 180 days, you may run out of money.
When you make your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing a clothing line, such as:
- Construction of a house and/or a factory, including fees for design, construction, etc.
- How much tools and things like sewing machines cost.
- Price of goods and supplies
- Payroll or salaries paid to employees
- Commercial insurance
- Fees and permits
- Legal expenses