The executive summary is the first part of your business plan, but you usually write it last because it’s a summary of all the important parts.
Your Executive Summary should quickly grab the reader’s attention. Tell them what kind of fashion business you run and where it stands in its development. For instance, are you just starting out, do you have a fashion business that you want to grow, or do you run a chain of fashion businesses?
Next, give an overview of every part of your plan that follows this one. For example, give a short summary of the fashion industry. Talk about the type of clothing business you have. Detail your direct competitors. Give an overview of who you’d like to buy from you. Summarize your marketing plan in a few sentences. Find out who the most important person on your team is. And tell them what you are going to do with your money.
In your business analysis, you’ll say what kind of fashion business you run.
For example, you might be responsible for one of the following:
- Fast Fashion is a type of fashion business that quickly picks up on new styles and puts them on the market.
- Haute Couture is a business that sells expensive clothes.
- Bespoke tailoring means making clothes for a customer after talking with them about what they want.
In the section of your business plan called “Company Analysis,” you need to explain what kind of fashion business you run and give some history about it.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? Some examples of milestones are reaching your sales goals or opening a new store.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Explain your legal structure here.
In your industry analysis, you need to describe the fashion business in general terms.
This might not seem useful at first, but there are several ways to use it.
First, you are smarter if you know how the fashion business works. It helps you learn more about how the market works.
Second, market research can help you make a better plan, especially if it shows market trends. For example, if street fashion was popular, it would be a good idea to include a line of urban clothes in your plan.
Doing market research is also a good way to show your readers that you know what you’re talking about. This is what you do by doing your research and putting it into your plan.
In the industry analysis part of your fashion business plan, you should answer the following:
- How much does the business of fashion 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 do you think the market for your clothing business could be? You can get this number by figuring out how big the market is in the whole country and then applying that number to the people in your area.
In the “Customer Analysis” section of your fashion business plan, you should talk about who you serve and/or who you hope to serve.
Customer segments include college students, sports fans, soccer moms, techies, teens, baby boomers, etc.
As you might expect, your choice of customer segment(s) will have a big impact on the kind of fashion business you run. It’s clear that teens and baby boomers have different fashion tastes.
Try to figure out who your ideal customers are based on how they think and feel and where they live. In terms of demographics, talk about how old, male, or female, where they live, and how much money they make.
You can learn what your customers want and need from psychographic profiles. The better you can understand and explain these needs, the easier it will be to find new customers and keep the ones you already have.
In your competitive analysis, you should find out who your direct competitors are and then focus on them.
There are other clothing stores that are direct competitors.
Customers can also buy from indirect competitors instead of direct competitors. This includes clothes that are not trendy and clothes that have been worn before.
In terms of direct competition, you should list the other fashion businesses that you are directly competing 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.
The last part of your competitive analysis is to list the ways you are better than your competitors. For example:
- Will you provide superior products?
- Will you sell things that your competitors do not?
- 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, the price, where it will be sold, and how it will be promoted. In the marketing plan for your fashion business plan, you should:
Product: In the product section, you should talk about the same kind of fashion business you talked about in the company analysis. Then, give a detailed description of what you will be selling. For example, will you sell things like accessories, shoes, bags, etc. in addition to clothes?
Price: List your prices and how they compare to your competitors’. In the “products” and “prices” parts of your marketing plan, you basically just list the things you sell and how much they cost.
Place is where your fashion business is and how people get your clothes. Write down if you will sell your own clothes in a store or on your own website. Also, write down if you plan to sell your products through distributors and who you think they will be.
Promotions: This is the last part of the marketing plan for your fashion business. Here, you’ll list the ways you’ll get people to come to your business (s). Here are some ways to get the news out about your business:
- If you have a fashion business, you can get more people to stop and buy from you by making your storefront more appealing.
- Putting ads in local newspapers and magazines
- Trying to get in touch with local blogs and sites
- Using social media to advertise
In other parts of your business plan, you talked about your goals. In the operations plan, you explain how you’re going to reach those goals. Your operations plan should have two different parts.
Everyday short-term processes include everything you need to do to run your fashion business, such as serving customers, buying inventory, keeping the store clean, etc.
Long-term goals. Some of these dates could be when you hope to have helped your 10,000th customer or made X dollars in sales. It could also be when you want to hire your Xth employee or open a new location.
To show that your fashion business 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.
Somebody on your team or you should have worked in the fashion industry before. If so, tell about what you’ve done and what you’ve learned. You should also talk about any business experience you have that you think could help your business do well.
If you don’t have a strong enough team, you might want to make an advisory board. A board of advisors would have between two and eight people on it. They could give you good advice that would help your business. They would answer questions and give planning advice. If you need to, try to find people for your advisory board who have worked in the fashion business or who have successfully run retail or small businesses.
Your 5-year financial plan should include your 5-year financial statement. This should be done every month or every three months for the first year. Then, it should be done once each year. Your financial statements should include your income statement, your balance sheet, and your cash flow statement.
Income Statement: P&L is short for “profit and loss,” which is what most people call their income statement. It tells you how much money you made and how much it cost you, so you can figure out if you made a profit.
When you write your income statement, you have to make some assumptions. For example, how many people do you want to serve every day: 100 or 200? How much will sales increase every year? 2% or 10%? You may expect your assumptions will have a big effect on the financial projections for your business. Try to find information that supports what you think by doing as much research as you can.
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 to build your fashion business, 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 still go bankrupt if you run out of cash. For example, say a distributor came to you with an order for $100,000, which would cost you $50,000 to fill. Well, in most cases, you’d have to pay that $50,000 now for things like supplies, equipment rentals, 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.
Don’t forget to include some of the most important costs of starting or growing a fashion business on your Income Statement and Balance Sheet, such as:
- Location build-out costs, which include fees for design, construction, etc.
- How much things like furniture, sewing machines, and other things cost.
- Keeping enough supplies and stock on hand costs money.
- Payroll or salaries paid to employees
- Commercial insurance
- Fees and permits
- Legal expenses