- Your business plan is what transforms your germ of a business idea into a viable proposition—laying the groundwork for your brand.
- What's the purpose of your brand? Was it born looking for a solution to a problem? Or a gap in the market you aim to fill? Outline what you want your brand to achieve and why.
- Starting an online fashion brand isn’t a walk in the park. Still, it's a viable venture if you have the knowledge and passion for navigating the market and competition.
The stats speak for themselves. In 2018, e-commerce fashion, footwear, and accessory sales came to an estimated $102 billion, with a projection for further growth to around $146 billion by 2023. With so much money to be made, it's no wonder you want a slice of that pie. But How do you get started?
Whether you're new to the world of fashion or looking to up your game online, you’ll need a business plan. Not only does this provide the blueprint for your business goals, but it's also imperative for attracting serious investors...should you be looking for them.
In short, your business plan is what transforms your germ of a business idea into a viable proposition—laying the groundwork for your brand. It’s what comes first, even before you start looking at products, designs, and marketing them.
Do some consumer research using reputable resources like Euromonitor. Here, you'll find all the latest consumer trends. On top of that, it's worth checking out market reports from companies who provide expert analysis on the fashion industry, like NPD Group.
It's also wise to keep an eye on current and emerging global trends that may impact your business. This is all the more imperative if your stock and distribution channels are overseas.
What happens if you don’t research your market? Here a few examples of real-life fails caused by a lack of market research:
- The men’s deep V-neck: This nipple-skimming, low-slung top never made it past the likes of Peter Andre and Ben from A1. Well, not enough for it to stick around, anyway.
- Meggings: You read right. Meggings are the male equivalent of leggings, and unsurprisingly there wasn't a demand for them.
- Shirtless leather jackets: Sticky and unflattering shirtless leather jackets never took off—funnily enough, there wasn't a demand for them.
With your market research at the forefront of your mind, you can start to compile your business plan. Typically, this is broken down into the following sections:
- THE EXECUTIVE SUMMARY
Usually, the executive summary is the first thing people read. It’s a teaser designed to excite the reader and highlight your brand’s potential. It provides an overview of your business plan and research. Sometimes, the executive summary is the only thing investors read to determine whether a brand's worth their time. So, it’s essential to get this right.
What should the executive summary include?
- An overview of your business's overarching purpose, plan, or goal
- Why and how your brand meets a consumer demand
- Define any problems that could potentially arise: This could be your competitors, advertising issues or funding shortfalls. Then detail the solutions to these issues.
- Outline the research methods you used and your findings. This helps validate your claims and illustrate that you know what you’re talking about.
Remember, be concise and tailor the summary to your audience to grab their attention and relate to them.
- COMPANY OVERVIEW
The company overview outlines the foundations of your business plan. It’s more in-depth than the executive summary and provides details about your company’s background, the founder/s, and your mission.
A company overview should include:
Basic Company Details
- The official name of your business
- Your business structure - sole proprietorship, LLC, partnership, corporation, etc.
- Your location(s)—Do you have a headquarters? Where's your online fashion brand based?
Ownership and Management
Introduce the owners and management team. Break down who's involved and how. What shares belong to who? If you have a management team who are highly involved with your business, share their names and roles too.
Everyone has a history, and the same goes for your company. There shouldn’t be too much focus on this. Still, it's the perfect place to showcase your brand’s personality and share interesting details about your company’s history.
What's the purpose of your brand? Was it born looking for a solution to a problem? Or a gap in the market you aim to fill? Outline what you want your brand to achieve and why.
Product or Service
Identify who your ideal customers are and what you provide them. You can share some numbers here, but keep it to a minimum as you'll go into this in detail in a bit.
Defining your brand’s goals shows you have a dream and a vision. This section can also cover your financial goals and the growth you hope to achieve. Show the reader where you are now, as well as where you want to be.
- ANALYSIS OF THE MARKET
Demonstrate you’ve done your research by providing market analysis. You should adopt a quantitative (measuring by quantity) and qualitative (measuring by quality) approach.
Be sure to include the following:
- The size of your market both in terms of value and volume
- Your customer segment and consumer buying patterns
- Fashion trends you want to capitalize on
- Your competitors
- The current economic climate and how that will impact your venture
- MARKETING PLAN
Here, you define and outline your marketing strategy and goals for the coming month, quarter, and year.
Be sure to include the following in your marketing plans:
- A description of your current marketing position
- Your brand’s marketing and advertising goals
- The key performance indicators you’ll be tracking
- The marketing methods you'll use
- A timeline of when you expect to complete the tasks in your strategy
- YOUR FINANCIAL PLAN
Your business plan's financial section is crucial as you need to show that your brand is viable, stable and profitable. As a minimum, you’ll need to lay three years' worth of financial statements and a monthly cash flow statement. Investors want to see the monthly numbers in the first year. This is when your startup is most vulnerable, and it's also an indicator of future performance.
Have you acquired any funding? If so, mention it here and list the sources and uses of the funds. This includes how much money shareholders contribute too.
You should also have a declaimer section that identifies any key assumptions that could impact your financial forecasts—for instance, any possible scenarios, setbacks, or upsides that could affect your business's viability (both for the better or worse).
You'll also need a sales forecast and cost structure. The sales forecast is essentially where you justify your predicted sales by linking it to the market research you’ve done. The cost structure is where you analyze the potential operational risks.
Are You Ready?
Starting an online fashion brand isn’t a walk in the park. Still, it's a viable venture if you have the knowledge and passion for navigating the market and competition—and creating a business plan is a crucial step in that process.
It will help you break down what you want to achieve with your brand, why, and who for. It will also highlight potential problems and the financial implications of starting and maintaining your brand. That way, you and your investors will walk into this venture with your eyes wide open.
Above all, it's the best way to show investors you know your market and give them a taste of your brand's personality.