Starting a fashion business with very little capital is very challenging, but it can be done. Sometimes having too much starting capital can be a bad thing, it gives the early illusion of success and leads to wasteful processes and business practices.
I remember when I first started out. Many people believed in my vision and of course I had lots of support from friends and family who wanted to support my dream. A year down the line, I was out of cash! When I thought back to what I spent the money on, it seemed to be on things that did not directly relate to revenue. It was more about 'branding' - and I use the word very loosely. I spent money on things that, in hindsight, did not seem to matter then such as having the perfect website, employing staff I did not need, spending money on business cards that cost so much but was never delivered and other things.
When I was about to start over, I cried to my parents for help (well not literally) and asked them not to give me the money but to loan me the money. That was the best thing I could have done for myself. And luckily for me, my parents were quite shrewd. I had to pay the money back in instalments when it was due.
It made me 'hustle' because I knew I had to pay back money at a certain time. It made me think, strategize, spend money only when it was necessary and create new products and services. Lucky for me, all the excess staff I had left for one reason or the other. The interns went back to school, the Corps member completed her service, the tailor who was misbehaving then got suspended and never showed up at the end of his suspension, and little by little it all paid off. I watched my costs like a hawk, spending money only when absolutely necessary, bargained like there was no tomorrow and learnt to prioritize my spending. Little by little, it all paid off.
By starting lean, you'll be more likely to maintain disciplined financial practices as your business grows. Here are six tips that’ll help you start your fashion business on a lean budget.
1. Don't spend money without thinking about how that money is going to grow your business.
2. Keep your business and personal account separate.
3. Don't assume you have to buy everything for your business, rent or lease if possible.
4. Hold off on opening a physical space unless you absolutely have to.
5. Don’t hire unless absolutely necessary.
One other thing I would add is that financial help from friends and family does not have to be financial in nature. You can ask for a donation of physical assets instead. I remember when setting up the office, my father gave me some office chairs, 2 desks (which I thought was old-school then but looked absolutely fabulous when I ran out of cash) and he also gave me a generator which I really needed, my mother donated 2 ACs when she noticed I did not default on my repayments, my friend also donated an AC, I was vocal on Facebook about things I needed and people who had these gave them to me. Money, at the end of the day is only useful for its intrinsic value so if I could get the things I needed, then chances of spending the money on things that did not really matter were really slim.
My advise to you is that if you're going to start with very little capital or start a business at all, you need to plan carefully and conserve all the cash you can. Cash is the lifeblood of every business. Without it, your business will crumble because you will be unable to pay for goods, services or even your utility bills like electricity or staff salaries, if you have any.
Did you start your fashion business on a lean budget? Share your experiences in the comment section, we’ll love to hear from you.
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Thank you maam for the tips.
What does it mean to outsource?
Outsourcing simply means getting another company to do a certain task for you instead of handling it in-house. For example, getting a production house to sew your designs for you instead of getting tailors and machines and setting up a production unit so you can sew them yourself.