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Many people cringe at the simple mention of a Business Plan, thinking it is one of the most complicated things to do. It’s not! Besides directing your company towards its goals, it is essential to have one when you go after loans or investors. To make things easier, let’s talk it through:
A typical business plan has:
- Executive summary: key information about the brand, the products, the market and how you plan to make it profitable (sometimes the amount of investment desired can also be here).
- Description of the product or service: what is the brand, why it was created (you can include mission, vision, values), what are the products/services and what gap/opportunity they are addressing.
- Management team: who is going to be on board with you? Maybe in the beginning, to reduce costs, you may outsource personnel but try to have people with complementary skills close to you (i.e. a financial consultant if you can’t do accountancy at all). List everyone, regardless of being full time employees or not, as you’ll need to justify these costs later on.
- Market and competition: how is the current market in your segment (worth doing a wide research, backed by statistics) and who are your main competitors (if you think there aren’t any, re-evaluate the whole endeavour!). Go deep and analyse what they are doing right and wrong and improve your competitive advantage.
- Marketing and sales: what is the marketing plan and the sales channels? How do you intend to use different media and where your client will be able to purchase a product? Using the 7P’s of Marketing Mix can be helpful here.
- Business system and organisation: how the business is structured, what are the sources of revenue and how the activities are organised? Also, what are the resources (physical and intellectual) you’ll need? It’s important to have a clear vision even when you are working in a studio, by yourself, most of the time. This shows understanding and perspective of your objectives.
- Opportunities and risks: both are critical to the venture success. Identifying an opportunity is a big step to differentiate the brand but knowing the risks will prepare you to better deal with them.
- Financial planning: this is the key part, where all the projections of cash flow, profit & loss account and forecast of sales are gathered. Don’t hesitate in seeking professional help to do it, since it’s the most sought-after element of a BP.
- Appendix: if you have research that assures a gap in the market or any other material that evidences that you are on the right path, attach here.
With the Business Plan in hands, if you are looking for investment, it’s time to prepare your case. Ensure that the amount you are seeking is satisfactory for the business to run for a while (usually one year, at least). Since this is a serious and thoughtful process, again, look for external help if needed. Once the math is done, decide what kind of investment is the most suitable:
- Strategic investors: equity investors, business angels or venture capitalists
- Debt financiers: banks, loan schemes and insurance schemes
Traditionally, fashion is not a field that strategic investors are willing to put their money up front, but if you are stepping into wearable techs or any other technology related field (apps, augmented reality, e-commerce) you may get their attention faster. As I said before, innovation is key and the market is longing for it. As you sort out the path to grow your business, prepare all the documents, make a confident presentation and schedule a pitch! Good luck!
Online resources
Business strategy and financial consultancies
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