Whether you’re ready to start up a self-sponsored fashion label or an eco-friendly one that could potentially attract investor support, having a business plan drawn up will prove to be extremely valuable. This document will serve itself as a future check-list that you can keep going back to as your business grows.
These are the key components that your business plan should contain:
1. Executive Summary
If you’ve been an avid follower of the popular show Shark Tank, you know that this is your 30-second elevator pitch that sparks further interest in your business and what you are about. An executive summary is not just a brief you offer potential financiers; it’s the same attention grabbing pitch that you will recite and repeat over and over when hiring an initial team as a start-up and when you approach clients. It is imperative that you edit this repetitively until it’s pitch-perfect to become better at telling your story.
Consider covering these points when putting together your executive summary;
- A clear description of what your brand offers
- Point out the lack of it in the market
- Highlight how your brand creates a demand for itself
2. Vision & Target
This segment includes a summary of your target market and an outline of your future goals.
It’s important to gather an understanding of what particular market ‘need’ your brand plans to chase after and how unique your product really is.
Addressing these questions should help you comprehend your market;
- What niche are you trying to fill in the market?
- What do you hope to achieve?
- Who are you designing for?
The last question is one of the most important one to answer as it will help you identify the age group, demographic and their spending power. Conducting an AIO (activities, interests and opinions) analysis will be beneficial to this process.
Composing a two year plan helps you create an achievable goal chart for your business – this can be done through seasonal collections by noting the cost put into production and the revenue you plan to generate through them.
3. Market Analysis & Competitive Landscape
It is important to understand the market you plan to operate in by identifying your competitors and recognizing what differentiates you from them – a simple SWOT analysis should help you see where you stand as a start-up against your counterparts.
Include the strategies you use as a brand to give yourself an edge over the rest.
For example: leading accessory brand Pipa+Bella offers a bevy of baubles along with a personalized segment that allows its customers to DIY and create a customized trinket of their own liking. This can be marked as their strength because it allows the brand to reach a larger audience of potential customers that enjoy the idea of bespoke items.
Unusual or unnecessary costs, no USP and any lack of potential strengths are considered weaknesses.
The type of customers your brand could attract based on the product you offer present an opportunity in itself.
Advancements in e-commerce, technology and fabrics also serve as opportunities to grow within.
A threat could be a competitor that may be adopting same business model as your brand.
The next step is to compare your SWOT analysis to that of your competitors and mark out the similarities and differences to help play up your strengths – seek ways to turn your threats into opportunities.
4. Marketing & Execution Plan
This section will outline your implementation process by defining how the product will reach your target market.
Prepare your execution plan by answering these;
- How do you plan on creating brand awareness?
- What sales channels will you operate through?
- Price points: Will it be competitive? What is your pricing strategy?
- How will you perform quality checks?
- Packaging: what will it cost, how will it be packaged?
- Inventory management: how will you code and tag your products? What will be the delivery lead times?
- How will you ship the product?
- What can be acceptable forms of payment, billing procedure and return policies?
Prior to launching, you could very well be doing everything by yourself, but having a team expansion plan ready should assist you with the future hiring process – ask yourself if you plan to bring on an assistant or intern, how many people should your production team comprise of and how will they be remunerated?
5. Financial Analysis
Approach this section with caution as it may require meeting with an accountant to advise you on critical matters.
Your financials should comprise of your projected income, a profit and loss account and a cash flow statement.
These documents will be a record of all your finances;
- Cost sheets usually help assess your income statement: it consists of the amount of money you’re making and where it’s going, hereby drawing out your net income after noting down all your expenses.
- Profit and loss account is where you compare your sales and expenses together to analyze if your business is going to make any money and when.
- A cash flow statement indicates where the cash inflows to your business come from (internal and external). This statement should tell you whether you have cash available at any given moment or whether you are lacking resources.
Examining your financials can prove to be daunting, but it is vital to map out your current state, as well as project the expectations of your business over the future. This section provides you a firm idea of where your business is heading.
While no business plan is set in stone, these guidelines will help you approach your start-up with much-needed preparedness. Even if the outcomes do fall short of your expectations, you may at the very least know where your business stands.