But first lets consider:

1. What is the cost?

• Consider the full cost of the goods you are taking to market before you make them or buy materials.
• End to end cost from design to delivered product.
• We advise using a costing spreadsheet which details every last penny of the costs from inception to delivery. Make sure you include: design costs / raw materials / transit to you for materials if applicable / transit to factory / provision for currency change if manufacturing over seas or using overseas fabric or trim / transit from factory for finished goods / labelling / packaging / storage / distribution (pick and pack) / freight to customer / agent, distributor or retailer’s online or sales commissions / wholesale mark up / retail mark up.
• Consider any extra charges which may have been added due to Covid-19 impact on commerce for freight and due to Brexit for any importing of materials for your product.
• Build in some contingency when you first start manufacturing, you will be ordering low quantities to start with, which will cost you more until you can scale and negotiate with the supply base. Add in extra costs for sampling as most factories charge until you start ordering in bulk.

2. Can you make a profit?

• Do you fully understand margins and mark ups?
• Be careful not to confuse margin and mark up.
• Mark up is the amount by which you mark up the cost price to reach the selling price whether that is at wholesale or retail.
• Be sure to have mark ups for wholesale and retail if you are selling at retail.
• There are some new business models who go DTC (Direct to consumer) and these set out not to sell wholesale at all, making the final product cheaper for the consumer by cutting out the wholesale mark up. Everlaine is an example of this. BUT consider this carefully as if you are going to do this you can never add in wholesale later as all your prices to consumers will be too low to make a profit and give the retailer their mark up.
• Gross profit margin expressed as a % (some call it profit margin not to be confused with net profit) is the difference between the the selling price and the cost price (=gross profit figure) expressed as a percentage of the selling price (revenue).

3. Can you control the operating costs?

• Healthy growth in the early period will be critical and controlling operational costs is the key.
• Consider this when you buy first production and avoid buying a lot of stock if you do not have buyers for it ready as this will incur storage costs and tie up your capital.
• Of course there are ways of raising funds and potential seed investors to underpin growth plans, but no one is going to invest in you if your operational costs are out of control and not going according to strategic plans, no matter how good the idea.
• We advise setting up a business bank account (it may sound obvious but keep things simple). Ensure all the business expenses go through this account.
• Operate a cashflow forecasting system which will show clearly month by month and if necessary weekly what funds you have coming in and out and stick to your budgets.

4. How will this business scale in the future?

• This is critical as if it cant be scaled up in the future, it wont be worth the effort of getting it going and it may be unlikely to deliver enough profit without scale.
• Consider how the business can be expanded and scaled for growth and development in the future.
• Could you add other products to the range?
• Could you add sub brands?
• Could you target new and different markets with the same character of product?
• Make sure the market is not too small or limited to one country or sales channel which wont deliver the scale.
• You are more likely to attract investment if you demonstrate you can scale the business

 5. Do you need training?

• Be honest about what you don’t know and seek help.
• Play to your strengths and recognise your weaknesses
• If you have a scalable idea, it will become evident very quickly that you need to be good at managing people and motivating them to be as passionate about your business as you are.
• Effective delegation is one of the most important parts of growing business – get some tips if you haven’t done it before.
• If there are aspects of the business you are not clear on, which may prevent you from making a clear strategy for growth, seek advice.

6. What are the quick marketing wins?

• Use social media to add traction for your brand with a good omni-channel focused marketing plan.
• Ensure you know how to measure promotional activity accurately for ROI (return on investment). If you do not know get help, otherwise you could waste money.
• Make a clear marketing plan and monthly activity calendar, even if you don’t have funds to spend on advertising or promotional events, you need to have a communications plan and include some brand awareness events.
• Make sure you can get the message out about your product through creative alternatives.
• Make a list of brands who are selling another product which is complementary to yours and targeting the same customer group and then make a plan to research and suggest collaborations with these like minded brands.
• Network and consider useful collaborators who you may be able to work with on a joint promotional project.
• SME’s are often willing to share data base information if they have the correct permission.
• Consider carefully which retailers could help you spread the word about your brand.
• Make sure all marketing activity is ‘on brand’ and in keeping with your desired brand positioning, there is nothing more confusing for a new brand than to be giving out mixed messages about who you are aiming at.

7. Consider Outside Expertise

• Consider taking on non executive directors with expertise in the market you are entering for focused guidance.
• There are many generalist strategic advisors but these will not help you any further than reading a book on strategy. The key is to have experts in your field who have done it before and know the pitfalls to advise, challenge and guide you in detail.
• There are Government funded schemes to help with accessing advice from experts from time to time, but make sure they know the industry you are aiming to enter well.
• The current business climate is supportive of new SME’s even post Covid-19 but consider carefully any loans and you’re a ability to earn funds to pay them back through your business.

Keep an eye out for our next blog post with more guidance for business growth. If you have any questions in the mean time please do contact us.

Picture source: Freda Thompson in a de Havilland DH.60G-111Moth Major,ca1935 Sydney Morning Herald via http://nos.twnsnd.co

The post A Few More Things To Think About Before You Fly! appeared first on Coutts Consultancy.

Our tips for 5 key initial things to think about are:

1.Why is this a good idea?

• Why didn’t someone else do this already?
• If your idea is so good and so obvious, consider whether anyone else has tried it and which market its as aimed at? If they did try it, make sure you know what happened and if it was not successful for them – why not?

For example many ideas for new fashion or clothing products come from personal experience or frustrations in not being able to find what you want. Have you considered how many people might view the conundrum the same way as you? Perhaps a range of hypoallergenic T shirts might seem a good idea to someone with very sensitive skin, but before progressing research market size and selling prices.

2. What is the Product USP?

• Why will this product shine out?
• Consider the nearest products and their USP.
• How would you convince a customer or a retailer to buy yours rather than the nearest competitor?

Most brands use words like: Value, Quality, Service, Design, Function. Consider these and know the difference between yours and the competitor. Something needs to be unique.

An example of this might be organic cotton clothing, consider whether there is a large enough market willing to pay the premium and how you will convince the consumer of the need for organic. Tipping the balance in favour of a consumer trend or ethical driver is not straight forward.

Consider why consumers may want to buy from you, what will it be about your brand which is unique or taps into your target customer’s purchasing drivers? Try to be authentic, think about how you will deliver being trustworthy, delivering the brand value you set out to.

What brands do you admire and what do they stand for? Is that why you buy from them? Considering this may help you to position your brand.

3. What is the right price?

• What will the consumer be willing to pay? Consider what the product delivers and what that is worth to the buyer.
• Its essential that early on you establish what the right selling price to the consumer is, in order to build into a sustainable business.
• Take into account that depending on how you are taking the product to market you will need to pay others their margin as well.

4. What is the market size?

• How many consumers will want this?
• This may seem irrelevant if you are selling on a small scale to start with, but nobody wants to start a business which has no future, so it is essential you research and know which market and competitors you are targeting and whether that market is growing or decreasing.

5. How to get it to market?

Considering the route to market carefully is vital because it impacts directly on the profit levels.

• Wholesale distribution – will help get your brand out into the market fast if you are lucky enough to sell to major stores or online stores. Make sure you include the right amount of retail margin for the retailer.
• Direct retailing online, – popular and straightforward for small businesses to get the product to market. However there are many hidden costs involved. Consider: website set up, product presentation, accurate, useful and convincing product copy, legal obligations for trading online, dealing with returns, dealing with out of stock situations, creating a good level of service for website customers.
• Consumer focused gift events – can be a good way to reach a target market without too many overheads, but the suitability of this depends on the product type. Consider price and margin and don’t under sell, which would upset any wholesale accounts you have who are selling with a full retail margin.
• Overseas markets – consider and research sales agents and distributors and what your margin is when you have paid commission and overseas trade fair expenses. Typical commission for agents in the fashion sector vary from 12-15%. In some regions you will need to pay show room fees as well. Most distributors will expect to make 20% margin.
• You also need to consider import duties and changes as a result of Brexit which could impact your proposed business success in certain regions, import duty can mean consumers cannot afford your, product.

Also to consider:

Costs, profit, operational costs, scaling the business, marketing and business guidance – all covered in our next updated blog.

The post Before You Fly – 5 Essential Fashion Start Up Questions appeared first on Coutts Consultancy.

[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][fusion_dropcap color=”” boxed=”no” boxed_radius=”8px” class=”” id=””]A[/fusion_dropcap]re you looking to make your clothing range in the UK? If you are new to the fashion business here’s a few tips for organisations who may be able to help.

In the last couple of years the volume of businesses we are working with who are looking to make their product in the UK has dramatically increased. This has now escalated since Covid 19 and many brands are looking to make locally to allow for increased flexibility and lower stocks and risk. Of course the bonus in this is the great quality which can be achieved in working with crafts people who have practised their skills for many years and in some cases a life time.  We have been working with fashion | beauty | interiors and consumer gift industries SME’s for many years but the ‘make it here’ approach is definitely growing!

We think this is due to a combination of factors, the increased flexibility that is available here and the lack of complexity involved when compared to importing goods for start ups, especially since Brexit with changes to import duties for many countries who may be buying your goods. (No exchange rates to consider, at least not in the supply chain part of the business). Naturally the cost is higher than it is from the Far East,  but the minimums are smaller, quality can be more tightly controlled and most importantly a strong working relationship and sometimes partnership can be built more quickly to underpin the growth of small businesses. You can also go easily to visit the factory and check your goods are being made correctly and to meet new suppliers easily in order to decide whether you will work with them.

There are many routes to gaining support in business growth within the fashion and other creatively led sectors we work with and more and more of these are looking to support British made and British designed goods. All of which is great news for SME’s and in particular British SME’s!

Over the coming months we will be posting some updates about some of the British made goods we have come across within the fashion and creative sectors and more about start ups and SME strategic tips. Here we give you some of the organisations who can help you access the best UK manufacturers and provide help with funding and business growth, we work with these organisations.

UK Fashion Manufacturing

The fashion business is worth £26 billion to the UK economy according to the British Fashion Council and they say this has grown 22% since 2009. It was forecast to be down in 2020 compared to 2019 when it was worth £35 billion due to the economic situation, now post Covid 19 it is less still, but the shoots of growth are still there in many SME’s especially when they can control their manufacturing close to home and buy in smaller batches. Much of this is made overseas due to lack of expertise and choice here and the demise in the passing on of traditional skills. This is a recurring theme in the educational and national press. Although this has been a very uncertain time for many businesses, we feel there is a chink of light at the end of the tunnel starting to appear and a trend for new and growing businesses developing in the UK to manufacture here as well as a move within the education sector to transfer these skills to new generations. There are many apprenticeship schemes alive and well now to avoid the old skills dying out within the industry.

The fashion business was estimated to be worth £26 billion to the UK economy in 2020

When we attended  ‘Meet The Manufacturer’ exhibitions in Shoreditch and at Tobacco Dock, before Covid-19, we met lots of businesses who were resurrecting the businesses their grand parents owned and ran and some who are building fantastic existing businesses. Some of the better known ones included the TV acclaimed ‘Kinky Knickers’ brand Headon and Quarmby, Vanners silks and Stephen Walters silks and luxury woven fabrics, but there were plenty of others offering great products and services for fashion start ups.

Since Covid- Make it British has been keeping in touch digitally and offering virtual events for those who want to make their goods or accessories in the UK.

Organisations Helping to Make & Grow Fashion in the UK

Make It British

‘Make it British’ is the organiser of the ‘Meet The Manufacturer – Make it British’ exhibition.  Their events do tend to be very over subscribed and manufacturers report they have found it a great way to connect with new customers. The exhibitions show case some of the new breed of British manufacturing businesses. These include the new generations within old manufacturing businesses bringing a new energy to fashion made in the UK. This movement is now gaining momentum in the UK to make here.

Some of the best features of these manufacturers are that they offer great service, energy and a fast turnaround, combined with flexibility of small order quantities – but most of all high quality which is often steeped in tradition and has ready made marketing stories which can be endorsed by those who buy from them. All assets new start ups and small fashion, textiles and creative businesses need!

We spoke to Kate Hills at Make it British after the first ever show a number of years ago now and she said “We have been very encouraged by the fantastic response to our show and the subsequent interest in our website and directory, many of our members have been inundated with interest and we are starting to see the re emergence in real terms, with business and orders, of the British made fashion industry.”

The make it British site has a directory of British manufacturers of all kinds including those outside the fashion, textiles and clothing sectors. They recently launched a celebration of Make it British with ‘MadeinUKday’ they had a great response with reach of 38.5 Million.

https://twitter.com/MakeItBritish

http://makeitbritish.co.uk .

UKFT

UKFT (UK Fashion and Textile Association) is a private trade association representing all aspects of the industry. The UKFT has a ‘Lets Make It Here” directory

http://www.letsmakeithere.org this lists fashion manufacturers in the UK. Membership is by subscription related to turnover. UKFT supports and represents the fashion industry providing meeting space, practical support and export advice to members. The Register of Designers, which is part of UKFT, offers help and advice to freelance designers and new designer businesses.

We spoke to Laurian Davies at the end of 2020, UKFT expert on business development and she said “We are helping more and more UK based businesses to find manufacturing here and to grow their businesses, whilst also contributing to a stronger UK fashion industry”.

We are big fans of UKFT as it has helped hundreds of new fashion businesses get off the ground over the years and works closely with Government to ensure the fashion industry is recognised for it’s valuable contribution to the UK economy.

The UKFT also advises on the best trade shows to attend depending on your product type and target markets, and administers the TAP scheme which offers financial help to enable you to attend the best international trade shows, http://www.ukft.org e-mail: paul.alger@ukft.org

The British Fashion Council

As a not-for-profit organisation, they rely on the generosity and commitment of Partners, Suppliers and Supporters. British Fashion Council works with its stakeholders to develop and maintain both London Fashion Week’s pivotal position in the industry, as well as providing a global platform for its Partners. They share knowledge and expertise about the industry.

Funds are from Government and commercial sponsorship. They also organise London Fashion Week https://londonfashionweek.co.uk and the British Fashion Awards http://www.britishfashionawards.com

http://www.britishfashioncouncil.co.uk

Creative Cultural Skills

Supports skills and training to ensure the UK Creative industries maintain their world class position.They work with the the Arts Council.

https://www.ccskills.org.uk

https://www.artscouncil.org.uk

Funding For Fashion

Centre For Fashion Enterprise

Provides advise and funding for fashion and creative arts businesses in the London area. They are currently a fashion tech incubator as well. They describe their work as ‘work with the next generation of iconic design innovators’. They help to fast track designers to businesses through funding. They say their successes include Erdem https://erdem.com/en-gb/, Peter Pilotto, Mary Katrantzou, Marques Almeida and Craig Green https://craig-green.com.

http://www.fashion-enterprise.com

The Business Growth Service

Offers help to British based businesses through a variety of services. Strategic planning help can be accessed with part funding if the entry conditions are right. Assistance for manufacturing businesses can also be accessed with match funded services using registered, specialist and approved expertise from MAS which is now part of the service. Specialist fashion advisors are available. http://www.greatbusiness.gov.uk/businessgrowthservice/.

Government Exporting Help

The Department for International Trade works with UK based businesses to ensure their success in International markets through exports. They do also provide funding for communication and sales related activities for British businesses looking to grow overseas markets.

https://www.great.gov.uk/?lang=en-gb

Look out for our next updated post on things to consider when starting up business.

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