Fashion Business Inc - So, You're Starting an Apparel Company?

So, You're Starting an Apparel Company?

First in a series of instructive columns about the business side of fashion.
By FRANCES HARDER, FBI Executive Director

First published 8/21/2002

If you are starting up-or thinking about it-and encountering difficulties, do not despair. You can realize your dream with a little organization and attention to industry mechanics. Let's examine some basic questions apparel entrepreneurs need to answer.

Do I have what it takes to own and to manage a small business? The key word here is "manage". Ask yourself, "Am I a self-starter? How good am I at making decisions? Do I have the physical and emotional stamina? How well do I plan and organize? Are my attitudes and drive strong enough? How will the business affect my family?"

Have I researched the market completely? You may have developed your new product due to the realization that there is a need for this product and that's a good start. Now "shop" the stores. Determine how your line might fit into the wide variety of department and specialty stores. Talk to sales people and check customers' reactions to what's on their racks. Visit the higher priced stores to research innovative firms and fashion trends. Put together a "shopping report" to show investors that you have done your homework.

What legal aspects do I need to consider? A bank account with company checks will be the first thing to consider. Licenses, zoning considerations, and on and on. An attorney or the SBA will provide specifics. Consider your tax status: corporation, partnership or sole proprietorship?

How do I find out about suppliers? Manufacturers and sales representatives? Most
Suppliers want new accounts. Consult your local library, chambers of commerce, or SBA to find trade-specific directories and listings. Trade shows and trade papers are other resources.

How much money do I need to get started? One of the leading causes of business failure is insufficient start-up capital. If you can begin small, it may be possible to keep your day job and start your new venture on the side. Without a second income, you must have enough money in the business to cover operating expenses for one year, maybe two.

What do I have to do to get a loan? Loans are a good alternative but require solid organization. Specific loans are available for women and minorities and your local SBA can be very helpful for all applicants. When you apply for a loan, a clear description of your experience and a cohesive business plan will be required. A future column will detail this process.

There are many more crucial questions to consider; I'm tempted to go on but there's not enough room. Next month we will consider licensing, bookkeeping and partnerships. Until then, keep up the hard work!