In 2013, the U.S. Bureau of Labor Statistics conducted a study that showed 24 percent of businesses failed after one year and 48 percent didn’t make it past the second year.
It’s the scary truth. Not all entrepreneurs succeed, and often it takes a few tries to create a successful business.
This is why I truly admire entrepreneurs who took the risk of starting their own business, especially those people who are not intimidated by statistics and would rather die trying than not try at all.
Luckily, we live in an age where there are effective ways to know if a business has the potential to make money. For example, in the fashion industry, you no longer need to literally walk up to people, show them your t-shirt design, and ask them if they’ll buy it (which was the case of Daymond John when he first started Fubu. Daymond John started his clothing company on the side in the early 90s while working full-time at Red Lobster. The American fashion designer, TV personality, and businessman is now worth $250 Million).
Today, we are spoilt with options and information how to build a profitable business. If you believe that fashion design is your calling, here are important things you need to know to get your business started – the right way.
Define your customer
Back in 2004, Tory Burch noticed that the market wasn’t catering to middle-aged women so she created products that are age appropriate, affordable, and luxurious in style. She started her fashion business with a specific customer in mind, and took advantage of the industry gap. In her case, she focused on ‘soccer mums’.
Tory Burch also utilised market segmentation and even dug deeper to geography, age, gender, and cultural elements to appeal to global consumers. Today, her shoulder bags and Reva flats (you probably own a pair) are a major hit and she’s competing side by side with established brands like Michael Kors and Coach and she’s winning.
This is the first step in building your fashion business. Knowing your target market will help you create a product that will match your customers’ needs. But, there are probably thousands of brands out there that cater to the same market you are targeting so don’t be discouraged. In fact, knowing which target market you cater to only gives you clear ideas with regards to price point and marketing strategy so that you can differentiate yourself.
Pro tip: Create a definitive customer profile (or customer persona) to better understand your target customers. A customer profile include broad descriptions of your buyer, and specific ones such as language, location, age, gender, attitudes, hobbies, values, the websites they read, and other important details.
Validating the need for your product is necessary
In the fashion industry there’s a term “proof of concept” which is also a recurring theme in the startup world. It is a pre-launch practice that tech entrepreneurs implement to prove if a software project concept has viable customers. It answers important concerns such as operational practicality, scalability, usability, and commercial viability.
In the fashion business, there are simple ways on how to do this. Below are some examples:
1. Create a landing page – A cost-effective way of gauging customers’ interest. It could be a simple website with a buy button or a basic online form that will allow you to quantify people’s interest.
2. Email blast – If you don’t want to spend money on a landing page, send out an email to your contacts with product images and a clear description of your product with a feedback form attached to it.
3. Set up a shop on Facebook – Another super easy way to gather information is to set up a pilot shop using Facebook business page. You can take advantage of Facebook’s visual elements to make initial sales.
4. Send out samples – This is very old-school but works just as well the other methods. It’s a great way to get tangible feedback because there’s a physical product to try and critique.
Once you proved that there’s a significant interest in your product, that’s your green light.
The next step is finding affordable and effective ways to manufacture your first batch of items.
As you go along, always ask feedback from your customers because that’s the key step in perfecting your brand.
Pro tip: Enrol in our fashion marketing course and learn how to launch and grow your label with guidance!
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