Starting a fashion brand can seem daunting at the best of times, but this is especially true when it comes to funding.

Many aspiring fashion brand owners may feel hesitant to take the leap because they fear not having enough money to start with. While it's true that starting a brand does require some investment, there are ways to be smart about your spending.

Obviously, it can be overwhelming, but don't worry - there are still options, even if you're starting from scratch with no budget.

In this post, we share some tips and strategies to help you make it work. We also discuss how to recession-proof your sustainable fashion brand and build an intentional brand that can weather any market storm. As our economy faces inflation and global events, it's important to be prepared for any downturns.

So, keep reading and let's start making your fashion dreams a reality.

1. Know Your Numbers

Let's start with the most crucial aspect of starting a sustainable fashion brand - knowing your numbers. Money is a critical factor that often holds back aspiring fashion brand owners from launching their businesses. However, it doesn't have to be a deal-breaker.

We always advise our clients to bootstrap and focus on creating a Minimally Viable Brand (MVB) to test the market, generate revenue, and grow their brand gradually. Here's a breakdown of the costs you need to consider before launching your sustainable fashion brand:

Set-Up Costs

Incorporation and Legal - It's crucial to work with a lawyer to incorporate your business and set up essential legal documents like the Terms & Conditions and Privacy Policy. These can cost around $1.5-$2k, but you can save money by taking advantage of free consultations.

PRODUCTION COSTS

(assuming you have 1-2 products only)

Design - The design costs depend on the garment's complexity and design, which can amount to around $2k.

Materials - Material costs vary depending on the quantity of fabric you need and can cost approximately $15k.

Manufacturing - Manufacturing costs also depend on the quantity, and you can negotiate a price with the manufacturer.

Marketing Costs

Let's talk about marketing costs next.

Having a website is essential for any brand. But if you DIY it, you can get started for around $600, which includes the theme and annual subscription.

In terms of advertising, social media, regular blog posts and influencers, this can cost around $8k.

However, don't let the numbers discourage you. It's important to remember that starting a fashion brand may require upfront investment and capital, but it's possible to make it work even if you're starting with limited funds.

With the right mindset and strategies, you can launch your brand without breaking the bank.

2. Managing Your Expenses

You’ve got to be strategic about when you invest in different aspects of your sustainable fashion brand. Here are some tips:

Design costs - it's best to pay for these upfront.

Development costs - paying upfront can actually save you money in the long run.

Materials and manufacturing - you can pay for these later, especially if you utilize pre-sales (more on that later).

Website, advertising and legal fees - pay for these before your launch.

By carefully managing your expenses and prioritizing essential elements of your brand, you can launch successfully without breaking the bank. Remember, many free resources are available to help you with market research and other aspects of launching a brand.

3. Simplify to Save

Launching a brand with limited funds can be tricky, but there are ways to make it work. One of the easiest ways to save on expenses is to keep things simple. The more complicated your brand is, the more time and money it will take to manage.

If you're on a tight budget, consider launching with just one or two products. Another way to keep costs low is to keep your design simple while still making it unique. This can save you thousands on design costs, and it can also make manufacturing more efficient.

Make sure that your product is something that your ideal customer wants. We don't want you to end up with unsold inventory that you can't get rid of.

Remember, keeping it simple can maximize your return on investment. For example, a simpler website theme requires less tweaking, and advertising can be streamlined by using just a few platforms.

4. Be Thrifty

Let's talk about how to be smart with your money when it comes to funding your sustainable fashion brand. It's important to be resourceful and thrifty. So take advantage of any free trials or bulk orders with manufacturers to reduce shipping costs and minimum quantities.

Don't feel bad about being resourceful - it's actually a smart business move.

5. Pre-Sales

One way to fund your production items is through a pre-sales model. By having customers pre-pay for your product, you can assess demand and determine how much inventory you need. This way, you don't have to use your own funding upfront for production costs and inventory.

You should weigh up the pros and cons before making a decision.

The Benefits:

• Customers are supporting your production and helping you gauge demand for your product.

• You can accurately determine how much inventory to produce, reducing the risk of unsold stock and wasted resources.

• Pre-sales allow you to make sales through your own website, building your brand and giving you more control over the sales process.

The Pitfalls:

• Fulfilment time may be longer, so setting clear customer expectations upfront is important.

• Per-unit costs may be higher, but the benefits of avoiding unsold inventory and having a larger order make it worthwhile.

Remember to communicate with your customers and be transparent about the pre-sale process.

It's essential to manage their expectations regarding delivery times and keep them updated throughout the process. With a bit of planning, pre-sales can be an effective way to fund your production and build a successful fashion brand.

6. Self-Funding Your Business

When it comes to the remaining costs of starting, marketing, and developing your business, self-funding is highly recommended. If you are fortunate enough to receive funding from loved ones, that's great, but it's essential to ensure that you can pay them back.

Taking a bank loan is not recommended due to high-interest rates and the stressful application process. Instead, it's best to self-fund as much as possible.

There are two potential sources of self-funding:

Savings - Ensure you set boundaries, so you don't end up putting your entire life savings into your business.

Additional income - You can work a 9-5 job or take on contract/freelance work to earn extra income. It's essential to make sure that the work doesn't take up too much of your time and mental capacity so you still have enough energy to focus on your business.

For instance, you can try doing graphic design work, bartending, or any high-paying work that doesn't take up too much time.

Staying Afloat During a Recession

Times can be tough at the moment, but you should remember that it doesn't stay that way forever.

It's essential to keep in mind that if your sales aren't doing well, it may not be a reflection of your product or your abilities, but rather external market factors. For instance, the current economic climate and layoffs may have made people hesitant to purchase clothes, causing a dip in your sales.

It's crucial to be kind to yourself and not take it personally.

As the economy is cyclical, it's important to be prepared for any potential downturns. Taking note of your emotions and journaling about them can be helpful in reassuring your future self. You can also look back at notes from the past to see how you've survived previous challenges, validating your worries and realizing that you can overcome this one too.

Remembering why you started your business in the first place is crucial, as it can help you stay motivated and push through any obstacles. To recession-proof your fashion brand, consider optimizing your supply chain, diversifying your product offerings, and building an engaged community.

Now that you've taken care of your mindset, let's move on to recession-proofing your business. Here are five strategies that will help:

Review Your Financials

Numbers are crucial for the survival of your business. You need to make money and know how much money you have left after costs. Looking at the numbers can be daunting, but facing reality is key so that you can act accordingly. Ask yourself some key questions, such as:

• How much money do you have saved up?

• How many months can you survive without sales?

• Where can you cut back on expenses?

• How can you generate additional income with your business or yourself right now? (e.g. selling gift cards, donations, freelance work, etc.)

It's common for founders to put off paying themselves, but you might need to get your income from other sources to pay the bills.

Focus on Your Target Customer

When times are tough, people are more cautious with their money. Therefore, it's essential to stay in touch with your target customer.

• What do they need right now?

• How can you support them?

• What are their pain points?

Reduce Production

It's best to decrease your production so that you don't stress about all your capital tied up in inventory that's not selling. Consider switching to a made-to-order or pre-sales model so you can estimate how much inventory you need and don't have too much capital tied up in production.

You can also produce fewer styles and quantities, but make sure they cater specifically to your target customer's needs at the moment.

Timeless Design

During challenging economic periods, customers tend to exercise more caution and thoughtfulness when making purchases, often prioritizing durable and valuable items over fleeting trends.

Consequently, this could influence your design decisions as well. It may be worthwhile to concentrate on timeless styles, understated hues, and adaptable garments that can be worn in various settings. Such an approach can inspire your clientele to feel assured about their purchases and view your brand as a dependable source for enduring, superior-quality merchandise.

Secure Your Nest Egg

It's crucial to start building your financial safety net as much as possible. Given the unpredictability of the recession's duration, it's prudent to prepare for at least six months, or preferably a year.

Be purposeful about your product offerings and contemplate innovative approaches to generate income for your enterprise. Remember that your aim is not only to endure but to flourish as well.

Rising From the Ashes of a Recession

We hope this article has provided you with useful suggestions to safeguard your sustainable fashion brand during these challenging times.

We at Word Nerd recognize how difficult these circumstances can be, and we aim to support you in keeping your business afloat. For more information, don't think twice about shooting us a message.

We've got you.