I was advising a lady who wants to start a sort of high end clothing label for preteens, but as everyone – she doesn’t have funds and is demoralized at the thought that it might be tough to get funding for her awesome business idea.
The reality is money isn’t cheap. It is only smart for investors to backup projects which have some traction or leverage: Either the venture has produced some directional progress or the entrepreneur has some entrepreneurial experience.
No one is forced to finance anyone. I often hear aspiring entrepreneurs complain that getting funding is hard. The entitlement mentality can hold a person back.
She is worried about writing a proper business plan. Every day the thought of her not pursuing her clothing business pains her.
For a new entrepreneur, the worry should be about exploring possible simple angles to at least start the business however small the steps and despite of what she doesn’t have.
She will realize her priority goal is not necessarily funding but to make the business work and mitigate risk.
A business plan is a tool required by banks to evaluate the risk of financing a business. It is like a questionnaire. However awakening it is in alerting the entrepreneur of important business concepts, it doesn’t help one forge a penetrative angle thoughtful or mindful of the limited resources.
Now, when pursuing business, given resources might be limited and scarce, one needs to figure a way to make it work inspite of. Business plans do not teach you how to do that.
This is the ethos of what the EBC business model in my book ‘Forget The Business Plan Use This Short Model’ teaches. Business plans wont teach you an angle to make a business work given the ‘have not’.
I showed her she can start bit by bit.
Her model is to make the clothes per order on a week’s turnaround. This is good and possible if she has a reliable CMT (Cut Make Trim manufacturer).
Firstly I asked her to list clothing items she would like to make, they were: jeans, shirts, caps, t-shirts and belts
I asked her to figure out which items are:
- Easy for her to make and sell.
- Hold higher value in consumer’s eye more than the others.
- Easily strike attention to her brand
- Price the buyers (parents) are willing to pay.
Belts and caps are easy to make or source. She can even buy them readymade and brand. Embroidery is the cheapest as screen print requires setup costs per print run.
The idea is not to be fancy or wait until one has the PERFECT resources. The idea is to find what is workable, get in the market with it and use the proceeds to finance the fancy stuff.
Jeans are of higher value. She discovered parents are liberal on their prices depending on how sharp the jeans are.
Well crafted jeans would strike attention. Caps also. Sharply branded t-shirts yes.
The limitation with on-order-made t-shirts is every single time she prints, a setup cost (R150 plus) is required, and it isn’t justifiable for just one item.
The idea here was to find penetrative advantage products, i.e. one or two products which are easy for her to make, finance and sell, hold higher value for the consumer and would easily cause a stir in the market thus exposing her infant brand.
Jeans and caps are products which might have that penetrative advantage in her case.
So, from thereon is for her to make samples of the products. It could be even be 2 of each. Dress her cute kid and take photos. Viva Instagram filters. Or even create a Pinterest board, then screen munch it to use as catalogue.
Then from thereon she markets the business and takes orders. The question would be where to find parents whom might have interest in her clothes but in bundles.
- The start is everyone she knows: friends, family, acquaintances etc.
- She can test her social media audience. If the clothes strike attention, the word to the right people will spread.
- Negotiate exhibition space at school activities where parents are invited.
- Depending how she feels about it, but if it were me – I would convince crèches (pay) to put the catalogues in the kids’ backpacks.
- Introduce her brand to kid’s blogs.
Nothing fancy. Interaction with the market will tell her where to improve and how to proceed.
It is about testing, without much capital outlay.