Fashion Industry business plan for starting your own agency
One of the best ways to live your dream life is to have a business of your own, a setup where you are the boss, and you can make all the money that you need to fulfill all your dreams. If you want to start your business today, this business plan for fashion can help you achieve your dreams. We will tell you in detail how to write a fashion business plan. In this detailed business plan template for fashion industry, we will cover everything involved in starting the business from start tom finish. This can be used as a guide to start the business or as a investment group business plan.
Executive Summary
2.1 The Business
Apple Fashion will be a fashion industry located in Paris, France. This business plan for fashion industry will walk you through all the steps needed to start the business and run it in a profitable manner. We are writing a fashion business plan based on this example so that you can easily start your own business.
2.2 Management of Fashion Industry
The first thing you need to have for starting a fashion business plan is a well-defined management structure for the business. Without that, you cannot effectively start and profitably run the business. Go to any of the top business plan companies and the first thing they’ll discuss will be the management structure of the business you want to start.
Just like we did in the clothing retail business plan, the business will be headed by the owner and they will hire managers to run various aspects of the business. They key to the success of this business is appointing the right person on the right position.
2.3 Customers of Fashion Industry
Like any other business, it is important to decide the customers that you will be dealing as a part of the business. If you do not have a clear idea of the customers, you will be dealing, the business can never be profitable. The customers of the fashion industry will be the following:
- People who want custom-made designer clothing and accessories.
- Movie crews who need costumes for a movie.
- Retail stores who want to market premium clothing and accessories.
- People looking for wedding and party dresses.
2.4 Business Target
The target of the business is to make designer clothes available and affordable for everyone. With this business, we hope to decrease the prices of premium clothing. Other than that, making profit is also a target of this business.
Moreover, we also want to expand to other cities and start a franchise business model for expanding the reach of our products. The ultimate goal is global domination and competing with the likes of Louis Vuitton, Gucci, and Parada.
Company Summary
3.1 Company Owner
Sarah Carnegie is the person who will be the owner of the business. She is a veteran fashion designer from America holding many awards and accolades. She also happens to be quite rich and generating the funds for the business will not be an issue for her. All that makes Sarah the best candidate for this business plan fashion industry.
3.2 Why the Fashion Industry is being started?
The next thing that we need to talk about is why the fashion startup business plan is being started. There are a number of reasons for that. First and foremost, Sarah always wanted to start a luxury clothing and accessories line of herself and now is the time for her to do it. Secondly, Sarah has recently been fired from her job and she no longer wants to be the employee, she wants to be the boss. With the hundreds of millions of dollars burning a hole in her account, she can do whatever she wants.
3.3 How the Fashion Industry will be started?
Note
One of the most important things to discuss in any start up fashion business plan is how the business will be started. Thankfully, this fashion business plan template free includes that too.
Step1: Market Need Analysis
The first thing needed to be done before starting the business is market need analysis. This will tell us whether or not there is a need for the services we are going to provide. Just like a lingerie boutique business plan, the business cannot be successful without it.
Step2: Developing a Brand
This is the single most important part in this whole business. Luxury goods are only as good as the brand name printed on them. We need to establish Apple Fashion as a brand that people can trust if we want to see any measure of success in the business.
Step3: Opening an Outlet
The first outlet of the business will be opened right in the front of Eiffel Tower in Paris. That must be expensive but remember the hundreds of millions of dollars burning a hole in Ms. Carnegie’s account? She’ll use them.
Step4: Establishing an Online Presence
Having an online presence is perhaps even more important than having an outlet in front of the Eiffel Tower. Thankfully though, it is not as expensive as that. So Sarah will hire a web designer to make a website for her brand to make the brand known to the public.
Step5: Promotion and Marketing
Next up, collaboration will be done with prominent celebrities to endorse and promote the products from Sarah’s brand. This is also very important because people follow these people and we can use that as leverage to create sales.
| Start-up Expenses | |
| Legal | $254,000 |
| Consultants | $0 |
| Insurance | $35,000 |
| Rent | $30,000 |
| Research and Development | $28,000 |
| Expensed Equipment | $54,000 |
| Signs | $4,100 |
| TOTAL START-UP EXPENSES | $405,100 |
| Start-up Assets | $342,000 |
| Cash Required | $357,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $234,000 |
| Long-term Assets | $276,000 |
| TOTAL ASSETS | $1,248,000 |
| Total Requirements | $1,653,100 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $405,100 |
| Start-up Assets to Fund | $1,248,000 |
| TOTAL FUNDING REQUIRED | $1,653,100 |
| Assets | |
| Non-cash Assets from Start-up | $1,629,000 |
| Cash Requirements from Start-up | $386,000 |
| Additional Cash Raised | $53,000 |
| Cash Balance on Starting Date | $39,000 |
| TOTAL ASSETS | $2,107,000 |
| Liabilities and Capital | |
| Liabilities | $30,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $48,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $78,000 |
| Capital | |
| Planned Investment | $1,653,100 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,653,100 |
| Loss at Start-up (Start-up Expenses) | $375,900 |
| TOTAL CAPITAL | $2,029,000 |
| TOTAL CAPITAL AND LIABILITIES | $2,107,000 |
| Total Funding | $1,653,100 |
Services
The next important thing is finalizing the services that the business will offer. There can be a million services that an example of a fashion business plan can have, However, obviously, we cannot start providing every single one of the services. That will not be a smart move. We are a bunch of smart people and we need to make a really smart move in the fashion business plan samples that we create.
The services included in this fashion business plan pdf will be:
Costume Design
The main service of the fashion industry will be to design costumes for movies and TV.
Wedding Dress Design
People who want designer dresses for their wedding can also hire our services to get the dresses designed.
Theme Dress Design
Dress designing for theme parties will also be one of the services.
Custom-Made Accessories
We will also design, manufacture, and commission custom-made fashion accessories for our customers.
Marketing Analysis of Fashion Industry
Business Plan for Investors
The single most important part of any fashion business plan examples is the marketing analysis of the business. It is in this step that we have a look at what the market needs and how we can make a name in the market. This step is also a part of the streetwear brand business plan, but it is even more important here because the fashion industry is a congested one and the only way to make a profit is by careful marketing analysis.
Market trends and marketing segmentation are some of the most important parts of any fashion business plan presentation. Let’s have a look at them.
5.1 Market Trends
Having a look at the market trends is very important for writing a fashion company business plan. If we have a look at the market trends of the industry over the last decade, people have moved towards economically priced fashion accessories and products. If we are in for starting a fashion label business plan, the best way is to offer premium goods at a discounted price. By doing that, we can get a lot of customers and make a lot of profit.
5.2 Marketing Segmentation
No fashion marketing plan example can be complete without the proper marketing segmentation. Here’s the marketing segmentation that faces our business:
5.2.1 Showbiz
The biggest market segment for the business will be the showbiz industry.
5.2.2 Private Customers
People who want custom-made dresses and accessories will also be a main market segment for us.
5.2.3 Small Businesses
Small businesses that show an interest in our business can sell our product and will make a market segment for us.
5.2.4 Retail Customers
The standard clothing and accessories made by the business will be sold through our own outlets to the retail customers.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Showbiz | 30% | 35,000 | 36,000 | 38,000 | 40,000 | 41,000 | 10.00% |
| Private Customers | 27% | 29,000 | 30,000 | 32,000 | 33,000 | 35,000 | 10.00% |
| Small Businesses | 23% | 21,000 | 23,000 | 25,000 | 27,000 | 28,000 | 10.00% |
| Retail Customers | 20% | 18,000 | 19,000 | 21,000 | 23,000 | 25,000 | 11.00% |
| Total | 100% | 103,000 | 108,000 | 116,000 | 123,000 | 129,000 | 10% |
5.3 Business Target
- To become the most esteemed fashion goods producer in the world.
- To make luxury fashion goods accessible for everyone.
- To gain fame and recognition.
5.4 Product Pricing
The products of Apple Fashion will be priced below what the competition asks for their products. This will be done to make sure that we get business and the goal of making fashion products affordable for everyone can be realized.
Marketing Strategy
Just like a sewing business plan, we need to have a solid marketing strategy to make the business a success. This sample fashion business plan does contain that and will guide you how to use it. While making a marketing strategy for business plan examples fashion, the things that you need to focus on include the competitive analysis and sales strategy. Once you complete that, you can easily start the business and make it a success.
6.1 Competitive Analysis
Here’s the competitive analysis for this fashion business proposal:
- We have better designer than any of the competing brands in Europe.
- Our prices are lower than all of the competitors.
- We have a better sales strategy than any of the other companies in the sector.
6.2 Sales Strategy
If you want to know how to write a fashion article, you’ll need to be able to make sales strategy for the business. Here’s the sales strategy:
- We will hire the services of celebs to promote and endorse the product.
- Discounted rates will be offered to the buyers at the start.
- We will offer better value for money compared with any other of the competitors.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Costume Design | 50,000 | 53,000 | 56,180 |
| Wedding Dress Design | 44,000 | 46,640 | 49,438 |
| Theme Dress Design | 52,000 | 55,120 | 58,427 |
| Custom-Made Accessories | 40,000 | 42,400 | 44,944 |
| TOTAL UNIT SALES | 186,000 | 197,160 | 208,990 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Costume Design | $51.00 | $59.16 | $68.63 |
| Wedding Dress Design | $60.00 | $69.60 | $80.74 |
| Theme Dress Design | $53.00 | $61.48 | $71.32 |
| Custom-Made Accessories | $42.00 | $48.72 | $56.52 |
| Sales | |||
| Costume Design | $2,550,000.00 | $3,135,480.00 | $3,855,386.21 |
| Wedding Dress Design | $2,640,000.00 | $3,246,144.00 | $3,991,458.66 |
| Theme Dress Design | $2,756,000.00 | $3,388,777.60 | $4,166,840.94 |
| Custom-Made Accessories | $1,680,000.00 | $2,065,728.00 | $2,540,019.15 |
| TOTAL SALES | $9,626,000.00 | $11,836,129.60 | $14,553,704.96 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Costume Design | $49.00 | $56.00 | $64.00 |
| Wedding Dress Design | $58.00 | $66.00 | $76.00 |
| Theme Dress Design | $51.00 | $58.00 | $67.00 |
| Custom-Made Accessories | $40.00 | $45.00 | $52.00 |
| Direct Cost of Sales | |||
| Costume Design | $2,450,000.00 | $2,968,000.00 | $3,595,520.00 |
| Wedding Dress Design | $2,552,000.00 | $3,078,240.00 | $3,757,318.40 |
| Theme Dress Design | $2,652,000.00 | $3,196,960.00 | $3,914,622.40 |
| Custom-Made Accessories | $1,600,000.00 | $1,908,000.00 | $2,337,088.00 |
| Subtotal Direct Cost of Sales | $9,254,000.00 | $11,151,200.00 | $13,604,548.80 |
Personnel plan
Just like we discussed in the thrift store business plan, it all comes down to the people that will run the fashion business plan sample pdf and will make it a commercial success. It is also in the objectives of a fashion business to make sure that we create employment for people. The company will be run by the following people.
7.1 Company Staff
- Sarah Carnegie will be the owner and CEO of the business.
- 2 managers for operations, external relations marketing.
- 6 Fashion designers.
- 2 Brand Ambassadors.
- 2 Social media promoters.
- 2 Web developers.
- 1 Retail shopkeeper.
- 1 guard.
- 1 reception clerk.
- 1 telephone operator.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Operations Manager | $13,000 | $14,300 | $15,730 |
| External Relations Marketing | $12,000 | $13,200 | $14,520 |
| Fashion Designers | $60,000 | $66,000 | $72,600 |
| Brand Ambassadors | $20,000 | $22,000 | $24,200 |
| Social Media Promoters | $20,000 | $22,000 | $24,200 |
| Web Developers | $18,000 | $19,800 | $21,780 |
| Retail Shopkeeper | $10,000 | $11,000 | $12,100 |
| Reception Clerk | $8,000 | $8,800 | $9,680 |
| Guard | $9,000 | $9,900 | $10,890 |
| Telephone Operator | $7,000 | $7,700 | $8,470 |
| Total Salaries | $177,000 | $194,700 | $214,170 |
Financial Plan
Before we wrap up the fashion business plan template pdf, it is important to have a look at the money involved in starting the business. This business will cost more money to start than the embroidery business plan. We will need money for:
- The cost of setting up the store.
- Setting up the production facility.
- The salaries of employees for the time before we start making profit.
- The cost of marketing and promoting the business.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.15% | 8.21% | 8.26% |
| Long-term Interest Rate | 8.39% | 8.45% | 8.50% |
| Tax Rate | 24.12% | 24.45% | 25.80% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,600 |
| Assumptions: | |
| Average Per-Unit Revenue | $234.00 |
| Average Per-Unit Variable Cost | $0.66 |
| Estimated Monthly Fixed Cost | $163,400 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $9,626,000 | $11,836,130 | $14,553,705 |
| Direct Cost of Sales | $9,254,000 | $11,151,200 | $13,604,549 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $9,254,000 | $11,151,200 | $13,604,549 |
| Gross Margin | $372,000 | $684,930 | $949,156 |
| Gross Margin % | 3.86% | 5.79% | 6.52% |
| Expenses | |||
| Payroll | $177,000 | $194,700 | $214,170 |
| Sales and Marketing and Other Expenses | $135,700 | $139,000 | $144,000 |
| Depreciation | $2,200 | $2,350 | $2,480 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,700 | $2,800 | $2,900 |
| Payroll Taxes | $30,000 | $31,000 | $32,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $352,600 | $374,950 | $400,750 |
| Profit Before Interest and Taxes | $19,400 | $309,980 | $548,406 |
| EBITDA | $19,400 | $309,980 | $548,406 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $3,880 | $61,996 | $109,681 |
| Net Profit | $15,520 | $247,984 | $438,725 |
| Net Profit/Sales | 0.16% | 2.10% | 3.01% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $54,000 | $58,320 | $62,986 |
| Cash from Receivables | $20,000 | $21,600 | $23,328 |
| SUBTOTAL CASH FROM OPERATIONS | $74,000 | $80,660 | $87,113 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $81,000 | $88,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $43,000 | $45,000 |
| Bill Payments | $23,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $65,000 | $71,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $65,000 | $70,200 | $75,816 |
| Net Cash Flow | $19,000 | $20,000 | $22,000 |
| Cash Balance | $30,000 | $31,000 | $32,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $278,000 | $311,360 | $342,496 |
| Accounts Receivable | $25,000 | $28,000 | $31,472 |
| Inventory | $4,200 | $4,704 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $286,000 | $320,320 | $360,040 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,000 | $26,880 | $30,240 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,200 | $21,504 | $24,170 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $16,500 | $18,480 | $20,772 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $56,000 | $61,040 | $67,144 |
| Earnings | $199,000 | $216,910 | $238,601 |
| TOTAL CAPITAL | $287,000 | $312,830 | $344,113 |
| TOTAL LIABILITIES AND CAPITAL | $303,500 | $329,280 | $370,440 |
| Net Worth | $298,000 | $324,820 | $357,302 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.28% | 8.07% | 8.94% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.28% | 10.28% | 11.39% | 9.80% |
| Inventory | 5.44% | 6.03% | 6.68% | 9.90% |
| Other Current Assets | 2.30% | 2.55% | 2.82% | 2.40% |
| Total Current Assets | 151.00% | 152.00% | 152.00% | 158.00% |
| Long-term Assets | 11.50% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.96% | 5.00% | 5.05% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.45% | 7.51% | 7.58% | 7.38% |
| NET WORTH | 100.58% | 101.38% | 102.32% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.80% | 97.36% | 100.09% | 99.00% |
| Selling, General & Administrative Expenses | 93.59% | 96.12% | 98.81% | 97.80% |
| Advertising Expenses | 1.51% | 1.55% | 1.59% | 1.40% |
| Profit Before Interest and Taxes | 41.00% | 42.11% | 43.29% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 34 | 35.2 | 36.08 | 33 |
| Total Debt to Total Assets | 0.18% | 0.17% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.00% | 74.70% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 95.00% | 99.75% | 104.74% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.00% | 34.02% | 35.08% | N.A. |
| Return on Equity | 55.20% | 56.91% | 58.68% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 33 | N.A. |
| Accounts Payable Turnover | 15 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $249,000 | $262,944 | $277,669 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.86 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29.5 | 29.8 | 29.9 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |