Clothing Line Business Plan Template
If you want to start a Clothing Line business or expand your current Clothing Line, you need a business plan.
The following Clothing Line business plan template gives you the key elements to include in a winning clothing brand business plan.
Clothing Line Business Plan Example
I. Executive Summary
Business Overview
[Company Name], is a Bohemian-inspired clothing brand emphasizing chic, urban designs that highlight the wearer’s playful and artistic side. Our clothing line will be sold in select specialty boutiques on the East Coast and then expand into wholesale to reach a greater number of stores and, eventually, department stores. It will also aim to sell via ecommerce on third party sites and will explore the incorporation of an ecommerce platform on its own site later in the year.
Products and Services
[Company Name]will offer a women’s clothing line that is exquisite and sophisticated, as well as practical and wearable. [Company Name] breathes provides chic and effortless style. [Company Name]offers a full range collection where each piece is special individually. [Company Name]creates inimitable pieces that can be worn for years; combined with basics or trends.
Customer Focus
[Company Name] will primarily serve women aged 25-44 with disposable income. The demographics of these customers are as follows:
- 150 million women in the U.S.
- Average income of $54,700
- 38.9% married
- 49.6% in Mgt./Professional occupations
Management Team
[Company Name]is led by [Founder’s Name] who has been in the clothing business for 20 years. While [Founder] has never started a clothing line himself, he was an assistant to a fashion designer previously. As such [Founder] has an in-depth knowledge of the clothing line business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- [Company Name]provides high fashion, quality and affordability all at once. Much of designer fashion has shifted towards mass production. With an increasing desire to differentiate, especially through attire, young affluent individuals are looking to brands that provide the same level of quality as the traditional high-end brands, but with designs that are not commonly found everywhere.
- With many point of sale options, [Company Name] and will thus be highly convenient to significant numbers of shoppers.
- The management team has a track record of success in the fashion and clothing business.
- The clothing line business is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $330,000 to launch. Specifically, these funds will be used as follows:
- Costs of Goods: $165,000
- Working capital: $165,000 to pay for marketing and salaries, until [Company Name] reaches break-even.
Top line projections over the next five years are as follows:
II. Company Overview
Who is [Company Name]?
[Company Name], is a Bohemian-inspired clothing brand emphasizing chic, urban designs that highlight the wearer’s playful and artistic side. Our clothing line will be sold in select specialty boutiques on the East Coast and then expand into wholesale to reach a greater number of stores and, eventually, department stores. It will also aim to sell via ecommerce on third party sites and will explore the incorporation of an ecommerce platform on its own site later in the year.
[Company Name]will offer a women’s clothing line that is exquisite and sophisticated, as well as practical and wearable. [Company Name]provides chic and effortless style. [Company Name]offers a full range collection where each piece is special individually. [Company Name]creates inimitable pieces that can be worn for years; combined with basics or trends.
[Company Name] was founded by [Founder’s Name]. She started creating and making dresses at the age of 12. Growing up in Amsterdam and the South of France, she devoted herself solely to fashion design. She has also collaborated with major brands such as Ralph Lauren. From her world travels, she fell in love with the chic Bohemian style. All designs are world-inspired and European-influenced with a Bohemian twist.
[Company Name]’s History
[Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected three initial manufacturing locations and is currently undergoing due diligence on each property to assess which will be the most profitable location for operations.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and website located at www…
- Determined the list of products to be offered
- Determined equipment and inventory requirements
- Identified 20 potential suppliers
[Company Name]’s Products
Below is [Company Name]’s initial list or product categories. Where appropriate, items are offered for Infant, Toddler, and Pre-School ages.
- Tops (long sleeve and short sleeve)
- Bottoms (pants, skirts, skorts, shorts)
- Sleepwear
- Swimwear
- Accessories
- Shoes
- Sweaters
- Jeans
- Dresses
- Outerwear
- Skirts
III. Industry Analysis
[Company Name] directly or indirectly competes with other fashion designers and clothing lines. Competition will come from mass market clothing brands as well as independent fashion designers.
Industry Statistics & Trends
The following industry size facts and statistics bode well for [Company Name].
Over the next five years, the Fashion Designers industry is poised for further growth. Industry revenue will benefit from rising per capita disposable income and increased consumer confidence; it will also be aided by downstream apparel-manufacturing industries. As consumers demand trendier yet reasonably priced items, department stores will continue collaborating with designers to create product lines with mass appeal. Additionally, as the fast-fashion retail model continues to flourish, retailers will require more designer services in order to quickly replicate looks from New York Fashion Week and other highly visible international fashion shows. These factors will propel industry growth at a projected annual average of 6.7%.
Fashion design is a relatively high-profit activity. Industry operators make functional and aesthetically pleasing designs for clothing, jewelry and accessories out of raw inputs such as fabric, precious metals and leather. The value added to the initial input is significant, which translates into high profit margins for many industry operators. As the economy continues to expand and trends like collaborations and flash fashion propel the industry forward, profit margins are expected to remain stable.
As global economic conditions continue to recover, international demand for designs created in the United States will strengthen. Domestic designers are expected to steadily capture an increasing share of the global fashion design markets (e.g. apparel, footwear and jewelry), while retaining their position in the US market. While the production of clothing and accessories will likely continue to move offshore to low-wage countries in Asia (and potentially Africa), the design process remains a core and vital function to product development and will be kept local.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name]will serve women in the U.S. aged 25-44 with disposable income.
The precise demographics of this market are as follows:
United States | |
---|---|
Total Population | 312,796,426 |
Population Male | 49.00% |
Population Female | 51.00% |
Median Age | 37.5 |
Target Population by age | |
Age 25 to 34 | 13.08% |
Age 35 to 44 | 12.94% |
Target Population by Income | |
Income $50,000 to $74,999 | 18.03% |
Income $75,000 to $99,999 | 12.97% |
Income $100,000 to $124,999 | 8.65% |
Income $125,000 to $149,999 | 5.40% |
Income $150,000 to $199,999 | 5.12% |
Income $200,000 and Over | 5.34% |
Customer Segmentation
We will primarily target the following three customer segments:
- Wealthy Women: The line will attract wealthy women looking to dress fashionably.
- Independent Fashion Women: These women seek fashion, but look for independent labels and brands
- Professional Women: Professional women will seek out high fashions for their career wardrobes
V. Competitive Analysis
Direct & Indirect Competitors
The following independent clothing lines offer unique clothing for women with disposable incomes thus providing either direct or indirect competition for [Company Name]:
Chelsea Flower
Chelsea Flower debuted in 2007 with a soft yet edgy style that the brand is now known for. Strong shapes combined with unexpected details add up to an eclectic mix of sexy and cool. The line provides wearers an effortlessly cool urban chic look that many young women love. After only three years, the label has already found its way into the best stores world-wide and into the closets of major style-setters.
Though the brand matches Sunaj’s price points, the two are stylistically different and appeals to different consumers.
Helmut Lang
Created by Austrian fashion designer Helmut Lang in 1986, the brand is known for its simple, but refined designs. Relaunched in 2007, the brand now exists more as an affordable label. Now run by new creative directors, the brand continues to maintain its original modern, minimalistic roots while exhibiting a combination of “street edge” and femininity.
Though similar in quality, this brand differs from the Company significantly in style and carries a higher price point.
Haute Hippie
By emphasizing the art of layering and by embracing eclectic style and sophistication, Haute Hippie acts as a go to brand for fashion basics, layering items and lounge wear. With a designer aesthetic and contemporary pricing, the brand provides inspired everyday looks and attainable luxury.
Though similar to Sunaj stylistically, the brand still bears a higher price point.
Competitive Pricing
Chelsea | Helmut Lang | Haute Hippie | |
---|---|---|---|
Sweaters | $30-$40 | $100-$150 | $50-$60 |
Pants/Jeans | $60-$80 | $150-$200 | $60-$75 |
Dresses | $40-$60 | $100-$150 | $75-85 |
Tops | $30-$40 | $75-$150 | $40-$60 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Consumer Demand for Unique Designs: [Company Name] will focus solely on unique clothing not available through mass market channels.
- Management: Our management team has years of fashion experience that allows us to sell to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having been in the fashion community for years, [Founder’s Name] knows all of the relevant players and media outlets. As such, it will be relatively easy for us to build branding and awareness of our store.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering high-quality, unique fashionable clothing
- Rotating clothing to always offer clothing for the proper season geared towards gift-giving
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be women in the U.S. aged 25-44 with disposable income. The Company’s promotions strategy to reach these individuals includes:
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in newspapers and sponsor fashion and chairty events in order to gain awareness.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the store, [Company Name] will organize pre-opening events to create buzz and awareness for [Company Name].
Direct E-mail
[Company Name] will utilize an existing client book and begin to capture email addresses at various events and directly through their website. Newsletters will be sent out at the beginning of each month and include updates about the collection, new postings on the company blog, behind the scenes materials and other brand related information.
Fashion Shows
Fashion shows are generally events where a collection premieres, designer launches, and new runway trends are shown, and are thus the most connected and widely attended events for the Company’s targeted members.
The most well known fashion show is the New York Fashion Week, now known as Mercedes-Benz Fashion Week, which expands globally each season.
Pricing Strategy
[Company Name] pricing will be appropriate for the high quality and level of service associated with the store. Pricing will be on par with Helmut Lang.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative and Management Functions
- General &administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing suppliers and managing supplier relations
Design Functions
- Pattern marking, grading and scanning
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
Date | Milestone |
---|---|
[Date 1] | Finalize lease agreement |
[Date 2] | Design and build out [Company Name] |
[Date 3] | Hire and train initial staff |
[Date 4] | Launch [Company Name] |
[Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] was founded by [Founder’s Name]. She started creating and making dresses at the age of 12. Growing up in Amsterdam and the South of France, she devoted herself solely to fashion design. She has also collaborated with major brands such as Ralph Lauren. From her world travels, she fell in love with the chic Bohemian style. All designs are world-inspired and European-influenced with a Bohemian twist.
[Founder] has personal relationships with salespeople at a variety of high-end department stores and boutiques
[Founder] graduated from the University of ABC where he majored in Fashion design.
Hiring Plan
[Founder] will serve as the CEO. In order to launch, we need to hire the following personnel:
- Assistant Manager
- Designers
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of clothing to customers and wholesalers.
The major costs for the company will be cost of goods sold (supplier costs), salaries of the staff, and rent for a production location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name is seeking a total funding of $330,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Design/build: approximately $165,000
- Working capital: approximately $165,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions & Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
Retail Price | % of Collection | Wholesale Price | Cost of Production | |
---|---|---|---|---|
Jackets | $227.00 | 17% | $117.98 | $58.93 |
Dresses | $220.00 | 22% | $114.23 | $54.92 |
Tops | $134.00 | 31% | $68.43 | $36.23 |
Bottoms | $167.00 | 25% | $86.88 | $48.45 |
Scarves | $78.00 | 3% | $39.53 | $24.03 |
Accessories | $75.00 | 3% | $38.25 | $24.75 |
5 Year Annual Income Statement
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
---|---|---|---|---|---|---|
Revenues | ||||||
Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
Expenses & Costs | ||||||
Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
---|---|---|---|---|---|---|
ASSETS | ||||||
Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
LIABILITIES & EQUITY | ||||||
Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
Share Capital | $0 | $0 | $0 | $0 | $0 | |
Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
---|---|---|---|---|---|
CASH FLOW FROM OPERATIONS | |||||
Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
CASH FLOW FROM INVESTMENTS | |||||
Investment | ($246,450) | $0 | $0 | $0 | $0 |
Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
CASH FLOW FROM FINANCING | |||||
Cash from equity | $0 | $0 | $0 | $0 | $0 |
Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
SUMMARY | |||||
Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |