Fashion Business Plan Template

Written by Dave Lavinsky
fashion business plan template
Table of Contents
Table of Contents

Fashion Business Plan Template

If you want to start your own Fashion Company or expand your current business, you need a business plan.

The following Fashion business plan template gives you the key elements to include in a winning business plan. In addition to this template, conducting research on the fashion industry will help you better understand the business, identify your target market and help implement a smart marketing plan and strong financial plan.

You can download our fashion business plan template (including a full, customizable financial model) to your computer here.

 

Sample Fashion Business Plan

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] provides chic and effortless style. [Company Name] offers a full range collection where each piece is special individually. [Company Name] creates timeless 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 herself, she was an assistant to a fashion designer previously. As such [Founder] has an in-depth knowledge of the fashion 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] will be highly convenient to a significant numbers of shoppers.
  • The management team has a track record of success in the fashion and clothing business.
  • The fashion industry is a proven business and has succeeded throughout the United States.

Financial Highlights

[Company Name] is currently seeking $200,000 to launch. Specifically, these funds will be used as follows:

  • Office/Workspace Design & Build-out: $85,000
  • Equipment: $65,000
  • Working capital: $50,000 to pay for supplies, marketing and salaries until [Company Name] reaches break-even.

Top line projections over the next five years are as follows:

Financial SummaryFY 1FY 2FY 3FY 4FY 5
Revenue$560,401 $782,152 $1,069,331 $1,379,434 $1,699,644
Total Expenses$328,233 $391,429 $552,149 $696,577 $776,687
EBITDA$232,168 $390,722 $517,182 $682,858 $922,956
Depreciation$7,000 $7,000 $7,000 $7,000 $7,000
EBIT$225,168 $383,722 $510,182 $675,858 $915,956
Interest$6,016 $5,264 $4,512 $3,760 $3,008
Pre Tax Income$219,152 $378,458 $505,670 $672,098 $912,948
Income Tax Expense$76,703 $132,460 $176,985 $235,234 $319,532
Net Income$142,449 $245,998 $328,686 $436,864 $593,416
Net Profit Margin25%31%31%32%35%

 

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 and offers a full range collection where each piece is special individually. [Company Name] creates timeless 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 Population312,796,426
Population Male49.00%
Population Female51.00%
Median Age37.5
Target Population by age
Age 25 to 3413.08%
Age 35 to 4412.94%
Target Population by Income
Income $50,000 to $74,99918.03%
Income $75,000 to $99,99912.97%
Income $100,000 to $124,9998.65%
Income $125,000 to $149,9995.40%
Income $150,000 to $199,9995.12%
Income $200,000 and Over5.34%

Customer Segmentation

We will primarily target the following three customer segments:

  1. Wealthy Women: The line will attract wealthy women looking to dress fashionably.
  2. Independent Fashion Women: These women seek fashion, but look for independent labels and brands
  3. Professional Women: Professional women will seek out high fashions for their career wardrobes

 

V. Competitive Analysis

Direct and 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 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

ChelseaHelmut LangHaute 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

You can download our fashion business plan template (including a full, customizable financial model) to your computer here.

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 charity 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:

DateMilestone
[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]is led by [Founder’s Name] who has been in the fashion business for 20 years. While [Founder] has never run a clothing line herself, she was assistant to a fashion designer previously. As such [Founder] has an in-depth knowledge of the fashion business including.

[Founder] has personal relationships with salespeople at a variety of high-end department stores and boutiques

[Founder] graduated from the University of ABC where she 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 $200,000 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:

  • Office/Workspace Design & Build-out: $85,000
  • Equipment: $65,000
  • Working capital: $50,000 to pay for supplies, marketing and salaries 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 statements over the next five years.

Retail Price% of CollectionWholesale PriceCost of Production
Jackets$227.0017%$117.98$58.93
Dresses$220.0022%$114.23$54.92
Tops$134.0031%$68.43$36.23
Bottoms$167.0025%$86.88$48.45
Scarves$78.003%$39.53$24.03
Accessories$75.003%$38.25$24.75
5 Year Annual Income Statement
Year 1Year 2Year 3Year 4Year 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 1Year 2Year 3Year 4Year 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 1Year 2Year 3Year 4Year 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

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