If you are putting together a business plan to raise capital from a bank, you are wasting your time and money.
There is a lot of MONEY to be made in this business, but it has to be well planned out.
No bank will lend you money to start your line or new store. They might lend you money if you have excellent credit and take out a personal loan or line of credit on your home.
We recommend you speak to a financial adviser about the risks and available funding sources. Before you ask us about SBA, it is rare for anyone to receive a loan that wasn't above prime or personally guaranteed.
In fact you wouldn't even qualify as a minority-business or women-owned business until you have been in business for three years.
The purpose of having a business plan (in our industry), is for investors and as a guide for yourself.
Every business needs to have a road map with goals and a stop-loss clause. Remember one thing about a business plan; it is a work in progress, just like any business is.
Our business plans are done in "worst case" scenario. We do it this way because the industry has too many variables that just never equal "best case. So you know if your worst case business plan works on paper it has a better chance of making it in "real life".
We don't sugar coat what it takes to make it in this business. 9 out of 10 retailers don't make it past the first year, and 8 out of 10 designers don't make it to market.
Contact us to set up an appointment. Phone 212-414-4001
Eight of the most common mistakes that we see in poorly written business plans:
- Writing the business plan based on your ego and not numbers. - No one cares who your friends are or even who you are. There are plenty of very famous people who have opened stores or started clothing lines that never made a penny.
- Trust us. You are not reinventing the wheel. - It's been done. In some way shape or form. The idea is to take what's been done and make it better. Think Starbucks-people drank coffee before they came to market.
- Too much fluff and not enough homework. All those business plan templates are redundant and never get to a point.
- Your Niche: Detail what is missing in the market and your solution: Describe how would capitalize on the situation.
- Background: Explain how your experience and background, or the team that you would put together, is the right team to handle the project. Do not write "my love of fashion since I was a child."
- Market Share- Here is where the numbers are everything. You need to show that your idea will impact enough people to be able to make money. For example, there are only 70 successful retailers in the US that carry evening dresses over the $3,000 price point.
- Competition: The investor will want to know why no one else has thought of this or what your competition is doing..both right and wrong. Please do not say I have no competition. No one is walking around naked!
- Know your numbers: Be realistic about how much money will be needed and what the return will be.