No Risk? Then, No Sales.

Taking a risk in today’s business economic climate is a difficult step but necessary in order to develop and grow your retail or branded company for apparel and footwear.

During Magic in February, Los Angeles fashion industry executives Frances Harder, Dana Fried, David Perry, Robert Greenspan, Staci Riordan and Ernesto Mantilla examined the various aspects of planning, merchandising, branding, sales and international marketing opportunities for a US fashion business.

The panel offered these expert tips before starting and expanding your business in a global market place.

Develop A Business Plan or Strategic Roadmap

If a designer wants to make $1 million their first season, they need to have $250,000 in liquid capital. It's easy for new businesses to make a $10-, $20- or $50,000 mistake their first year. As a new company, designers have to be very frugal; ditch the Starbucks and make coffee at home.

A designer can start a line with less than $250,000. Successful lines have launched with $12,000 to $50,000 and made $1 million to $2 million in their first 24 months. Those lines had both a business plan and a strategic marketing plan. Designers must have a business plan, especially if they're seeking investment funding.

Expert Manufacturing and Product Development Advice

Sourcing and manufacturing are "seamless" operations. Regardless of how a designer plan their line or who their partners are, they have to be prepared. Things don't go they way you plan them. If something can go wrong in production, it will.

Digital Resource: Fashion Incubator. Author, Kathleen Fansella, is a 27-year apparel industry veteran and author of The Entrepreneur’s Guide to Sewn Product Manufacturing. The site is a must read for any one starting their own line.

Legalities of Fashion: Advice from Staci Riordan

In the US, a designer gets common law rights to their brand name when they use it, but if they don't legally register it, they don't own it. It costs $2,000 to $3,000 to register a name and can take up to 24 months to get it registered.

When you name your company, you must federally trademark your name for it to become an asset of your company or for you to truly own it. If you are going to use your own personal name, consider registering the trademark in your name personally, as compared to the company, and then license it to the company for a nominal fee. Please note, though, if you have partners, this will be very challenging.

Finding Sales Representation
When a sales rep takes on your line, they want to know that you have finances in place and are able to fill orders for their clients.

Sales reps are usually paid every 90-120 days, and the average sales commission for 2010 is 12 percent. Don't be surprised if showrooms or sales reps ask for cash up front; many have monthly base fees of $550 - 1500 per month just to have a designer's product line in the show room. Most sales reps and showrooms don't take lines if they have no sales history because of the high risk of not being able to fulfill orders.

Digital Resource: How do you find good sales representation? Online, of course! We featured FindFashionRep.com, digital resource for brands and sales reps to connect online, last month.

FindFashionRep.com own Kelli Nelson offers this advice to brands or designers seeking representation:

"Have a clear understanding of who your customer is. Observe trade shows and showrooms and then speak to the reps at the show rooms that you'd think would be a good fit for your product line. Always check references of the showrooms and sales representatives you wish to work with."

The No Risk, No Sales business panel was extremely enlightening for brands and designers who wanted to take the time to build their businesses correctly.

Read the full article on FashionablyMarketing.Me.