Fashion investors funding for your brand is not easy especially for startups. You need to have a structured and strategic approach to give a shape to your business. Based on your potential growth, fashion investor would show interest in your business. Most fashion startups are self-funded. Fashion startups usually run on self-funding or take a business loan. In either case they are always on their own initially. It is a pity to know that 32% of world’s economy is the contribution of fashion products. May it be apparel or accessories or fragrance products, the contribution is much more. But finding a fashion investor is much more difficult as compared to IT or ITES business. In this article we will discuss some steps involved to attract investors for your brand. Here are some steps to help you attract investors for your clothing brand.
Create a Solid Business Plan for your Fashion Investors
It is important to convince yourself before you start convincing others. If the business plan for your fashion business is vague you cannot make a solid pitch or make others believe. So, it is important to prepare a strong business plan and address all the adversaries and loop holes. To so, you must know what you want to achieve in the short run and in the long run and at what cost. This takes me right to the business basics of What, How, When and Where. Also you need to make a SWOT analysis of your fashion brand. It is important to understand where the gap in the market to that you can fill in is. Your brand’s vision, mission, and values statements are also important. Create a business plan for yourself and also potential fashion investors. Consider the following points as below.
- Outline your brand’s vision, mission, and values.
- Provide a detailed analysis of the market, target audience, and competition.
- Include financial projections, budgeting, and a clear plan for scaling your business.
Build a Strong Brand Identity
People follow, identity and recognize those who has something to show. And for a brand to be recognized in mass consumer market, you need a strong brand identity. A brand identity that is easy to identify, and should give a trust instinct to the mass. It may be a logo, a slogan or your brand name for that matter. People instantly recognize you along with all your quality just with that. This is called real brand identity. Building a brand and its brand identity is a long term and a continuous process. And every time you have a drop, it reflects the points going up or down of your brand identity. Some of the way you can build your brand identity and unique selling points are outlined as below.
- Develop a unique and compelling brand story.
- Design a strong and memorable brand logo and visual identity.
- Showcase the uniqueness and marketability of your clothing line.
Establish an Online Presence
Whether you are starting an apparel line or a local clothing store or any other form of business for that matter, your online presence is non-negotiable. Brands with online presence grow 400% faster than those who do not have an online presence. And unless you are selling your products to your cousins, get global and present yourself to the world. To submit a great online presence in the market below are some of the quick tips. This can help your business grow.
- Create a professional and user-friendly website.
- Leverage social media platforms to showcase your brand and build a following.
- Use e-commerce channels to sell your products online.
It’s easier for customers to believe your brand and products with some authentication. In the current market people do check if people you have worked with or used your products are satisfied. You got to have a pool of customers recommending your product or service. Apart from that you must have a market buzz that bias the customers towards your products. Social media Influence plays a vital role in creating that buzz. In very raw language if we say, it is all about attraction, retention and motivation. By social media you attract, with your product quality and with customer recommendation you motivate others to come. Below are some of the pointers you should be considering to demonstrate traction.
- Provide evidence of market interest, such as pre-orders, social media followers, or positive customer feedback.
- Share any notable collaborations, partnerships, or press coverage.
- Create a Prototype or Sample Collection
- Develop a small collection or prototype to showcase the quality and design of your clothing.
- Use this as a tangible representation of your brand when approaching investors.
Business in general is all about people and network. The bigger your network the faster your business grows over time. If your business has a solid network of customers, vendors, and other supporting factors, investors come without invite. On a contrary, if you have little or less network, you have to put some effort to convince investors to back you up. Here are some of the tips you can grow your network for your business.
- Attend industry events, trade shows, and networking functions to connect with potential investors.
- Join entrepreneurial and fashion-related groups to expand your network.
Every deal end up with some financial transaction and to get anything done you need money. So, finance is the bottom line of any business. So, to get an optimum growth and development, financial planning needs to take the driver seat. You must know how much money you need to build your business and how you allocate your resources. This also includes your contingency plans if something fall out. Also, it is important to access what you are going to get in return on each and every transaction that you make. Analysing, accessing on your financial returns in a transparent way always helps. This helps understand the return on your investment for yourself and fashion investors. Here are the key pointers that can be helpful plan your finance.
- Be transparent about your financials and explain how the investment will be utilized.
- Clearly articulate the return on investment (ROI) potential for investors.
Target Fashion Investors
To grow your fashion business, you need helping hand and for a business you need investors. Not all investors are same. So, you should pick and choose your investors who understand your business and its flow and the rate of ROI. This is very important as if may avoid a lot of misunderstanding and communication. Fashion business is little volatile and little hard to grow till you build a firm brand identity. It may so happen that you may take 2-3 years to achieve breakeven. So, your fashion investors should be patient enough and also understand the flow. Choose and target fashion investors in particular instead of going with generic ones. Here are some of the pointers that may help you understand your source of funding.
- Research and identify investors with a focus on the fashion industry.
- Look for investors who have a track record of supporting similar brands or have an interest in the fashion sector.
Legal and Regulatory Compliance
Keep your papers clean if you are looking for an investor to fund your business. This is a non-negotiable requirement. When your investor keen to invest, the first thing they want to see is your legitimacy. Whether you are a registered company, what is the shape of your balance sheet. Whether you are keeping your lager clean and how accountable you are for conflicts and issues. These details are definite deal breakers and having those in place enhances your chance to get a legitimate investor.
- Ensure that your business is legally compliant and adheres to industry regulations.
- Having proper documentation and compliance can instil confidence in potential investors.
Engage in Crowd Funding
For startups especially fashion startups the best way to raise funding is crowed funding. Crowed funding is the process of raising money from many individuals to support your project. There are several types of crowd funding. Those are reward based, equity based, donation based and debt based crowd funding. There are many platforms where you can pitch your idea and raise funding for your fashion startup. Consider some of the platforms as noted below.
- Platforms like Kickstarter or Indiegogo can help you raise capital and validate your product before approaching larger investors.
Pitch Your Brand to Fashion investors
Finally, you must prepare a compelling pitch for your investor both on papers and verbal. On paper you must give the exact investment required, ROI and future projections etc. The investor is interested in what’s in it for him. So make sure you clearly outline what it needs and what it is going to gain in a normal situations. Also, consider the plan B in case your main plan and projections fail. Those pointers are important. Also consider checking the below pointers that may help you address the queries.
- Prepare a compelling pitch that highlights the unique selling points of your clothing brand.
- Clearly communicate the market opportunity and how your brand addresses it.
- Emphasize the scalability and growth potential of your business.
Attracting investor for your fashion business needs more than just a business plan. Remember, building relationships and trust is key in attracting investors. Always be prepare to answer queries that may come from your investor. And sometimes it could be quite difficult ones. It takes much patience to gain support of your investor and a small hiccup can be a deal breaker. Be prepared to answer question, adapt your pitch based on their feedback. And the most importantly, demonstrate your commitment to making your clothing brand a success. We are a group of fashion tech pack designers helping our clients build their brand. And we also help scale their business form scratch. If you are keen to start your brand and take it to the next level connect with us.