Industry
Finance
Q: How much funding do I need to: (a) start my line and (b) produce a collection every season?
A: Designers have started their lines with everything from $10,000 to $50,000. How much money you have will determine how large your initial collection will be. To produce a 40 piece collection each season, the cost can vary from $50,000 to $100,000 depending on factors including but not limited to whether you are producing luxury goods and the size of your distribution.
Accion Chicago
Apparel Industry Board, Inc.
Chicago Artist Resource website
Chicagoland Entrepeneurial Center
Columbia College’s Ecenter
Prosper website
SCORE program through Small Business Administration
Small Business Administration
Stitches Fashion Program Chicago
Womens’ Business Development Center
The Fashion Designer Survival Guide by Mary Gelhar
Q: What type of funding do I need to finance my line?
Accion Chicago
Apparel Industry Board, Inc.
Chicago Artist Resource website
Chicagoland Entrepeneurial Center
Columbia College’s Ecenter
Prosper website
SCORE program through Small Business Administration
Small Business Administration
Stitches Fashion Program Chicago
Womens’ Business Development Center
The Fashion Designer Survival Guide by Mary Gelhar
Q:What is the difference between a factor and a purchase order loan?
A: This response is most basic, and you will want to consult additional sources before deciding to use one finance vehicle over another.
Factors: Provide a cash advance once goods are shipped and invoiced. Helps a designer with money for the first shipment, but does not help when other deliveries become due before payment for original shipment has been received.
Purchase Order Loan: Provides a loan based on confirmed orders from a retailer though it doesn’t guarantee that a retailer will accept your shipment. You will still be required to pay your loan regardless of the outcome with the retailer. By lending the money up front a borrower has the finances to pay for the pattern making, grading, reserve and purchase fabric and trims and pay contractors which therefore, allows early and competitive shipment of orders.
Accion Chicago
Apparel Industry Board, Inc.
Chicago Artist Resource website
Chicagoland Entrepeneurial Center
Columbia College’s Ecenter
Prosper website
SCORE program through Small Business Administration
Small Business Administration
Stitches Fashion Program Chicago
Womens’ Business Development Center
The Fashion Designer Survival Guide by Mary Gelhar
Q:Should I have a business partner?
A:There is no right or wrong answer. It’s up to the individual. It is a good idea to look at some of the most successful designers in the business today to learn more about their business support. For example, Donna Karan, Nicole Miller, Giorgio Armani, Valentino and many more. There are frequently business organizations or partners behind a designer’s brand to allow the designer to focus on the development of the line.
** Consider: Three schools in Chicago provide degrees in Fashion Marketing and Management, maybe you could find your partner there? Check out The Illinois Institute of Art – Chicago, International Academy of Design & Technology and Columbia College. Just remember that you will learn and grow together.
Accion Chicago
Apparel Industry Board, Inc.
Chicago Artist Resource website
Chicagoland Entrepeneurial Center
Columbia College’s Ecenter
Prosper website
SCORE program through Small Business Administration
Small Business Administration
Stitches Fashion Program Chicago
Womens’ Business Development Center
The Fashion Designer Survival Guide by Mary Gelhar
Q: Should I hire an accountant?
A:There is computer software on the market, such as Quickbooks, that provide an inexpensive way for you to maintain your own financial records. Just be prepared to take some classes to learn how to use the software effectively. Don’t underestimate the importance of keeping current and complete financial records, including proper billing and collection systems. It can make or break a business. If you do not have time to properly maintain your own records, then consider hiring an accountant it will be wealth worth the money!
Sources to Learn More:
Many organizations provide free classes on Quickbooks, simply google “Quickbooks classes in Chicago”
Chicago Department of Business Affairs and Licensing occasionally holds accounting seminars as part of their free monthly series.