Smart Financial Steps to Take Your Fashion Business to the Next Level
Maybe you’ve always wanted to live the glamorous life, to travel to Milan whenever your heart desires and carouse with the fashion moguls of the world. Well, if you’re building your own fashion design business, this is definitely a possibility. But you’ll have to make smart financial moves in order to achieve this goal.
The fashion world is home to a multi-billion dollar business. And while those household names such as Ralph Lauren, Versace, Tom Ford, Gucci, and Michael Kors all have great talent and vision for making trendy handbags, they also have to have sound financial planning.
Like the fashion world, the modern business world also has a few standards that must be followed. And if you’re going to make it in any type of business today, you have to have your finances in check.
If you’re looking to take your fashion business to the next level, the following will offer a few smart tips for managing your business and perfecting your finances.
No matter how good you were as a kid when you began saving your hard-earned allowance money in your piggy bank, chances are you’re not a certified CPA. And even if you consider yourself to have a good financial sense, getting professional assistance is always recommended.
As a business owner in the fashion world, you likely need to purchase materials often and perhaps even travel to conventions or trade shows and the like. And this all costs money which will come out of your budget.
Talking to a financial planner can help you to see where you’re spending and how you can adjust your spending so that you can meet future financial goals in the future such as debt repayments and retirement savings.
For example, if you operate a fashion business in the Memphis area, talking to Memphis financial planners is a wise decision. And this is because they’ll have locally based knowledge that can better help you plan for the future.
Just like how meteorologists attempt to predict the weather, you also need to “forecast” your cash flow outlook just to get a better picture of where you stand and where you want to be in the future.
Essentially, by estimating your annual cash flow, you’ll be able to build a better picture for budgeting and planning for foreseen cash shortages if they should arise.
A few steps for crafting a cash flow outlook are as follows:
- Isolate your forecast period (monthly, quarterly, or yearly)
- Gather and analyze financial data from the previous year
- Calculate cash flow based on previous data
- Estimate upcoming expenses for the selected forecast period
- Calculate your closing balance
Once you have a better picture of what funds you have to work with for a specified period of time, this will make it easier for you to adjust spending (and savings) throughout a given timeline.
Like all business owners, chances are there are many areas where you can cut spending in order to reduce costs and help pocket more revenue. And doing this can free up funds for improving your business and for emergencies that may occur down the road.
For example, you may be spending more than you need to on materials or labor. And this is common for business owners in just about every industry.
Simply by looking for a new distributor or wholesale provider can allow you to cut spending by hundreds of dollars in some cases. And this is money that you can use for many other business purposes such as marketing or travel expenses.
It’s often said that two heads are better than one. Well, so are two wallets. And by bringing in a partner, you’ll not only have more spending and marketing power, you’ll also be able to generate new ideas and collaborate on new designs.
For example, if you want to diversify your line of products, bringing in a partner with an established customer base can help you achieve this goal.
Perhaps you prefer to design handbags but you also want to design scarfs or clutch purses. Partnering with someone who’s already inside this industry can make your brand much larger in scope and in customer reach.
At the end of the day, all business owners need to become financially aware. And by taking the steps now to secure your financial future, your business is much more likely to flourish and allow you the type of lifestyle you’ve been working to achieve.