How Much Does it Cost to Start a Fashion Brand?

Isn't that the million dollar question?

Unfortunately there isn’t one answer to this question. The answer depends on many aspects such as the product type, target market, price point, business concept, strategy etc.

In order to build a strong fashion business with real chance in being successful you must spend money to make money! Just like with any other business.

More so, with the complexity of creating a product from scratch you can’t cut corners and you’ll need to plan ahead.

By planning ahead I don’t mean creating a wish list with what you’ll hope would happen re: I would like to sell in 50 stores in the first season, be profitable after the first year, have a markup of 80% etc. I mean a detailed, well thought of, step by step plan with a strategy, milestones and cost for executing the plan -  in other words, a business plan.


The biggest financial challenge that start-up fashion brands face (which unfortunately most of them are either not aware of  or simply ignore) is cash flow. As a fashion brand you are creating a product from scratch and are responsible to pay upfront for everything involved in making the product, you will than wait anywhere from 3-6 months before your customers pay you for the product and In the meantime you will also need to pay for the development of your next season. This can adds up to a big investment,

For example, although you might only need 10k to start the business and develop your first season you will still need maybe 100k as an investment to get you through the first 2 years considering the circle of cash flow described above.

Than how can you figure out what it will cost you to start your fashion brand? Here are the steps to help with that:

  • Market Research - You should start with that, take the time to do your homework. Do the research and define your business vision (at least for the first year).
  • Vision - Once you gather the above info, decide on what products you will offer, your price point and market positioning and how you’ll market and sell your fashion product.
  • Calendar – Now that you decided on your business concept and strategy create a calendar for executing it.
  • Start-up investment - Use these budget sheets and start plugging in the numbers to get a better understanding of your start-up investment.
  • Project your cash flow – Using the cash flow section on these sheets, look at the first year in business and project your income and expenses for the year, than based on that decide how much money you’ll need to get you through the first year. If the amount is too high, go back and see what can be adjusted to make it work better for you. Also keep in mind that you don’t need to have all your investment ready on day one, you can spread it over few months ( and who knows, maybe you wouldn’t even need it all after all).
Budget Sheets
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TIP – Since your first year projection will be based mostly on assumptions, make sure to pad costs and time lines on your plan so you will have a cushion in case things don’t go as planned (trust me not everything will work as planned, some will work out better and some will not work as well). When we work on a business plan I like to plan for the worst, this way we are prepared, if the plan seems to work even under the worst scenario than chances are that in reality the business will be successful.

  • A business plan – The above steps will essentially result in a business plan. This will also help you see a full picture of the business in the first year. Additionally, if you are looking for investors/loans your business plan will help you figure out how much do you need and when, it will also make your potential investors feel more comfortable seeing that you have a plan and you know what you’re doing which will increase the chances of them wanting to invest in your business.   

TIP -  business plan is a living plan, it’s not set in stone. In fact it will most likely change along the way, therefore I would recommend to start with planning the first year, create some mile stones for yourself along the way, make sure to revisit them and don’t be afraid to adjust them as you go.

Good luck with your business.

Creating A Business Plan for Your Fashion Business

Creating a business plan is key for the success of your fashion business! Because without one you will find yourself throwing mud on the wall with the hope that some will stick... 


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