How To Get Investors For Your Clothing Line

Starting a clothing line can be expensive. Even if you’re selling things out of your home rather than buying a brick-and-mortar boutique, you will probably need help getting money together. Materials and manufacturing cost money, not to mention marketing and other business expenses. If you need help, you’ll most likely an investor or two.

To get investors for a clothing line:

• Research Who You’re Pitching To
• Have a Business Plan Prepared
• Craft a Clear Pitch
• Be Thoroughly Versed in the Fashion Industry
• Show Where Your Investor’s Money Is Going

Research Who You’re Pitching To

All good interviews start with a healthy dose of preparation. If you’re looking for investment groups, go to their website and see what kinds of things they invest in. Talk to other fashion designers in your local community or online to learn where they got their investments. If someone invested in one fashion line, there’s a reasonable possibility to persuade them to invest in your clothing line. If possible, set up an appointment with investors, not to pitch to them but to learn what they want to invest in and what they expect to hear from potential partners. Meeting with investors does more to help you understand what investors want than reading articles on the Internet.

You should also meet with local business owners. You should focus on people who have started their clothing lines. Networking and getting involved with your local small business community isn’t easy and requires a lot of legwork. However, it’s necessary. Plus, it will show local investors that you’re serious about starting a clothing line and not just someone who simply came up with an idea and is blindly stumbling along.

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Have a Business Plan Prepared

A business plan is everything when you’re pitching your clothing line to investors and it is the most important thing when it comes to getting investors on board. The number one goal of an investor/investment group is to make money back on their investment. They may come to like you as a person, but they still want their money. To get them to believe in you, you need to show them that you have a solid plan. But why do you need a plan?

Investors don’t like to take too many big risks. Especially if they’re small investors. After all, they’re putting their money on the line and if things go wrong, they’ll lose a lot of it. So, they want reassurance that they will get their money back. Someone without a real plan, or the ability to explain their plan to make sure the investors see returns, is not attractive to investors.

What You Need in a Business Plan

Let’s go over what you should have in a business plan. First, you’ll need an executive summary. This will give your investors a general idea of how your clothing business will work and what factors will make your clothing line successful. They’ll want to see why they should invest in your clothing line rather than someone else’s business. They’ll want to know what your financial projections are. How much money will your clothing line bring in? When can your investors expect to see a return on their investment? Your executive summary will need a considerable amount of effort put into it. If a potential investor doesn’t like the executive summary, they won’t continue reading.

Your investors will want to know who is in charge of various aspects of your business. They’ll want to know who is the designer, the marketer, the person running the finances, etc. They’ll also want to know why those people are in charge of those aspects. They’ll ask why your head designer is your head designer or what experience your marketing director has. Ideally, your answer won’t be that the people in charge because they are your friends and family (unless they’re qualified). While everyone wants to help their families, investors want to make sure their money is going to a well-run operation.

Finances

One of the most important things investors want to know is the proposed financials of your business. They’ll ask how you’ll pay the various expenses required to start a clothing line. They’ll want to know how you’ll pay for manufacturing, marketing, materials, etc.A major thing investors want to see is that you’re as committed to the project as you want them to be. That means putting up some of your own capital to show that you have a financial stake in your clothing line. They’ll also want to know who will be in charge of your company’s finances.

Marketing

The next section of your business plan should include information about how you intend to market your product and who it’s for. A lot of people try to say their products are meant for everyone but they end up appealing to nobody. There are plenty of products that appeal to general audiences. Investors know that the general consumer market is highly competitive this is why, before you start designing your clothing line, you need to decide who you’re designing for and why you think that market will buy your clothing line.

Every type of business plan is different. In the case of a clothing line, you’ll need to have a physical representation of your clothing. As far as investors are concerned, seeing is believing. At the absolute least, you’ll need to have sketches drawn to show your investors what your clothing will look like. Ideally, you will have the clothing itself and pictures of models wearing the clothing. Investors in clothing lines want to see what the clothing line they will be investing in will look like when worn by an average customer. If they’re not sure that the clothing will sell, you’ll need to convince them why you think it will.

For that, you’ll need some customer research under your belt. For example, you need to explain why you think your clothing line will sell enough to make the investor’s money back. The investors will want to know what makes your clothes different and more appealing than similar clothing on the market. You’ll need to have competition research and show that your clothing line is viable in the market.

Next, you need to show your business’ projected profit margin, and why you think your profit margins will match up to your projections. Investors want to see facts and figures that back up what

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Craft a Clear Pitch

Next, you need a pitch. Business owners are pitching to investors all the time, often multiple pitches in a day. Your pitch will need to stand out compared to the others. It will also need to be clear. A lot of investors may not understand the ins and outs of the fashion industry. So, you need to be able to translate fashion industry jargon into plain English.

Part of crafting your pitch is to cut it down. There’s a chance to meet investors as you network. When you do, you may only have a minute or two to get them to invest in your business or at least want to meet with you in a more formal meeting where you can present your business plan in full.

This is called the elevator pitch (because you have to pitch it in the time that an elevator ride takes). You’ll have to practice this pitch a lot. Work with friends, business partners, and family to see what can be cut out to make your pitch short but informative.

Be Thoroughly Versed in the Fashion Industry

So far, I’ve covered general investors but if you want to get people who specialize in investing in clothing lines, you’ll need to be thoroughly versed in the fashion industry. You need to know more than the jargon that gets thrown around on shows like Project Runway. It’s easy to make a few articles of clothing but if you want to get into the industry and make money, you need to know how the fashion industry works. Investors want to know you know how fashion trends work and how your clothing line will keep up with those trends or better yet, set them.

Show Where Your Investor’s Money Is Going

When you’re trying to get people to invest in your business, you’re asking them to give you, their money. It’s not an easy thing to ask. If people are giving you their money, they want to see where it’s going. They’ll want to see what is being spent on materials, manufacturing, labor, etc. They’ll also want to be able to have input on these costs. More than a few investors have been defrauded so now more than ever, you have to keep your investors up to date and make sure your money is going to the things you say it’s going for.

You also have to be honest with your investors. Sometimes, things work out and you should celebrate with your investors and use this as an opportunity to get investors for the next project. However, sometimes things don’t work out. Maybe things don’t sell as well as you initially hoped or there’s a curveball in the market no one anticipated. Either way, you have to be honest. It may be humiliating to admit that your line didn’t turn a profit but it’s better than the consequences of lying, which can include lawsuits and jail.

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Related Questions

Where can I find investors?

You can look into local investors or investment groups. There are also angel investors that can be found. Some websites try to match businesses with the right investors.

When looking for investors, what should I expect?

You should expect to be told no. You will probably get a few rejections before you get the right investor. You should also expect some investors to run background checks on you to make sure their money is in good hands.

To learn more about how to start your own fashion clothing line check out my startup documents here

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.