Comments on the Article blog are now OFF! If you wish to leave feedback or your opinion of an article individual threads will be created in the Dobizo Community for further discussion. Go to discussion by Clicking Here Now

If your clothing label is not an already recognizable brand name the chances of attracting an investor are slim to none…more like none.

Most investors want to find a clothing business with an already established brand name or the people behind the company have industry experience or well connected. Take for example Tony Shellman one of the founders of Enyce Clothing Company just launched his new clothing line Parish Nation. He was an already established entrepreneur and designer, so attracting an investor wasn’t a problem.

I don’t want to say it’s impossible to receive an investment at an early stage of development, but it will most likely be worth your time to look elsewhere. Some of the places you could look for a money are:

• Immediate family members…make sure your investing in the clothing label also, no one is going to invest if you haven’t showed any effort or belief
• Relatives ask some of your rich relatives for some money, but be prepared to treat them just like any other investor. Present a business plan with a detailed exit plan for the investor.
• Friends can also be potential investors. I wouldn’t advise it because business can definitely ruin a good friendship if things don’t go as expected so use this with caution.
• If bad credit isn’t a factor you can try a traditional bank loan. (Credit was a factor for me)
• Sba Loans they offer banks a guarantee of up to a certain % of the total loan if you are approved in the event your not able to pay it back the government will reimburse the lender. (You still owe them their money!)
• Micro Loans for more take a look at the article.
• If you want to you can check out other alternatives if your having cash flow problems. For example you can use a Factor or purchase-order financing. I gave an example of how I put them both to use in this article. Purchase order finance your or clothing line orders using no-money upfront! or how I made an ass out of myself while processing my clothing line order.

Let’s say you did find an investor and he/she was interested in financing your clothing label…first of all congratulations. Now that you have the money what’s going to happen here are some of the pros and cons of having an investor. Now keep in mind this is not all situations, but what happens when you jump in head first as far as the cons are concerned:

Cons:

If you do manage to attract some investors at such an early stage in the development of your clothing label. The investors will most likely want to bring some more experienced executives on board and have a majority ownership over your clothing business. In the process you will lose the integrity and what you started a clothing line for in the first place…because you wanted to start YOUR own clothing line. Just ask the former owners of Miskeen who now run Meezan Artcouture (Fashion Fact), because of that exact reason they loss their clothing line ownership and rights to use the logo. Karl kani had to buy back the right to use his clothing brand name from his financiers the owners of the now defunct Cross Colours clothing line.

Pros:

• Increase your brands productivity
• Increase the cash flow of your clothing company
• Experienced executive on board (Could be good or bad depends on if you remain the majority owner of your clothing brand)
• Finance better promotional efforts. (Magazine ads, hire PR, Large scale events)
• Increase your booth presence at trade shows. (Five Four clothing can definitely give you an example of the their before and after taking own investors booth presence.)
• Work relief with the now financed company your are able to hire workers to take some of the load off your back.

This is an overlook of why or why not you may want to look for investors for your clothing label. Of course the final choice is up to you.

Any other pros or cons you guys can thank of are definitely welcome! Leave them in the comment area and I will update the post accordingly.

Serious about starting a clothing line? If so subscribe to our free newsletter for exclusive articles/updates that you don't want to miss! or Our RSS Feed

Continue This Discussion In Dobizo Forum

Fred

Popularity: 2% [?]

Want To Learn How To Start A Clothing Line From a proven fashion industry professional? If so Click Here to take a listen 100% Free to how you can succeed in the fashion industry from Ceo's of million dollar apparel industry businesses.