Today will mark the final day of trade show Fashion Exposed autumn/winter 2015.
We look back on top tips we learned from last year's business series.
A+TA : Melissa Brown, owner.
1. Explain the concept of 'financial health' for a fashion retail/design business.
Financial health for a fashion retail/design business is similar to any other type of business. It’s making sure your business is in good shape. This means having good cash flow, monitoring your critical numbers and making sure you are lean enough to change direction if necessary.
2. Why do so many retailers fail at keeping their business in the black?
Retailers, like so many business owners, are great at what they do but aren’t necessarily great at the numbers side of the business. So they hope that having a great product will be enough to see them through. Sadly I think the collapse in the last 12 months of some amazing retailers and designers is proof that great design and a great product is simply not enough. You also have to become great at business which means staying financially healthy.
3. What are the key things to keep in mind to stay on top of business finances?
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You need to understand your numbers
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You need to know the 3-5 numbers that are critical to your success and should be able to say what those numbers currently are at any given day
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You need to understand what is happening in your market and also in your industry
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You need to understand when and how you get paid
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You need to take control of your cash cycle
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You need to keep an eye on your stock levels and under-performing items
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You need to be forecasting and predicting what your client will want next to stay ahead
4. What questions should retailers ask themselves before they take on a new project or expansion to make sure they are not 'overextending' their finances?
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How am I going to afford to pay for this? Can I afford to pay for this?
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Is there another, cheaper, better option?
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Do I need to do this myself or can I collaborate with someone else to create an even better result with less risk?
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How much extra stock do I need to sell in order to fund this new project or expansion? Is this achievable?
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What is my Plan B if the project or expansion doesn’t work?
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What is the potential risk if this doesn’t work? Can I manage/live with that?
5. A traditional business motto once was: 'Without risk, there is no reward'. Is there a more fitting motto for retailers operating in this day and age?
“If you don’t like where you are then change it. You are not a tree.” Jim Rohn
6. Three secret tax tips for fashion retailers?
Perhaps these are not lesser known but rather lesser utilised. They include:
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Being aware of the grants, concessions and other monies available for both the fashion industry and exporting.
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When you are travelling - whether it’s for inspiration, to purchase stock, to meet with suppliers or to collaborate - to be aware that you may be able to claim fares, accommodation and food during those nights you are away
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Making sure you are valuing your closing stock properly