How to Ensure Your Design Business Is Profitable
Most people start new businesses because they love what they do. This is especially true for fashion and interior designers—many of whom have a real and undeniable passion. Though design is fun and creative, it can also be a tough industry in which to succeed financially. Personal fulfilment is important, but it's also essential to build a profitable business that allows you to survive. Whether you're just starting out or already have your own design business, these tips will help you shape a more stable and profitable business model
Establish A Clear Vision
If you want to be a successful business person, you will need to start with a clear vision of your goals. The British Fashion Council identified this as one of the most crucial steps in establishing a successful design business. Read more in this article from Fashionistas on starting your own fashion business. You should literally sit down and pen a mission statement that describes your business’ purpose. Then, establish a few mini-goals to help you stay on track. Where do you see yourself in one, five, and even ten years? What will define your brand’s image?
Develop Loyal Customers
I’m putting this tip near the top of the list because it's so important. The most streamlined and efficient business won’t succeed or turn over profits if you don’t have customers to purchase your designs. Geoff Woods of Entrepreneur recommends identifying your target audience early on. Use social media to market your brand and build a community of loyal consumers. When you make a sale, make sure every single client walks away with a positive experience—that’s what keeps them coming back.
Start Small & Leave Room To Grow
Forbes contributor Kim Winser notes that too many designers get carried away at the outset and set themselves up to fail. Rather than create a complex and overwhelming line, start small. This will allow you to pay attention to the feedback provided by clients. It also leaves room for you to evolve towards the products that will sell more successfully. In the meantime, starting with a product line will keep initial costs low and allay against the pitfalls of premature scaling. Find out more in this handy article from Linked in on Why So Many Fashion Start Ups Fail.
Know Your Costs
Speaking of costs, bookkeeping and time tracking can be boring, but it is essential to know exactly how much time, energy, and money goes into each piece you create. It is impossible to set a profitable price point if you don’t take the time to analyse how much is spent on raw materials.
Don’t be afraid to haggle a bit either. Go to your biggest suppliers and ask for a better price. Robert Craven from UK Business for sale insists you never stop asking: “Is that the best you can do?” It may seem trivial, but each pound you save on supplies is another pound in profit. Eventually, all those pounds start to add up. If your budget allows, you might even hire a buyer who is an expert at negotiating with manufacturers and finding the best deals.
Charge What You’re Worth
Even simple designs can take a lot of time and thought to develop. Don’t sell yourself short. Though many designers start out small, you should at least have a plan in mind to increase your price points to ensure your designs are profitable.
Many successful businesses do this by offering products at three different price points. Research confirms that when presented with low, medium, and high-priced options, most consumers choose the mid-range. If you need to raise the price of your mid-range product to boost profits, consider raising the high-end one as well.
Don’t leave this part of your business plan to chance. At the end of the day, everything really boils down to price, a sentiment echoed by Matt Welty of Complex Sneakers.
Protect Your Designs
In today’s viral society, it is becoming too easy for others to steal your designs. If you wish to make a profit, you can’t have others thieving your inspiration and marketing it at bargain basement prices. Familiarize yourself with the rules of trademarks and live by them to protect your intellectual property as well as your livelihood. I've written a few articles on ways that you can protect yourself with IP law.
Stick With It
Every business requires a great deal of thought and organisation. This isn’t something you should take lightly. Though the process may seem tedious, it will prove very profitable in the end. As your profits steadily rise, you’ll stress less over the little things and have more energy left over to pursue your first priority—creating fabulous designs.
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