How to Start Your

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How to Start Your Own

FASHION LINE
la mode college of creative industries
Copyright ©2010 La Mode Group All rights reserved

How to Start Your Own Fashion Line
This e-course covers the important factors in the business of Fashion. Students will gain an overview of how to set up their own fashion business and a stepby-step guide to starting their own fashion label. Topics include the advantages and disadvantages of being your own boss, different business structures, how to register a business name, legal requirements, insurance and government grants available.

Disclaimer
Although every effort has been made to ensure that the content of this ecourse is free from errors, this publication is sold with the understanding that the authors, editors and publishers are not responsible for the results of any action taken on the basis of information in this work, nor for any errors or omissions. The publishers and the authors and editors expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication. If expert advice is required, services of a competent professional person should be sought. Website Referrals: In this e-course there are several references to Websites that have additional information in relation to the topic. We are not responsible for the content of any websites. Due to the constant development of the Internet, links and content can change on these websites. We carry no responsibility for the information that may be changed or omitted on these websites.

Copyright Notice
This publication of ‘How to Become a Fashion Designer and Start your Own Fashion Label’ is copyright ©2010 by La Mode Group, trading as La Mode College of Creative Industries. La Mode Group has the exclusive propriety rights under the Copyright Act to make and distribute copies of this course. No Part of this course may be reproduced, revised, or distributed in any form or by any means (including photocopying, emailing, recording, and uploading in the net) without prior written permission. Unauthorized copying of all or part of this course will infringe on copyright and may result in legal remedies and damages.

How to start your own Fashion Label
Do you have an idea for a new business or fantastic new clothing label? Or do you want to open your very own boutique? Forward planning and market research is the key to turning your dreams into reality. First you need to consider why you want to go into business, an access the advantages and disadvantages of running your very own business. Why go into business? There are many reasons for wanting to go into business. You may have a good business idea related to your current line of work or hobbies, or have a great idea for a new product or service that isn’t currently available in the market. Alternatively, you may have come into money through an inheritance or retrenchment or have experienced a change in personal circumstances. Many people decide to go into business for themselves to enhance their lifestyle or as an outlet to express and show-off their design talents to the public. You may set up a small business that you operate only part-time while you are still studying or working full time, or maybe you will use your business as your primary income source. Advantages of starting a business Running your own business requires a broad range of skills and can provide many benefits. Some reasons for wanting to own and operate a business are: • • • • • • To earn a better living To create your own job when a job market is down To have flexible working hours To have greater control of your working environment The ability to work from home and in your own time To be able to express your creativity and do what you love!

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To build a business asset that you can sell or leave to your children You dislike working for other people/ or your current boss You enjoy leading a group of people You have identified a need in the market for your product or service To have personal pride of ownership

Disadvantages of business ownership To help provide a realistic picture of business ownership, it is important to understand some of the potential disadvantages of going into business: • • • Long working hours can cause physical and mental stress and strain, especially in the early stages of the business High levels of responsibility Varied income: you may need to have another income source for the first few months of operating your business; until you start earning a profit. (From family, partner or 2nd job) You may lose some employee benefits, such as holiday pay and sick leave There may be a large set-up cost involved with starting your business.

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Being Prepared for Business Are you ready to venture into business? Operating a small business is not just about working for yourself, it's also about having the necessary management skills, industry expertise, technical skills, finance and of course a long-term vision to grow and succeed. In any circumstance, the most important thing when starting a business is to make sure you are well prepared. A lack of adequate preparation is the main cause of small business failure. Before making any concrete decisions, start by asking yourself the following: • • • • • • What type of business do I want to be involved in? What do I know about the industry and the current market? Am I prepared to do a business plan and deal with issues of employment, marketing, sales and financial management? What training do I need to help me gain skills and knowledge in areas I’m not familiar with? Do I have sufficient funds for my personal needs until the business starts generating an income/ profit? How much money do I have to invest into the business?



What resources and support do I have to help me set-up my business? (Government support, resources such as equipment, finance and training, support of friends and family.)

8 Steps to Starting a Business
Follow the below 8 Steps below to start your very own business in Fashion!

Step 1: Analyze your Business Goals and Objectives
If you want to start a business, the first step is to analyze your objectives honestly. • • • • What skills do you have and what skills can you acquire? Will you find it interesting? (You will be spending a lot of time with the business, so it's important you enjoy it!) What do you hope to get out of it? What do you wish your business to achieve?

Experience shows that your business is more likely to be successful if there is a matching of your skills, experience, knowledge and interests with the business. Your business should build on your talents and be one in which you will remain enthusiastic and aware of your customers' needs. Firstly you need to establish a business goal, mission statement and objective. The mission statement should be a paragraph, or even a bold sentence summarizing the main ‘mission’ for your business. Your Business objectives and goals can be set-out in bullet-point format.

Step 2: Conduct Market Research
Before you get started and decide to go into business, firstly you need to find out if people are interested in buying your products or services. You need to find out who your competitors are and whether the market can sustain your business.

Market research is a most valuable tool for all businesses. It’s the process of gathering information to help you make informed decisions about the marketing of your business. Statistics and other market research data help you understand your potential customers and their needs, as well as what your competitors are doing. Getting a good understanding of market trends is essential for you to make the most of your business opportunities. Look for information in market reports, government statistics, trade publications and industry association publications. There are two types of market research: • • Primary research - Information collected for you through surveys, interviews, talking to customers and businesses. Secondary research - Information gathered for other purposes, such as government statistics, trade publications.

Conduct some research to see whether your idea is really feasible. This will involve gathering, analyzing and evaluating information to help you formulate your business goals, and what you want to achieve from starting your business. You should include research and information on your Target Market.

Some questions to consider in your research: • What product/service will you provide? • Is your idea feasible? • Who is your Target Market? • How will you protect your idea? • Is there a market for your product/service? • What skills do you need? • Who are your competitors? • What difference will you bring to the market? • Do you have the financial capacity?

You can use The Australian Bureau of Statistics to help you with your market research. The Australian Bureau of Statistics is Australia’s official statistical agency. It provides statistics on a wide range of economic and social matters.. (www.abs.gov.au)

Step 3: Evaluate Potential/Feasibility

The third factor in starting up a business is to assess the value and viability of the business. To start and operate a successful business, you must first gain a thorough knowledge of the business and potential customers and competitors. You will also need: • • • • • Technical know-how to produce a product or service Sales and marketing skills General management skills Financial ability to plan and control the money matters Start-up Capital

If you lack any of these skills, you may need to bring in partners, employees or consultants who have them, or acquire the skills yourself. From the Market Research that you conducted in Step 2, you will need to assess whether your business idea will be viable or not. You will also need to consider: • Licensing Requirements: For small businesses, your local council can inform you of any licenses and regulations that may affect your operation. Intellectual Property (IP): Will your business infringe on IP and how will you protect your Intellectual Property?



You can also contact your nearest ‘Business Enterprise Centre’ for free advice and support. (www.beca.org.au) Visit IP Australia's Smart Start website for more information protecting your intellectual property. (www.ipaustralia.gov.au) on

Step 4: Assess Profitability of your Business
Let's face it. You go into business to make a profit and it’s essential if you are going to stay in business. But how can you tell whether or not you will make a profit?

There are many things that have to be taken into account in order to arrive at a fairly accurate estimate of the annual costs of running a business. When starting a new business, you will need to spend some time researching the likely costs, so that you can estimate your weekly or monthly "break-even" point. You can use the following list of costs to help prepare your estimate. Not all costs will be applicable to every business, and depending on your particular business, there may be additional items that need to be considered.

Expenditure /Set-up and Operational Costs Checklist:
1. Starting a Label: ✓ COST/ EXPENSE
Administration Costs: Business Cards Stationary Printing Costs Computer Costs: (Internet, new computer programs, computer, printer, ink cartridges) Telephone Costs: Fax line, home line, Mobile phone costs Equipment costs: Sewing machines Scissors Sewing Equipment Fabric costs Trim costs Labelling costs (interior labels as well as swing tags) Outsourcing costs: Employment/ contracting of: Seamstress Patternmaker Sample maker

✓ COST/ EXPENSE
Marketing Costs: Photo-shoot costs (model, photographer, hair and make-up) Brochure /Catalogue production costs Advertising costs Website costs (set-up costs as well as ongoing costs) Trade Fair Costs Travel Costs: If you need to travel interstate for appointments with Buyers (flights, accommodation) Business Costs: Accounting costs Business Registration Costs Public Liability/ Insurance Costs Bank Fees/ Merchant Facility Fees Tax: GST and Personal Tax Training costs/ courses Rent Costs Wages: Cost of hiring help where required Owner Drawings (your wage)

2. Starting a Boutique ✓ COST/ EXPENSE
Administration Costs: Business Cards Stationary Printing Costs Computer Costs: (Internet, new computer programs, computer, printer, ink cartridges) Telephone Costs: Fax line, land line, mobile costs Equipment costs: Eftpos Machines Point of Sale Register/ Computer? Labelling costs (swing tags, shop bags) Shop Fit-out costs: Fittings and Fixtures Sign Writing Contractors Fees (i.e. Electrician, labour) Display and decoration of your store Power, water and gas connection Security Bond for lease Stock Costs: Merchandise cost of goods for sale in your store

✓ COST/ EXPENSE
Marketing Costs: Brochure /Catalogue production costs Advertising costs Website costs (set-up costs as well as ongoing costs) Travel Costs: If you need to travel interstate for appointments with Buyers to buy stock (flights, accommodation) Business Costs: Accounting costs Business Registration Costs Public Liability/ Insurance Costs Bank Fees/ Merchant Facility Fees Tax: GST and Personal Tax Training costs/ courses Rent Costs Wages: Cost of hiring help where required Owner Drawings (your wage)

After you have realized all your business Expenses, Conduct a breakeven analysis. Your ‘Break-even Point’ is determined by your sales, cost of sales, the time required to achieve those sales, and your overheads or start-up costs/capital. Here is an example: Your total costs and expenses for setting up your business in the first 6 months is $15,000. Your business Primarily sells designer dresses, of an average sale price of $200 per dress. The cost of producing each dress is $100. The Net profit per sale is $100. (100% mark-up.) To ‘Break-even’ you will need to sell enough dresses to earn a net profit of $15,000 to cover your set-up costs. ($15,000 divided by average profit of $100 is 150 dresses.) So to ‘break-even’ you will need to sell 150 dresses. Your Break-even point would be how long it will take for you to sell 150 dresses. If on average you were selling 5 dresses per week, it would take you 10 weeks before you would sell 150 dresses. So, your breakeven point is 10 weeks. After this point, your business will have paid off its debt of start-up costs, and be running at a profit!

Step 5: Determine Your Business Structure
The three main types of business structure* used by small businesses are: • • • Sole trader / sole proprietor; Partnership; or Company

Some (but not all) of the advantages and disadvantages of the three types of business structure are set out below. It is important to choose the business structure that best suits your needs. Your accountant or solicitor can help you determine which structure will be best for your needs.

Advantages
Sole Trader / Proprietor • easy to establish with little cost or formality • all profits to owner • owner has full control • losses can be offset against other income Partnership • tax liability can be split • greater access to capital and skills • share responsibility for running the business Proprietary Limited (Pty Ltd) Company • separate legal entity • shareholders liability is limited • can be formed by one or more persons • not terminated by death or bankruptcy of a shareholder • shareholders can include minors

Disadvantages
Sole Trader / Proprietor • limited to the funds and capital available to the owner • owner is personally liable and responsible for all debts of the business

Partnership • unlimited liability of each partner • decision making can become deadlocked • personality problems may arise Proprietary Limited (Pty Ltd) Company • higher establishment costs and ongoing costs • company structure is more complicated • liable for company tax • dissolution can be complex/costly • Directors have substantial obligations

Step 6: Write a Business Plan
Writing a business plan is an essential step in the process of building a successful business. The task is all the more important if you are going into business for the first time or entering an industry you are not familiar with. Drafting a business plan will familiarize you with the finer points of your business, industry and the market, and will draw attention to areas requiring further attention. A business plan is also required when applying for a bank loan or taking out a retail lease. Use the template in Appendix 1 to help you write your business plan.

A Business plan will include:

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Executive Summary Business Goals Description of the Business Management Plan Market Research and Analysis Marketing Plan Operational Plan Financial Plan Action Plan

Step 7: Register a Business Name
A business name is a trading name under which a business can operate. Registration of your business name effectively gives you the right to trade under that name in a given state. Registration of a business name is compulsory when you trade under a name other than your own, however, it does not give you any proprietary rights to the name unless it is registered as a trademark. Firstly you will have to search to see if your business name is available, or if someone else already has a business name similar to what you would like to register. Use the Australian Securities & Investments Commission National Names Index website to conduct a search on your desired business name. (http://www.search.asics.gov.au) After conducting a name search, you will have to register your business name in your given state or territory. For information on where to register your business in your state, log onto: www.business.gov.au and look up: register your business. If you decide that a company structure best suits your business, then you need to register as a company. By registering a company name you have the advantage of having exclusive rights to that name in Australia, without having to register in each state. You can only choose a company name not already registered to a company or business. Special approval is also required to use certain words. To register your company name complete and lodge Form 201 application for registration as a company, together with the prescribed fee. You can find this form on www.asics.gov.au You can lodge it in person at any ASIC Service Centre or by mail to:

ASIC, PO Box 4000, Gippsland Mail Centre, VIC 3841. After you have registered you company or business, you will need to apply for an Australian Business Number known as ABN. This is a number that all businesses must have if operating in Australia. You can get an ABN on-line at: www.abr.gov.au. You can also register for a tax file number for your business on this website as well.

Step 8: Apply for Funding/ Grants/ Loans
After you have completed your market research, written your business plan, and registered your business, you can apply for funding, government grants and loans! See the following two topics on how to raise the start-up capital needed for your business, as well as Government Grants that may be available to your business.

Raising Start-up Capital
(Information below provided by www.smallbiz.nsw.gov.au) The way you finance your business is one of the key factors that will impact on how profitable you are. There are three main ways to raise capital for start-up costs: • Shareholders' equity - yours or other investors' money. • Reserves - profits put back into the business. • Borrowed funds. Once you have decided to raise capital by borrowing money, you need to consider what source and type of finance will suit your needs. It is important that you match the method of funding and term of the loan to the purpose for which the finance is being used. Be aware that your financing decisions can seriously impact on business cash flow and taxation obligations. Which Lending Institution? There is a range of lending avenues you can use, including banks, building societies and credit unions, finance companies and finance brokers. Each has its own particular pluses and minuses, covering issues such as: borrowing criteria, repayment options, interest rates, incentives and service. How Much Capital? You need to make a realistic assessment of your financial needs, including start-up costs and how long it will take before your business can become self-supporting. This will form part of your business plan and is essential for your loan application. Your Business Plan needs to demonstrate that you will be able to repay the loan, taking into account possible risks such as lower than forecast sales or increases in interest rates.

Types of Finance
Short Term Finance This form of finance is commonly called "working capital", required to fund the day-to-day running of the business. Working capital should not be used for long-term projects as it is generally more expensive (in terms of interest rate) than money paid back over a longer period. Some examples are: Bank overdraft: An overdraft can be used to cover cash flow shortfalls from day to day. The interest will be calculated on your daily outstanding balance and is usually charged on a quarterly basis. Depending on your financier, an overdraft facility may also incur other fees. Commercial bill: An arrangement where money is made available for a short period, at the end of which you must repay the borrowed amount. Commercial Bills can be drawn for terms ranging from 30 days up to a maximum of 180 days. They are commonly used to meet the seasonal funding needs of a business. Debtor finance: An arrangement where a finance company provides a cash advance to the business against sales made (invoices). The "loan" is repaid when the debtor pays the invoice. Trade credit: A short-term source of finance obtained by buying goods and services that do not require immediate payment. If managed carefully, this can reduce the capital investment required to operate the business. Medium Term Finance Usually required for a 3-10 year period, this is principally used to finance equipment, business expansion and development of new products. Examples are: Term loans: A loan paid back over an agreed period (term) where principal and interest rate are paid off in monthly repayments. It is commonly used by businesses wanting to structure their loan repayments to correspond with the income produced from equipment purchased or sales of new products. It may be for a five or 10-year period. Personal loans: Where it is not possible to arrange a loan in your business name you could consider arranging a personal loan. This can then be contributed as equity or as a loan to the business.

Leasing: The financier purchases the equipment you require and then leases it to you in return for regular rental payments (usually monthly) for the duration of the lease period. At the completion of the lease term you are offered the option to purchase the equipment at an agreed residual value. (i.e. motor vehicle) Long Term Loan This type of finance is used to fund the purchase of assets such as the business itself, land, buildings, plant or machinery which will directly or indirectly contribute to profit over a period of years. Term loans would be the most common way to structure long-term borrowings.

Applying for a Loan
Loan applications require a lot of detail, including: The business: A short description of the business - describe the products and services you intend to provide, projected demand for your products/services and your marketing plan. Your history: Details of your own and other stakeholders' educational qualifications, business experience and past achievements. Amount and purpose of loan: The amount and purpose of the loan should be covered in detail, including how the amount was arrived at. Repayment Schedule: Clearly establish how the loan repayments will be made. Financial statements: Sales and profit projections over the term of the loan and, if an existing business, current balance sheet and the last three years' annual accounts. Include a monthly cash flow budget for the 12 months ahead with the loan repayments included.

Security Lenders usually seek some form of security from you, such as: • Assets such as real estate or shares in public companies; • Surrender value of an insurance policy; • Personal guarantee. You're more likely to succeed in your loan application if you provide a well researched and presented business plan. Your local Business Advisory Service can offer you one-on-one advice on your financing options and how to access accountants in your local area. It also offers low-cost business and financial planning workshops. Call 1300 650 058.

Government Grants
The following government grants exist currently in Australia;

TCF Post-2005 Assistance Package
In November 2003, the Australian Government announced a long-term assistance package of $747 million for Australia’s textile, clothing and footwear (TCF) industry. The package is designed to foster the development of Australian TCF manufacturing activity so that it is viable and internationally competitive. The TCF Post-2005 Assistance Package comprises a number of elements, including $600 million for extending the TCF Strategic Investment Program comprising: • $487.5 million for a Textile, Clothing and Footwear Post-2005 Strategic Investment Program Scheme (TCF Post-2005 (SIP) Scheme) to 2010 for all TCF sectors, • A $87.5 million extension from 2011 to 2015 for the clothing and finished textile sectors • $25 million for a 10 year grants-based program for small business. There are several different Government Schemes and Grants on offer within the Fashion Industry. These include: 1. TCF Post-2005 (SIP) Scheme The object of this Scheme is to foster the development of a sustainable and internationally competitive TCF manufacturing industry and TCF design industry in Australia by providing incentives that will promote investment and innovation. This program provides incentives in the form of grants, paid annually and in arrears. 2. TCF Small Business Program This is a competitive grants program to support TCF small businesses undertaking the design or production of TCF products. In addition, industry associations, business enterprise centers, educational institutions and training centers would be eligible to apply for the program, provided that projects support small TCF businesses and/or individuals. 3. $50 million for a 10-year Product Diversification Scheme This non-tradable duty credit scheme is designed to give clothing and finished textile manufacturers an extra incentive to achieve growth in value-added production, to globalize their sourcing arrangements and to diversify their existing product range. 4. $50 million for a 10-year TCF Structural Adjustment Program

This program aims to encourage restructuring and to reduce the burden of transition experienced by firms, workers and communities, particularly in TCF dependent regions. The program has three elements: • Access to the Job Network’s Intensive Support including Intensive Support Customized Assistance Program, to assist retrenched TCF employees to secure alternative employment; administered by Department of Employment and Workplace Relations. • The TCF Restructuring Initiative Grant Scheme, to assist TCF firms to consolidate in order to secure a more viable future; administered by the TCF Policy Group, Department of Innovation, Industry, Science and Research. • Supplementation of the Regional Partnerships Program, which provides assistance to communities adjusting to the consequences of TCF industry consolidation; administered by the Department of Infrastructure, Transport, Regional Development and Local Government. 5. $27 million for the Expanded Overseas Assembly Provisions (EOAP) The Expanded Overseas Assembly Provisions enables participants to assemble certain goods overseas from predominantly Australian fabric and leather. Assembled goods can then be imported for local consumption, with duty payable only on the cost of overseas processing and content. See separate EOAP fact sheet. 6. $20 million for a Supply Chain Efficiency Program from 2010 to 2015 Details of this program will be available closer to the implementation date. Full details of these grants and how to apply for them are available on the AusIndustry website at www.ausindustry.gov.au.

Other Government Grants outside of the TCF Industry Include:
National Youth Week 2009 Grants Provider: Department of Communities Amount: $70,000 is available across Queensland for Youth Week 2009 events. Closing date: Guidelines and/or dates have not been finalized for the next round Objective: The purpose of the Youth Week Grants is to celebrate young peoples' views, ideas and creativity and focus on promoting a positive image of young people in the broader community. For more information see: www.qld.gov.au/grants. Sector Project Grants

Provider: Department of Education, Training and the Arts Amount: Min: $5,000 Max: $50,000 Closing date: Ongoing Objective: To support excellence in the arts by providing one-off project funding across all art forms. For more information see: www.qld.gov.au/grants. Youth Engagement Grants 2009-2010 Provider: Department of Communities Amount: $200,000 per year ($20,000 each region, 10 regions statewide) Closing date: Guidelines and/or dates have not been finalized for the next round Objective: To support community groups to facilitate regional youth engagement initiatives across Queensland. For more information see: www.qld.gov.au/grants. Regional Arts Development Fund Provider: Department of Education, Training and the Arts Amount: Various Closing date: Ongoing Objective: To support the professional development and employment of arts and cultural workers in regional Queensland. For more information see: www.qld.gov.au/grants. Spark Provider: Department of Education, Training and the Arts Amount: Various Closing date: Guidelines and/or dates have not been finalized for the next round Objective: To assist talented young and emerging Australian artists or art workers (aged 18-26) to establish a professional career in the arts. For more information see: www.qld.gov.au/grants.

Tips for Success in Business!
• Learn as much as you can about your proposed business. Ask questions. Join industry associations. Is there a need for the product or service you are going to offer? Accept the fact that starting a business always takes more money than you anticipate. Study successful competitors carefully. Don't go into business with the sole objective of making a lot of money. Chances are you won't. But if you put service, quality, and customer satisfaction first - the money will follow. Be willing to work harder and longer than you have ever worked before. Forget about the eight-hour day and the forty-hour week! Keep complete and accurate records for tax purposes, for your banking needs, and most importantly, for your own guidance. Ensure you have the right people for the right job. Find a lawyer, accountant, banker, and insurance agent and confer with them as needed. Now is the time to develop these relationships. Run it yourself. Beware of absentee ownership. No one will look after your money, your property and your business like you will. Prepare a comprehensive business plan before investing your money into a business venture. Planning is the key to the survival of your business!



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Business Considerations: what you need to know before going into business!
Once you have determined that you are ready and able to take on starting your business, there are many practical things you need to put in place right at the start to establish your business. Considerations Include: • • • • • Legal Considerations Setting Up Your Finances Operating Your Business Promoting Your Business Keeping Pace

Some tips on how to avoid business failure: • • • Don't underestimate the capital you need to start up the business. Understand and keep control of your finances - income earned is not the same as cash in hand. More volume does not automatically mean more profit - you need to get your pricing right.

Legal Considerations • • • Decide how your business will be legally structured. (See Business Structure for more detail.) If you choose to be a sole trader, you can trade using your own name or register a business name with the Office of Fair Trading. If your business is a company, your company name needs to be registered with the Australian Securities and Investment Commission (ASIC). Register for an Australian Business Number (ABN) with the Australian Taxation Office. You can register online for an ABN at the Business Entry Point. Register for the relevant taxes, including GST and PAYG. See Taxation for further information on what relevant taxes apply to your business. You may also do this via the Business Entry Point. If you intend to employ staff, obtain information on awards, superannuation policies, workers compensation, PAYG taxes, as well as other relevant employment information. See Employment Conditions. Check on what licenses/registrations may be required for your business through the Office of Fair Trading.

















Check with your local council regarding zoning, health regulations and whether you need to lodge a Development Application or Building Application. Develop an Intellectual Property register for logos, trademarks, patents, copyright and designs. Contact IP Australia for more information. Register your website domain name if you want a strong Internet presence. You need a legitimate business or company name, e.g. through the Office of Fair Trading, to get a .com.au address. You can search for and register a domain name at www.auda.org.au/domains/au-domains/. Draw up your Will, especially if you are a sole shareholder/director.

Setting Up Your Finances • Set up a business bank account (if you have registered a business name you will need to have your Certificate of Registration of Business Name). Discuss your financial position and any loan arrangements with your lender. (the section on Raising Finance will help you think through what type of finance you should be seeking.) Consider merchant facilities (for instance EFTPOS and credit facilities for your customers). Choose your accountant and set up your financial record keeping system. Set up a system to monitor the financial performance of your business, e.g. cash flow budget. Consider benchmarking your business against profiles available from your local Business Advisory Service.



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Operating Your Business • Identify the benefits and disadvantages of purchasing property versus leasing property versus working from home. See Commercial Leases on what to take into account when negotiating leased premises. Negotiate and sign any lease/purchase documentation in consultation with your solicitor. Arrange for business insurance, including public liability, vehicle, fire, burglary, professional indemnity and sickness. See Insurance for further detail. Arrange for connection of utility services, such as electricity, water, telephone and gas. Purchase business equipment, fittings and furniture.

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Develop an asset register. Order and purchase stationery, tax invoices, letterheads, business cards and record keeping book. Arrange for a suitable filing and accounting system. Order and purchase trading stock and determine terms of payment, delivery and freight.

Promoting Your Business • Make sure you identify and promote your business at every opportunity, e.g. through your stationery and other promotional material. Determine your advertising and marketing needs. Decide on the cost/benefit of using an advertising agency. Think about how you could network with other businesses to promote your products or services. Determine how e-business could work for you. Develop a marketing plan that will not only sell your products but also promote your business





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Keeping Pace • Make sure you have a well-prepared business plan, one that you review over time as your business develops. See Business Planning to help kick this off. Join a trade association/chamber of commerce. If you are in a partnership, consider obtaining a Power of Attorney for you and/or your partners. Review your Will from time to time to ensure it reflects any change in your circumstances. Stay up to date with changes in your industry, customer preferences and business regulation system. Undertake further training and build professional relationships to build your business capability.

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More Information Office of Fair Trading: call 13 32 20 or visit www.fairtrading.nsw.gov.au.

The Australian Securities and Investment Commission can be contacted on 1300 300 630 or visit www.asic.gov.au.

Commercial leasing
You might consider a lease if you want to start your own fashion boutique, or if you need office space or a sample room to create your designs. A ‘lease’ provides you with the legal right to occupy premises. It protects you and the landlord by setting out all the agreed terms of occupancy. When taking out a commercial lease you first have to decide on what premises and lease will be right for your business, then you have to clarify with the landlord in writing all issues about the lease and the premises before signing the document. Questions to Ask Yourself when finding a Retail space or commercial office/ work room: • What location and how much space would best suit your business? • How much rent can you afford as your starting rent and can you afford an annual increase? • How long do you need to be there to recover your costs and make a profit? • How long do you need the lease to be? The longer the lease the higher the security, but the less flexibility you will have to expand or move premises.

Before Signing a Lease You should have detailed discussions with the landlord/agent before signing and also seek advice from business associations, your solicitor and accountant. Obtain a draft lease and check: • What is the lease duration? • Does the lease have an option to renew? • What is the rental and how often does it have to be paid? • If you sell the business do you have the right to transfer the lease to the new owner? • Does the lease allow for the type of business you want to

• •

conduct? Can you sub-let all or part of the premises? If so, under what conditions? Who is responsible for council rates, water costs, legal fees, stamp duty, security, cleaning, etc. under the lease?

Specific Issues to Consider Commercial leases are normally non-standard documents prepared by solicitors acting for the landlord. Be aware that all aspects of the terms of the lease are negotiable. Within the lease contract, you should consider: Rent • How is rent calculated? Is it including or excluding outgoings? • How and when will rent increases be calculated? • What happens if the space becomes unusable or your use of the place is disrupted by maintenance or construction? Do you have to keep paying rent? Can you get out of the lease? Can your landlord end the lease? Other Outgoings • Do you have to pay a security bond or deposit? (Often three months rent is required.) • What equipment and/or services are included in the lease? • Do you have to pay for repairs and maintenance of the premises? Other Obligations • What do you have to do when the lease ends - either at the end of the agreed term or because your landlord or you have ended the lease? • Are there any general rules that apply to all the tenants in the building or centre? • If the landlord claims that you are in default, how much notice are you entitled to before the landlord can terminate the lease? Are you entitled to have a chance to rectify the default first? Permitted Uses and Access • Are there others with the same or similar businesses in the same centre/location? If the landlord has promised not to allow any of your competitors into the centre or building is this set out clearly in the lease? • Do you need any licenses to operate your business? • Are there any restrictions imposed by council zonings, other local/state legislation or the lease?



What hours can you access the premises? Will this be a problem? Will there be any restrictions imposed by the landlord or council regulations? Can opening hours be easily changed, if required?

Location and Building Design • Does the location and space suit your business and can it be used for the intended purpose? • Will the building need to be upgraded or renovated to enable the proposed use or to meet legislative requirements? Who will pay for this and any ongoing maintenance? • If fit-out is required, what will be needed and who will pay for and maintain it? Who will own the fit-out and do you need approval to change it? Does the fit-out have to be removed at the end of the lease? Insurance • Will you have to take out any insurance? What type - public liability, building, glass, for your fittings? How much will it cost? Will you have to get consent from the landlord about things that might affect his/her insurance? • Do you have to contribute to the landlord's insurance as well as paying for your own? More Information Your local Business Advisory Service can offer you one-on-one advice on taking out a commercial lease. Call 1300 650 058.

Insurance
Insurance is an essential part of running any business. If you are operating a small business you need more than just property insurance. Taking out the right insurance will help protect your business and minimize its exposure to risk. Your insurance requirements will vary according to the type of business you are operating, but you should be aware that some forms of insurance are compulsory, such as workers’ compensation and third party car insurance. When you’re in business you deal with a variety of potential risks each day. Risk is not something you can avoid, but it is something you can manage. Risk management will increase the probability of success and reduce the probability of failure of your business. See the topics below for information about different types of insurance. Workers Compensation You must provide accident and sickness insurance for your employees workers compensation - through an approved insurer. Workers compensation is covered by separate state and territory legislation. Personal accident and illness If you are self-employed you won’t be covered by workers compensation, so you need to cover yourself for accident and sickness insurance through a private insurer. There are several types of life insurance. Some are investment-type funds where you contribute over a certain time and get back your investment plus interest earnings at the maturity date. Others are designed to cover risk - things that could happen to you. Types of cover include Income protection and disability insurance. Superannuation If you are running a business or employing people, you are likely to have superannuation obligations to your employees. If you are selfemployed you also need to provide for your retirement superannuation is generally used to provide for a retirement plan. Public Liability Public liability insurance protects you and your business against the financial risk of being found liable to a third party for death or injury, loss or damage of property or ‘pure economic’ loss resulting from your negligence.

Professional Indemnity Professional indemnity insurance protects you from legal action taken for losses incurred as a result of your advice. It provides indemnity cover if your client suffers a loss - material, financial or physical - directly attributed to negligent acts. Product Liability If you sell, supply or deliver goods, even in the form of repair or service, you may need cover against claims of goods causing injury or damage. Product liability insurance covers damage or injury caused to another business or person by the failure of your product or the product you are selling.

Case Study 1: Starting a Fashion Label in 5 Easy Steps
By Carl Dunning from impclothing.com
The hardest part breaking into the fashion scene is first of all thinking to yourself “do I really want to work in this industry?” The next question is “how bad do I want it?” If the answers for these were “yes, I want to work in fashion and I want it bad!!” then there should not be a second thought about starting up a label. The next few steps may seem very easy but it is funny how people’s minds can be clouded. It is fear of the unknown that freezes our progress but as you will see there is nothing to fear. Step 1: Now you have to begin with what you want to design, whether these be tees, jeans, dresses, shoes, hats. The answer may be one of these or it could be all but the end result is you now have chosen what you want to produce. Step 2: Next comes the question of “who am I aiming these clothes at?” Again this could be 18-25 year olds, 30-50 year olds or even every living soul. For the sake of argument let’s say you have now chosen to make hats for 18-30 year olds. Already you have narrowed down your label and it is starting to take shape in your mind. Step 3: The label you have you must decide what kind of spin you are going with e.g. Punk, funky, simple etc. This is an important aspect of your label, as this will define your market and also your identity. In this instance let’s say it’s a funky style. A great example of a culture is our flash website *www.impclothing.com.au*. This shows how you designs can be so much more then just pretty pictures. Step 4: Ok to recap, already we have a label that makes funky hats made for 18-30 year olds. Just writing this I can even see what they are going to look like in my head. Now you can put these ideas down on paper. Create what you would want them to look like and the best way of doing this is to think, “What would I wear?” Step 5: So you have your label culture, designs and all you need now is a name and logo. This is very exciting as you get to name your creation. For this I would give a thumbs up to just grabbing some paper. Write down words that you would link with your label e.g. Peace, groove, bass, music, hip, revolution, hats, head etc. Now let’s make a name, “Groove Revolution”, now this may not be the best name but you get the idea. Next comes a logo and easy one for this could simply be GR or maybe a little picture of a music note. Step back and see what you have!

Trade Shows
Using Fashion Trade Shows to Promote Your Designs There are two sorts of marketing, which most followers of fashion are aware of - selling directly to the public, and promoting high fashion designs on the catwalk. In reality, however, the fashion industry is largely structured around a third - the trade show. Trade shows occasionally include catwalk fashion shows, but they are not open to the public. They are aimed at bringing together designers and retailers to see how they can help each other. You'll find trade shows advertised in the fashion industry press (different from mainstream magazines about fashion) and on the Internet, and you'll hear them discussed at networki ng events. Before you consider going to a trade show, find out which buyers are expected to be there. Booking a booth at trade show costs money, so you need to know that it's likely to be worth your while. Actual goods and money rarely change hands at trade shows. The aim, for booth holders, is to generate sales leads. Be ready to talk enthusiastically about your designs and make potential buyers feel welcome. If you're lucky, you'll collect some business cards with numbers, which you can call the day after the show closes. Always make your calls promptly. Buyers will see lots of other designs at the show and if you're not quick about things they may forget yours!

Setting up a Trade Show Booth A trade show booth is not like a stall in a marketplace. There are several things you should prioritize: • Display the right items- Take just a few of your strongest designs ones that look good together - and use mannequins to show them, as they would look when being worn. Have a catalogue available for buyers who want to see more. Create the right atmosphere-Bring fabric to drape around your stall, covering up tables and hardboard walls. A banner featuring your name and logo will make you more memorable. Make your work look good- there are usually floor ports available for plugging in electrical devices, so you can use spotlights. If you can afford it, a plasma screen television playing a short advert for your work will really get attention. Have interesting things to take away-As well as your business card and promotional materials featuring your work, you can offer free sweets or small promotional items. Making the Most of Trade Shows As well as giving you the chance to promote your own work, trade shows present a great opportunity to take a look at other people's. Despite the high-pressure environment, you'll find that most people at trade shows are friendly and you may pick up some useful tips. At larger trade shows you'll meet designers whose target markets are very different from yours, so that you're not in competition, and they may be willing to trade business secrets. Trade shows are great for networking so do your best to be nice to everyone and collect business cards when possible - you never know when they might come in useful. Attending a trade show can be a nerve-racking experience, especially the first time you do it. Many buyers go to trade shows specifically to look at the work of new designers, so you won't be short of opportunity.







Top Trade Shows in Australia
Fashion Weekend Sydney Date: 14-MAY-09 to 17-MAY-09 Fashion Weekend Sydney is the ultimate fashion event. The event will provide the opportunity to meet all the fashion lover and fashion industry professional under one roof. Fashion Weekend Sydney is the only fashion event to give you access to such a large number of designers selling their current and last seasons collections at a fraction of their retail price. Venue: Royal Hall of Industries & Hordern Pavilion, Sydney, New South Wales, Australia Fashion Exposed Date: 30-AUG-09 to 01-SEP-09 FASHION EXPOSED offers a varied assortment of woman's wear, men's wear, children/infant wear, intimate apparel/sleepwear, street/surf/urban wear, accessories, and footwear to Manchester, furnishings and homewares. The event allows new companies the opportunity to showcase their new and exciting ranges. There will be an exceptional array of new Children swear companies that would display alongside the Boutique Childrenswear sponsor Studio Bambini. Venue: Melbourne Convention and Exhibition Centre (MCEC), Melbourne, Victoria, Australia Tel: +(61)-(613)-96547773 http://www.fashionexposed.com/s Preview Date: 30-AUG-09 to 01-SEP-09 Preview is where collections of designers from all around Australia and overseas sell their ranges. It will be a wonderful networking opportunity and a terrific forum for upmarket designers to come together and be in the one place. From its inception, preview has been synonymous with design excellence and innovation, and is now fast winning recognition at home and abroad. Venue: Melbourne Convention and Exhibition Centre (MCEC), Melbourne, Victoria, Australia Organizer: Australian Exhibitions & Conferences Pty Ltd http://www.fashionexposed.com/ Sydney Bridal Fashion Week Date: 11-MAR-10 to 14-MAR-10 Sydney Bridal Fashion Week - hosting leading International Global Fashion Designers in SYDNEY 2010, featuring Haute Couture & Bridal Fashion Collections. Designers familiar with the catwalks in PARIS, MILAN, ROME, NEW YORK, and Fashion Week Events worldwide, will now be heading down under for back to back catwalk shows at this prestigious fashion event. 3 days of entertainment and glorious fashion as never been seen before in Australia. Venue: Sydney Olympic Park, Sydney, New South Wales, Australia Organizer: Em Exhibitions Tel: +(61)-(40)-6756136 AUSTRALIAN SHOE FAIR - MELBOURNE 2009Sept. 13 - 15, 2009 Melbourne Exhibition & Convention Centre Tel: +61 (0)3 9205 6400 Web Site: http://www.aec.net.au/shoe/ REED GIFT FAIRS - BRISBANE 2009 July 04 - 07, 2009

Brisbane Convention & Exhibition Centre Tel +61 (0)7 3308 3000 http://www.reedgiftfairs.com.au/ JAA AUSTRALIAN JEWELLEY FAIR 2009 Aug. 30 - Sept. 01, 2009 in Sydney Expertise Events Unit 4 / 1 Skyline Place Frenchs Forest NSW 2086 Tel:+61 (0)2 9452 7575 Website: www.eventseye.com/fairs

Appendix 1: How to Write A Business Plan: Template
Your business plan is essential for your business - it's your blueprint for the future. It sets the direction for your business and keeps you on track once you're up and running. It's also a requirement when you're seeking finance. A good plan is like a map, helping you to find the best path to achieving your goals. Setting business goals helps you to use your time and resources more effectively. By planning ahead you are more likely to be able to take advantage of business opportunities and anticipate problems. Depending on what type of business you intend to start, your business plan could include these elements: 1.0 Executive Summary 2.0 Business Goals 3.0 Description of the Business 4.0 Management Plan 5.0 Market Research and Analysis 6.0 Marketing Plan 7.0 Operational Plan 8.0 Financial Plan 9.0 Action Plan

1.0 Executive Summary
You can write the Executive Summary after you have finished writing the rest of your business plan. The executive Summary is usually a short summary of the content of your business plan. It should only be 1 page in length. The aim of the executive summary is so that a reader can pick up the business plan and read the first page; and be able to understand the fundamentals of your business.

2.0 Business Goals
In this section, include you business: • Mission statement • Business Objectives • Business Goals Your Business mission statement and goals should summarize why you are in business, and the purpose that your business serves.

3.0 Description of the Business
In this section, provide a detailed description of your business. An excellent question to ask yourself is: “What business am I in? “ In answering this question include your products, market and services as well as a thorough description of what makes your business unique. The business description section is divided into three primary sections, • Business description: nature of business • Product or service you will be offering and the • Location of your business, and why this location is desirable When describing your business, generally you should explain: • Business structure: sole trader, partnership or company. • Business Type: wholesale/retail, manufacturing or service. • What your product or service is. • Is it a new independent business, a buy-out, an expansion, a franchise? • Why your business will be profitable. What are the growth opportunities? • When your business will open (days, hours)? Business Description In the description of your business, describe the unique aspects of your business and how or why they will appeal to customers. Emphasize any special features that you feel will appeal to customers and explain how and why these features are appealing. Product/ Service Try to describe the benefits of your goods and services from your customer’s perspective. Successful business owners know or at least have an idea of what their customers want or expect from them. This type of anticipation can be helpful for beating the competition or retaining your competitiveness. Describe: • What you are selling. • How your product or service will benefit the customer. • Which products/ services are in demand • What is different about the product or service your business is offering. The Location The location of your business can play a decisive role in its success or failure. Your location should be built around your customers. Where your business will depend on personal contact with your customers, it should be accessible and it should provide a sense of security.

Consider these questions when addressing this section of your business plan: • • • • What are your location needs? What kind of space will you need? Why is the area desirable? The building desirable? Is it easily accessible? Are market shifts or demographic shifts occurring?

4.0 Management Plan
Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, and an ability to make decisions and manage both employees and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for and facilitates the success of your business. The management plan covers how your business will be structured and run and what management capabilities will be developed. It could also cover any legal matters in relation to structure, intellectual property rights, licensing and contractual matters, for example with suppliers. Based on your research, it is useful to undertake a SWOT: an assessment of your business. Like plant and equipment, people are resources – they are the most valuable assets a business has. You will soon discover that employees and staff will play an important role in the total operation of your business. Consequently, it’s imperative that you know what skills you possess and those you lack since you will have to hire personnel to supply the skills that you lack. Additionally, it is imperative that you know how to manage and treat your employees. Make them a part of the team. Keep them informed of, and get their feedback regarding, changes. Employees often have excellent ideas that can lead to new market areas, innovations to existing products or services or new product lines or services that can improve your overall competitiveness.

Internally Strengths you should build on Weaknesses you need to overcome

Externally Opportunities you should exploit Threats you need to manage

Put dot points under each heading which realistically and honestly reflect your research and self-assessment. Your business plan needs to develop strategies to deal with identified issues. Your management plan should answer questions such as: • How does your background/ business experience help you in this business? • Who will be on the management team? • What are their strengths/ weaknesses? • What are their duties? • What are your current personnel needs? • What are your plans for hiring and training personnel? • What salaries, benefits, and holidays will you offer?

5.0 Market research and Analysis
List the market research that you conducted and the results that you found. Include statistics that support your business idea. This shows business bankers and investors that you have done your homework, and have researched the feasibility of your business.

6.0 Marketing Plan
Marketing plays a vital role in successful business ventures. How well you market your business, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers – their likes, dislikes and expectations. By identifying these factors, you can develop a marketing strategy that will allow you to full-fill your customer’s needs. Your marketing plan needs to identify: • Your product/service: What are you offering your customers? What is its likely life cycle? Are there substitutes available in the market? Will it meet your customers' needs? Your market: Its size, geographic location, demographics and trends? Your customers: Who are they? What, why, where and how often do (will) they buy? Your competitors: Who are they? How do they compete on price, services, and quality? Pricing strategy: What is the pricing of your products? Advertising and Public Relations: What advertising do you plan on doing?

• • • • •

Your marketing plan needs to cover the strategies you will put in place to capture and keep customers. This includes how you will make your product/service available; how you will promote them and build your business image (including networking); and your pricing policies. Identify your customers by their age, sex, income, educational level and residence. At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the marketing plan to include other customers. The Business marketplace is highly competitive. You need to know you’re your competitors are, and establish a unique point of difference from them. Outline what you do differently to your competitors in your business plan. Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market area and if they are in line with industry averages. Some of the pricing strategies are: • • • Competitive position Pricing below competition Pricing above competition

How you advertise and promote your goods and services may make or break your business. Having a good product or service and not advertising and promoting it is like not having a business at all. Many business owners operate under the mistaken concept that the business will promote itself, and channel money that should be used for advertising and promotions to other areas of the business. Advertising and promotions, however, is the lifeline of a business and should be treated as such. Devise a plan that uses advertising and networking as a means to promote your business. Remember the more care and attention you devote to your marketing program, the more successful your business will be. TIP: Use the Marketing Plan Template in Tutorial 9: Fashion Marketing to help you formulate your plan.

7.0 Operational Plan
You will need to make decisions on a range of operational issues, including: • • • • People Will you employ or use contract staff? If so, how will you manage them? What other expertise will you need? Processes What systems and procedures should you put in place? What production output and methods will you use? Suppliers Who should they be? Cost and quantity of supplies? Equipment/technology What equipment and IT requirements do you have? What skills will you need to maintain or upgrade these? Premises Will you purchase or lease property or work from home? See Commercial Leases on negotiating leases. Reporting what is the most suitable reporting system to put in place to allow you to monitor your performance?

• •

8.0 Financial Plan
Sound financial management is one of the best ways for your business to remain profitable. How well you manage the finances of your business is the cornerstone of every successful business venture. To effectively manage your finances, plan a sound, realistic budget by determining the actual amount of money needed to: • Open your business (start-up costs) and • The amount needed to keep it open (operating costs). Your start-up budget will usually include such one-time-only costs as major equipment and materials, fit-outs and lease or rental bonds, etc. An operating budget is prepared when you are actually ready to open for business. The operating budget will reflect your priorities in terms of how you spend your money, the expenses you will incur and how you will meet those expenses (income). Your operating budget also should include money to cover the first three to six months of operation. Your financial plan should also include: • • • Financial analysis - projected profit and loss over the next year Cash flow analysis - projected cash in and out on a monthly basis so that you can check whether you will be able to pay your bills; Sources of finance - who will lend you money and how much will



you need? (See Raising Finance.) What your business break-even point is, i.e. what level of production is needed to cover all your costs?

9.0 Action Plan
This should set out specific tasks that need to be undertaken to implement your business plan, with clear priorities, timeframes and who will be responsible.

Business Plan Do's and Don'ts
Do: • • Keep updating your plan to meet changing situations. Use business planning templates and tools to be sure you cover everything. Refer to your action plan as a living guide. Keep your Business Plan short and to the point

• • Don't: • Be unrealistic about what you can achieve or base your projections on wishful thinking. • Underestimate the challenges in growing a business. • Be afraid to ask for help. • Don't spend too long creating the "perfect" marketing or business plan. Many businesses get bogged down writing huge documents. More Information Industry Associations and your local Chamber of Commerce and Industry offer advice and services to members. Your local Business Advisory Service can offer you one-on-one advice on developing your business plan. It also offers low-cost workshops covering all aspects of business planning. Call 1300 650 058.

Appendix 2: INCOME PROJECTION STATEMENT TEMPLATE
Indu stry (%) Total Net Sales Cost of Sales Gross Profit Gross Profit Margin Variable Expenses Salaries/Wages Payroll Expenses Legal/Accounting Advertising Motor Vehicles Supplies Subscriptions Repairs & Maintenance Outside Service Miscellaneous Total Variable Expenses Fixed Expenses Rent Depreciation Utilities Insurance License/Permits Loan Repayments Miscellaneous Total Fixed Expenses Total Expenses Net Profit (Loss) Before Taxes Taxes Net Profit (Loss) After Taxes INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT J a n F M A M J J A S O N D e a p a u u u e c o e b r r y n l g p t v c Annual Total Annual (%)

The income projections (profit and loss) statement is valuable as both a planning tool and a key management tool to help control business operations. It enables the owner/manager to develop a preview of the amount of income generated each month and for the business year, based on reasonable predictions of monthly levels of sales, costs and expenses. As monthly projections are developed and entered into the income projections statement, they can serve as definite goals for controlling the business operation. As actual operating results become known each month, they should be recorded for comparison with the monthly projections. A completed income statement allows the owner/manager to compare actual figures with monthly projections and to take steps to correct any problems. Industry Percentage In the industry percentage column, enter the percentages total sales (revenues) that are standard for your industry, which are derived by dividing Costs/expenses items x 100% Total net sales These percentages can be obtained from various sources, such as trade associations, accountants or banks (see FMRC Business Benchmarks). Industry figures serve as a useful benchmark against which to compare cost and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the annual percentage column. Total Net Sales (Revenues) Determine the total number of units of products or services you realistically expect to sell each month in each department at the prices you expect to get. Use this step to create the projections to review your pricing practices. What returns, allowances and markdowns can be expected? Exclude any revenue that is not strictly related to the business Cost of Sales The key to calculating your costs of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all products and services used to determine total net sales. Where stock is involved, do not overlook freight costs. Also include any direct labor. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit.

Gross Profit Margin The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing Gross profits Total net sales.

Variable Expenses Salary/Wages Payroll Expenses Legal/Accounting Advertising Motor Vehicles Supplies Repairs & maintenance Outside service Base pay plus overtime Include paid holidays, sick leave, Superannuation Outside professional services. Include desired sales volume and classified advertising Include charges if personal car is used in business, including parking, tools, buying trips, etc. Services and items purchased for use in the business. Regular maintenance and repair, including periodic large expenditures such as painting. Include costs of subcontracts, overflow work and special or one-time services.

Fixed Expenses Rent Depreciation Utilities Insurance License/Permits Loan repayments Miscellaneous accounts. Net Profit (loss) (Before taxes) Taxes Net Profit (loss) (After taxes) Annual Total Subtract taxes from net profit (before taxes) For each of the sales and expense items in your income projection statement, add all the monthly figures across the table and put the result in the annual total column. Calculate the annual percentage by dividing Annual total x 100% Total net sales. List only real estate used in business. Amortization of capital assets. Water, Electricity and Gas Fire or liability on property or products. Include worker’s compensation. Any licenses or permit fees required to establish or run the business. Interest on outstanding loans. Unspecified: small expenditures without separate

Subtract total expenses from gross profit.

Annual Percentage

Appendix 3: Business Contacts and Planning Tools
When starting your Business you can find a range of advice and support available from government and other organizations. This includes information and advice on starting a business, as well as planning templates and checklists. Australian Competition and Consumer Commission http://www.accc.gov.au Ph: 1300 302 502 Aus Industry AusIndustry is the Australian Government's principal business program delivery division in the Department of Innovation, Industry, Science and Research. www.ausindustry.gov.au Business Support Checklists: www.business.gov.au Enterprise connect Enterprise connect provides comprehensive support to Australian small and medium sized enterprises (SMEs), to help them become more innovative, efficient and competitive. www.enterpriseconnect.gov.au Ph: 13 17 91 Business Enterprise Centers (BECs) BECs or Small Business Centers provide free advice and assistance to small business located throughout Australia. www.beca.org.au Ph: 1300 363 551

Part C: Self Assessment
1. Write a Business Plan
Write a Business Plan for your very own Business. (NOTE: You don’t have to physically register the business, this is an exercise in business planning. Even if you don’t plan on going into business for yourself, having a sound knowledge in business planning will be of benefit to any company that you work for.) Use the business plan template provided and include the following in your assignment: • • • • • • • • • Executive Summary Business Goals Description of the Business Management Plan Market Research and Analysis Marketing Plan Operational Plan Financial Plan Action Plan

The Business plan that you write can be for your own fashion label, or a fashion boutique. You can also choose if your business will sell wholesale or retail. Remember there is no limit to where or how you will run your store, or label. For Example your boutique could be an on-line store! You can choose the type of merchandise you store or label will sell: childrenswear, bridal, lingerie, shoes, high-end designer fashion, fast fashion or maybe even vintage! Remember to include in your Business Plan: • Business structure • Business Name • Business expenses • Pictures or examples of type of product you will sell/ design

www.fashion-design-course.com
la mode college of creative industries

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