Today I'm going to start writing about the challenges of running a business, specifically, a fashion or design business. I'm writing from my own personal experiences but know that experience can vary widely. There are three points I'll focus on over the next few weeks: Money, Risk, and Perception. I wanted to talk about these things specifically because they don't get much air time.
This section is first because people don't usually want to talk about a simple reality: money - and money is a complicated thing. How will a project get funded: Do I put in all my own personal money? Do I try to get a loan from a bank? Do I ask family for help? Crowdsourcing? Given the size of my business, will business partners make my business a priority? These are all excellent questions to ask, I'm not sure I know all the answers but I'll tell you what I've experienced.
Do I put in all my personal money? I tried this for years, it was never enough. The rate of money I was making to how much I spent never left me with enough to purchase new materials and make new products and drive new sales and business. However, if you are in a position to put in a lot of money in one go and have those kinds of resources, I recommend this because it avoids interest, etc.
Do I try to get a loan from a bank? Three years ago I wrote a detailed seventy page business plan complete with research and many months of my work and time. I was encouraged by my local bank to assemble this plan despite the fact that I had no assets (i.e. I didn't own a house or have other liquid financial assets - which I told them directly from the beginning). The reason I did not get the loan was because I had no assets. So, if you have assets, maybe it's worth going down this road and trying to get a bank loan, but if not I think your best options might be below.
Do I ask family for help? You can, and in the end I did ask for some help which I was grateful to receive. I also put my own savings in at the same time so it was split. I think it is important to use your own money because then you feel a lot better about it at the end of the day.
Crowdsourcing? In theory I love this idea, but these days it feels like it comes with too many strings attached. Places like Kickstarter have great intentions, but as time has gone on I think it's become more about the deals you get rather than supporting a company you believe in. Don't get me wrong, sending out thank you notes or a tote bag as thanks is a great idea, but something about the breakdown of "the more you donate the more you get" defeats the purpose. It has also become a show in theatrics - the only way to stand out now is to make an amazing video. In fact, it's just like Bill and Ted said:
Bill: Ted, while I agree that, in time, our band will be most triumphant, the truth is, Wyld Stallyns will never be a super-band until we get Eddie Van Halen on guitar.
Ted: Yes, Bill, but.... I do not believe we will get Eddie Van Halen before we have a triumphant video.
Bill: Ted, it's pointless to have a triumphant video before we have decent instruments.
Ted: Well, how can we have decent instruments if we don't really even know how to play?
Bill: That is why we need Eddie Van Halen!
Ted: And that is why we need a triumphant video!
Both:[think for a second]EXCELLENT!(guitar riff)
Crowdsourcing has the potential to be done correctly though, don't get me wrong. I'm currently "donating" to one artist on a monthly basis, it's a small amount but I like the idea that it's continuous. I think if you structure it right it will work. For instance, with this artist, we usually get to see what his new material is before he posts it live, or a free download of past audio music files. Given the size of my business, will business partners make my business a priority? This, out of all the above questions, is the most important because it will effect you everyday once your business is off the ground. I struggle with this more than anything I've encountered so far. As a small business owner, what to me may seem like a large amount of money to be investing, will seem like peanuts to your bigger business partners and you will often be left in the dust scratching your head. How do you get around this? The simple answer is you don't and you kind of have to bite the bullet or walk away. If you decide to bite the bullet, I recommend finding creative ways to work around your it. Find ways to stand and out make them want to work with you. Offer them something that their bigger clients wouldn't usually provide. Try your best to appeal to their human side. Sometimes businesses get used to just thinking of each other as a means to become profitable, but it's good to remind them that there are real human people behind your business. I have not mastered this yet, but if I do I'll let you know.
If you have any thoughts you'd like to add, feel free to write in the comments section!