How To Fund Your Business
Stressing out about how you’re going to fund your slow fashion business? We know that starting a product-based business can require a lot of upfront investment and capital so we’re going to talk all about how you can fund your business!
1. Self Funding
You can use your personal savings to fund your business or even side hustle. Commonly, people work part-time or full-time jobs outside of starting up their own business so that they can raise capital to put towards their business. If you listen to Episode 55 of Recloseted Radio, you can hear all about how Selina Ho, our Founder, side hustled Recloseted. We understand though that working another job while trying to kickstart your business off the ground can be exhausting so it’s extremely important to monitor your mental and physical health.
2. Family And Friends
If you’re comfortable with it, you can ask to borrow some money from your trusted friends or family. But with this one, you have to make sure you treat it just like you are borrowing from the bank— take it seriously. One of our clients was able to successfully launch her brand using this funding method because she set out a timely and organized plan that allowed her to keep herself accountable and on track to pay back the borrowed money. You can totally do this too and map out a plan that will be best suited for you and your family/friend’s needs.
3. Pre-Sales
Getting funding from your customers through pre-sales is also possible. With this method, you put your product online for pre-order and start making the products once you get funding from successful sales. However, with this method, you need to be highly aware of the timing and management of production and shipping.
4. Crowdfunding
Through this method, you can receive funding from your customers or members of your slow fashion community to help you crowd some funds for your business. Be clear about your mission and what you hope to bring to fruition with their financial support. You can utilize resources such as Kickstarter, Indiegogo, etc. to raise funds for your product!
5. Grants
This one is pretty straightforward— apply for government grants. Grants are like free scholarship money for your brand. There is no interest or payment plan associated with this “scholarship”. This is just money that the government is giving you in support of your business, stress-free, with no repayment system in place.
6. Loans
Lastly, you can borrow money from banks, but keep the interest rates in mind. Make sure to be meticulous about these loans too so that you don’t get into any sticky situations in the future!
We want to quickly touch on venture capital. Here at Recloseted, we strongly advise against this route unless you are aware of that industry and how it works. Read Chip Wilson, Founder of Lululemon’s book, “Black Stretchy Pants”. A lot of the time it’s an extremely large amount of work and without a solid customer base, MVP, or some type of product, investors are often hesitant. And at this time, many investors love tech companies and tend generally not to invest in fashion. Additionally, if you don’t have to, never give away parts of your company.
