How to Recession-Proof Your Sustainable Fashion Brand
Are your sales not doing great right now? It may not be you or your product. It could just be the reflection of the market! In this blog post, Selina talks about her insights on the status of our economy, tips on how to recession-proof your business, build an intentional brand, and so much more!
With the ongoing inflation and global events, our economy is heading toward a recession. The market is quite unpredictable and we don't have a crystal ball so what should you do? Recession-proof your sustainable fashion brand!
Before we deep-dive into the steps of recession-proofing your business, here are some important mindset tips:
If your sales aren’t great right now, it may not be you or your product. It could just be a reflection of the market. For example, if you’re targeting working women, you may have seen a blip in your sales as people were returning to their offices, but now with the economy and layoffs, people may be hesitant to buy clothes so your last launch didn’t do well. Don’t be hard on yourself since there are a lot of external factors involved.
Remember that the economy is cyclical — we will return “back to normal,” the economy will thrive again, and we’ll have another downturn/recession. As I’ve mentioned, it’s unpredictable so the best thing you can do is be prepared.
Take note of your emotions and what’s going on. My best tip is to journal about it. That way, the next time the economy inevitably dips, your past self can reassure your future self. If you’re a long-time listener of the podcast, you’ll know that I suggested doing the same thing when COVID first happened. If you did that, go back and read your notes from before to see how you felt. It can help validate your fears and worries. Moreover, it can also help you realize that you survived that so you can most definitely survive this!
Remember WHY you’re doing this so that you can preserve and get through any challenges in the upcoming months.
Now that you’re in the proper mindset, let’s move on to recession-proofing your business. Here are my 5 personal strategies and tips.
Look At Your Numbers
The numbers don’t lie and it’s the lifeline of your business. You need to make money and you need to know how much money you have left after costs. It can be quite scary to look at the numbers but you have to face the reality so you can act accordingly. Here are some key questions you can ask:
How much runway do you have saved up?
How many months can you go without sales?
Where can you cut back on costs?
How can you make some additional income with your business or with yourself right now? (e.g. selling gift cards, donations, freelance work, etc.)
It’s quite common for founders to skip paying themselves for the time being but to pay the bills, perhaps you can also get your income elsewhere.
Hone In On Your Target Demographic
When times are tough and people are afraid to lose their jobs, they’re a lot more cautious about their money so it’s really important to keep in touch with your target customer.
What does she/he/they need right now?
How can you support them?
What are their pain points?
Less Production
It’s best to decrease your production. The reason behind that is that I don’t want you to handle the stress of having all your capital tied up to inventory that’s not selling.
I would recommend potentially switching to a made-to-order / pre-sales model so you know how much inventory you’re going to have and so you don’t have too much capital tied up in production.
You can also produce fewer styles and fewer quantities but be super specific about what your target demographic needs right now.
Intentional Design
In economic downturns, people tend to buy more intentionally and thoughtfully so they tend to buy less trendy pieces and more investment/staple pieces. From a design perspective, this translates to classic cuts, neutral tones black and white, and clothing that people can wear in different ways.
Build Up Runway
As much as possible, start saving and building your nest egg. We don’t know how long this recession could last but at the minimum, plan for 6 months and if you can, 1 year. Again, try to do this by being intentional about what you’re selling to your customers and thinking about creative ways to bring in revenue to your business.
I hope this blog post has been helpful to you. I don’t want any sustainable fashion brand to go out of business during this time. If you play smart with your money and time, you can survive if not thrive!
If you’re a slow fashion founder and you’d like help with your sustainability strategy, sustainability priorities, sourcing materials and manufacturers, reporting impacts, and communicating efforts to customers — we can work together through our Sustainability Consulting Services. Our team only works with a limited number of clients every year so if you’re interested in working together, you can request a complimentary consultation to see if it’s a fit to work together and create a tailored consulting package for your needs.
