How much cash do you need to start a small clothing line?

On Quora, someone asked me how much cash do you need to start a small menswear label? I haven’t responded over there yet, it was too long so I thought to post it here first. I frequently get variations of this question, a previous entry I wrote was how much does it cost to start a handbag line. My stock response is, how much does a house cost? Is it a dump in a crappy neighborhood or is it a restored pristine cottage on Martha’s Vineyard? The questioner asked me how much cash I would need and I wouldn’t be so boorish as to drill that down because why would he or she care? He or she would want to know what they can expect to pay, not what I would.

But then I thought, maybe I should answer the question literally in terms of how much cash I would need to start a menswear clothing line. That is a better question because most startups (nearly all) waste way too much money. Okay, so let’s unpack this. By the way, I suggest you hang around for this even if you don’t care one whit for menswear.

My first thought was “menswear label” is too broad, I’d have to determine my customer within the parameters of what I’m interested in producing. You need to do that too. Is your market young urban males, marathoners, bikers, C-level executives or your average IT guy? Each market has its own dictates for everything from styling and fitting in, to disposable income, signaling requirements and need. Since I have tons of menswear experience, I’d do casual western styled sportcoats at a mid range price point for men aged 35+. Forced to put a point to it, my ideal customer’s wife subscribes to Cowboys & Indians while he reads Western Horseman. I’d do that for a few reasons:

  1. It’s more of a design challenge (fun) with differing style lines.
  2. This customer is pickier than you’d ever imagine; cowboys with horsies aren’t hicks and they aren’t poor. They like to look nice; they have creases pressed in their dress jeans.
  3. As a group, they are more fit which makes profiling a fitting target much less dicey (read: less costly).
  4. It’s easier to get into wholesale. Since most western wear outlets are owned by individuals with strong ties to their communities, you can still approach a buyer or store owner with samples to gauge interest and possibly carry the line.
  5. It’s easier to find a rep, it’s a smaller market and everyone knows everyone. There aren’t a lot of market shows so one can stand out more in the few there are.
  6. There’s a hole in the market and has been for several years now. Why that is, is a long story. What happened is that others stepped in to fill the gap but not having to work so hard, got a bit complacent. I think that end of the business is long overdue for new blood to shake things up.

This doesn’t mean people should stampede into this or any other segment just to get their foot in the door, thinking it will give them a leg up until they can go on to whatever else it is that they really plan to do. Those of you who’ve been around already know that you start out doing one thing and end up doing something else. It’s no different from life itself. How many of you are doing exactly what you planned when you were a kid? I rest my case. Speaking of, that’s why it’s stupid to blow a lot of money on branding, IP, and all that before you have a product and initial sales interest. It’s also another reason your label shouldn’t be your company name. Your company name should be XYZ Enterprises, not Cochina Couture. Each label is a separate division with a separate identity; it makes it easier to sell them off if you decide to do that later on. However, based on past experience, a lot of new people spend money on logos, reserving urls (not a bad idea actually), business cards, designing hang tags, labels, trademarks and intellectual property right off the bat. $10,000 is a typical figure people have told me they spent. So here’s the beginning of our running cost tally:
Me: $20 -for urls
You: $10,000

The next step to building my future empire is so humble and boring that a beginner will completely miss the nuance of its significance and that is to find some fabric sources. I’m not going to drive myself crazy designing and then looking for a fabric that may not exist, is out of season, or for which there is limited or no continuity. Right there, I’ve avoided a production nightmare four months out because I’m not going to be caught not being able to make deliveries because my fabric source dried up. I also won’t be forced to make a last minute substitution on a fabric I don’t have time to test that may fail, burn my buyers with customer returns, and killing my business right out of the chute.

Once I have a range of fabric choices, I’ll determine a few options that fit my budget and will work with what I have in mind. Then I’ll order five to ten yards of each, confirm the continuity of goods, get order cut off dates for production yardage and file this information in my production management program StyleFile. At this point, my costs amount to my time and the cost of yardage. Let’s call it 10 different piece goods at five yards each at an average of $7.50 per yard or $375. Based on my experience though, most start ups will spend at least ten times that because they would have started on another tangent and have to come back to this after they’d blown money on patterns that will need to be redone. Believe me, saying only ten times more is erring very very generously in your favor!
Tally so far:
Me: $395
You: $13,750+

Before I can design stuff, I have to examine the fabrics to make a determination of their suitability and performance. I might decide I don’t like some of the stuff that comes in or that my customer won’t. I might not like it if it’s difficult to handle and sew, if it frays too easily, shrinks too much during pressing or it comes back from the dry cleaners looking like a hot mess. Speaking of, that’s the second thing you do -test your fabrics. However, since this is yet another boring thing most people won’t pay any attention to, my costs of eliminating the potential loss of fabrics amount to $10 a piece for dry cleaning and steaming ($100). Your costs if you don’t test can run into the thousands of dollars because you’d need to have your patterns remade for other fabrics if the goods fail to perform as you hoped. Taking a wild stab in the dark, let us say your cost is only fifty times what I’d pay. Here’s the running total so far:
Me: $495
You: $18,750

By the way, ask anyone who has been around, even by increasing your costs by a factor of ten to fifty, I’m being very generous and erring in your favor. If you have patterns made for fabrics you haven’t tested and then the garment is then processed and it shrinks like all get out or it completely changes the hang or the drape of it, your patterns must be remade. These days for a man’s sportcoat, including fitting and prototyping, you’re looking at development costs of <$1,000 each. Multiply that by two, only the first half went right into the trash. And that’s assuming you didn’t cut it all already, can’t buy more fabric, miss your contractor’s delivery date and of course, the date by which you told your customers you’d ship. Not to get all naggy on you or anything but my book has all this in there. It explains how to test your fabrics well before it represents a crisis. Such as in how to measure them etc.

Continuing on, the next step is to draw design sketches that are suitable for each fabric. Sounds easy, right? Maybe not. Just because you can draw something doesn’t mean it can be manufactured. This is good and bad. Bad because you don’t get what you want. Good because we’d have any number of scary hairy monsters running around, and unicorns and time machines would be ubiquitous. Seriously, if sketching isn’t your thing, you’ll have to hire someone to clean up your sketches. You need a technical illustrator, not your girlfriend or next door neighbor trying to break into fine art. On second thought, their sketches might be fine if they sew well. You need sketches that convey the technical attributes of garments and construction clearly so you can get a quote from a pattern maker. If you don’t, well, it’s just more delay, cost and hassle. Let’s tally up costs, again mine will be different. I can do my own but I will do it under duress because I detest it.
Me: $495 +beer and a lot of naughty words I’d never say around my mom.
You: $18,750 and …..

I don’t know what it will cost you if you don’t do sketches nor how much it will cost if you do. If you don’t do them, people just might get so frustrated with you that nobody will take the job so you’re in the hole by nearly $20,000. If you have a clear idea with photos (do see the technical illustrator link above), it might only cost $50 per sketch. You could also try doing it yourself. A lot of people do that but then they run into the problem of the sketches being not manufacture-able. A colleague of mine complained recently that they spend hours going over even prettily done Illustrator CAD sketches and they just can’t do it anymore. For the sake of moving on, let’s pretend your sketches are free.

Now you need to hire a pattern maker. Or, you can hire a package service (pt.2). I’ve written quite a bit about the varying costs of each option. If you’re short on cash, managing it yourself is the way to go. If you do that, your costs for prototyping a sportcoat to include pattern cutting and sewing a sample is about $1,000 each but you can certainly pay more, much more. For example, I know a pattern maker in NY/NJ who was charging $800 for a baby bloomer pattern (should cost $100 max) several years ago, I’m sure her prices have increased -but she’s just the nicest lady ever. She’ll send you nicely packaged Christian gifts, candles her mother made after you call her for a quote. You know you can trust her because there are bible verses all over her website. My point is, not knowing how to hire a pattern maker can cost you plenty, no matter how nice they are.

If you decide to take the cognitive shortcut of using a package service, the costs are going to be an order of magnitude higher. If you’re short on cash, doing it yourself is the best way. For the sake of simplicity, let’s assume you hire a good patternmaker who charges commensurate to industry standards (in other words, not like that lady in NJ/NY). Furthermore, you decide to proceed with 7 styles. My cost of pattern making will be “free” in a manner of speaking since that’s what I do. As a practical matter, it’s not because I have opportunity costs. If I’m working for me, I can’t pay my salary and overhead that I’d be earning with client’s projects. Alternatively, I can work nights and weekends and not have much of a family life -which is pretty much the story of your life by this time, correct? To be fair, let’s calculate my costs as half what yours would be, namely $500 per pattern and sample. Here’s our tally thus far:
Me: $495 + ($500 x 7) = $3,995
You: $18,750 + ($1,000 x 7) = $25,750

At this point it strikes me as tortuous to continue this line of inquiry because the situation won’t be improving any. You know the easiest way to save yourself a whole lot of money? It’s to read my book and do what it says. I can tell you with a high degree of confidence that I could get 50 units of each of those seven styles cut and sewn for about what you’ve spent so far. [amended 2/4/12: my cost is closer to $18,850 for fabric, cutting, sewing and finishing of 350 jackets.]

Sure there are key differences between you and me. I obviously know people you don’t and you probably know people I don’t. For example, I don’t know any powerful buyers like many of you say you do but I don’t need to. Not right now. However, I do know how to go about finding one when it’s time and I’m not going to worry about it until then.

The good news is you have the opportunity to know the very same people I do. The bad news is, nobody is going to hook you up just because you ask. However, like you, no one is going to give me a name either until I’ve proven I’m ready to take that step because everything is done by referral. My being ready in this case amounts to having samples ready and being sufficiently knowledgeable to start a wholesale relationship with buyers to include having production and fulfillment lined up. Once I have all that, I will ask for referrals in our member’s forum. And you know what? People will respond.

Whether you believe it or not, you have the opportunity to know the very same people I do, there’s no coincidence, luck or serendipity to it. If you prefer to decide to continue to hope you’ll meet the right person in an elevator versus moving decisively forward, that’s your choice. Becoming successful is not luck, it’s choice -and choice requires a decision.

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