So you want to start a brand but you do not have the money, and so you are debating whether or not you should get a loan?
Let’s explore this further...
What Do You Need The Loan For?
You may say you want it to buy fabrics, trims, manufacture, marketing, branding etc etc. But it this the best approach?
If you have read our previous blog post "The Power Of 1" it explains that you have to start somewhere - usually 1 thing at a time. Maybe you can start with making one garment.
Do You Need A Loan?
Do you have a job? Can you get a job? If so, maybe you can save for making your garment/collection. Saving for your collection may help you get used to budgeting for your business, which is really important.
Where will you get the loan from - Family, friends or bank?
You may think that because the loan will be from a friends or family members that it makes it ok to borrow, but we would say proceed with caution. Why? Because, you still have to pay it back and although you may not be charged interest, you still have to pay it back.
With a loan from the bank you will have to pay interest, usually from the day you borrow and so you have to factor this in. Will you be able to start paying back a loan straightaway?
When Will You Start Earning Money From Your Business?
Do you have a business plan which outlines when you intend to earn money? Do you think that it is important to know this?
We think that it could be a good idea to have a plan as to how you will start paying the money back should you opt for a loan. In our post "Working Backwards" we outline how knowing how much your garments will sell for will enable you to gain an in-depth knowledge as to where your brand will sit and how you can work towards getting there.
To summarise listed above is a brief outline as to decide whether you need a loan or not. Hopefully you now have more information to make the best decision for your business.
Please let us know your thoughts and comment below.