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Fashion Business Basics with Isoken: Here’s Why You Really Need a Business Plan As Well as a Working Business Model

Isoken Ogiemwonyi

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IMG_9626Fashion Business Basics is a 6-part series by fashion entrepreneur with Isoken Ogiemwonyi, which will feature on BellaNaija. You may recall BN featured Isoken and her partner in the BN Making It series, back in 2011. Since then, she has gone on to achieve even greater feats, making her mark firmly in the fashion industry in Nigeria. We hope that aspiring fashion entrepreneurs will benefit from this series. Click here to read the first part.

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So you’ve decided where you fit in in the fashion value chain and you’re taking the plunge. What’s next? Most business people will say – a business plan .

This will probably come across as a little controversial but – I don’t believe in business plans.

Don’t get me wrong – business plans  definitely have their place. For example, if you have proof of concept and you’re trying to raise money – debt or equity. A business plan is necessary for articulating your ideas to someone other than yourself – as well as a good referral point in order to track progress at different intervals.

Let me explain.

I’m not saying you should wing it; however, clarity on what you are trying to achieve, being cost conscious/spending on the right things (fashion is notoriously capital intensive, and almost all of the money is spent ahead of launch) and the ability to be agile in a fast-paced marketplace is more easily achievable with a business model. Getting that model right is a task, in and of itself.

As a starting point, I find a full blown business plan to be a monumental waste of time. Here’s my rationale –

Lara is done with fashion school. She’s super excited about starting her fashion label. She has about NGN 1 000 000 in startup capital from working part time and saving, as well as generous donations from family who believe in her dream. Now, conventional wisdom dictates that she start with a business plan delineating her vision, marketing plan, competitor analysis, market analysis, operational plan etc. She spends about three months doing this –  with the help of a highly recommended SME Consultant (this sets her back about NGN 200,000, but she deems it a worthy investment).

She’s finally ready to take the fashion world by storm. She begins producing her first collection, spends about NGN 300 000 producing 25 samples from very high quality fabric, another NGN150 000 on a look book to show her collection and sends it to Bella Naija Style. She puts together a small fashion show to ‘launch’ her collection for 300000. She’s now down to her last NGN 50 000.

She’s not worried; why should she be? She has a rock solid business plan, that shows that this is all necessary expenditure, and as she is trying to be an ‘asoebi’ designer, with a mostly bespoke clientele, once she ‘puts herself out there’ the orders will start to roll in.

She launches … to crickets.

1 week goes by… and another … and another.

She gets by with small ‘asoebi’ orders from her friends and family – but she can’t charge very much as she is using contract tailors and essentially her friends are doing her a ‘favour’ by giving her custom.

A year goes by, and she gives up and gets a 9-5. Fashion is hard. Another young brand – dead in the water.

Conversely, Bolaji has about NGN 200,000 in savings. She knows there’s no margin for error. She writes down her main goals. She wants to be a ready-to-wear designer, stocked in two or three places in Nigeria, with a view to exporting eventually. However, that’s the big picture dream. She starts off running up a few pieces for herself on her home sewing machine in relatively inexpensive fabric, spending about NGN 10,000 on fabric – she’s decided she’ll be her own test case. A few events and Instagram posts later, 2 out of 5 of these ‘test’ pieces garner quite a bit of attention. So she finds a reasonably priced contract tailor to run up these styles in a few sizes and multiple colour ways. This sets her back about a 60,000. She then invests another NGN 40 000 in bags from Printivo and brand labels. she understands it’s important to ‘present’ a certain way. She keeps her marketing focus on Instagram, and gifts a few influencers to get her brand  recognition. She consistently takes part in low-cost, high impact ‘fairs’ and shopping events, tweaking her growing product range. The direct consumer feedback helps her learn what works where and what doesn’t work at all.  Before long, she has tripled her initial investment, without completely depleting her capital base. A year later, she’s grown enough (organically) to fit out a small production studio, averaging 120 units a month and stocking ZAZAII in VI and Grey Velvet Lekki.

These are obviously very extreme scenarios, and is a vast over simplification of the problem(s). Lara could’ve gotten friends or family to help with a plan, and Bolaji could’ve gotten overconfident with her numbers and bombed as well. Most use cases will be somewhere in the middle. My point is – a business plan tends to be static and an over reliance on it and the assumptions therein can be disastrous. A model, however, is more dynamic and will give you the ability to review and compare . It’s also far less likely that you’ll fall in love with your idea to the exclusion of evidence to the contrary.

I am by no means saying you should be completely planless. This is where a business model comes in. In the latter scenario, simple vision statements and investing in key know it’s a cliche but you have to start small, or as the tech community puts it – start lean.

There’s no fool-proof way to start, but investing in the right things, and understanding that a fancy powerpoint  and empty rhetoric does not a business make – goes a long way.

*PS: note that these startup cases did not take into account the more globally recognised route to market of going through a manufacturer, taking wholesale orders, drop shipping etc, simply because I am writing about the Nigerian experience. Not that these do not exist at all, they are simply not the norm.

Isoken is Editor at Large of BellaNaija Style and runs Editorial Business & Strategy at BNStyle. She is also the founder of the award-winning company behind fashion, beauty and lifestyle multi brand store ZAZAII. She has been in the business of fashion since 2009 and is passionate about fashion, communications, native content and growing the fashion industry in Nigeria . She writes The Fashion Business Series to deliver actionable insight for brands in the fashion and creative sectors and blogs about personal style at A Million Pinks. Follow her on Instagram @theobsidianway @amillionpinks @experiencezazaii BellaNaija Beauty: @bellanaijabeauty BellaNaija Style: @bellanaijastyle BellaNaija Living@bellanaijaliving

9 Comments

  1. Bolaji

    July 12, 2016 at 2:02 pm

    Love the message, simplicity in its delivery and how its chick full of knowledge! Bring on part 3!!!

  2. Xxxx

    July 12, 2016 at 2:35 pm

    I absolutely love this! I am not in the fashion industry but I can relate both scenarios to my industry. I was going to do things the very big way but I realized I should start small. I am bookmarking this to always serve as a reminder and not lose focus. Thanks Isoken

  3. @edDREAMZ

    July 12, 2016 at 2:49 pm

    a.k.a EDWIN CHINEDU AZUBUKO said…
    .
    Oky seen….
    .
    .
    ***CURRENTLY IN JUPITER***

  4. Great advice

    July 12, 2016 at 4:11 pm

    Well written and points clearly illustrated

  5. Kay

    July 12, 2016 at 6:44 pm

    Thanks, Isoken! Needed a nimble template to work with and I’ve found basic OGSM tools and business model templates (Cleverism has been especially helpful in helping me identify and track important metrics: cleverism.com/business-model-canvas-complete-guide/) to be invaluable resources. In my case, I may still develop a business and/or strategic plan (for communication and finance, for instance), but that will come once I’ve taken that all-important first leap. If you’re a procrastinator (like I used to be :-)), the fewer pages you have to work through at the beginning, the better for you.

  6. lacey

    July 12, 2016 at 6:55 pm

    Excellent piece! It is even the Chocolate beauty that caught my eyes! I wonder when I see women taking pills to lighten their skin! I am naturally light,but men! the Summer Sun in this America nor be here o! Right now I am brown,like golden brown,but in the winter I will get light again!funny enough I love the tanning of my skin! I still wonder how and why Nigerian Ladies bleach their skin!

  7. Tincan

    July 12, 2016 at 11:50 pm

    Neat article. Reminds me much of Arese’s articles – beautifully illustrated. And this pic, you and Arese could pass for twins ?

  8. Ada

    July 13, 2016 at 1:56 pm

    What happened to L’Espace?

  9. Nnaya

    July 20, 2016 at 5:16 pm

    This give a fresh perspective on the pros and cons of having a business plan. And hitting us with the suggestion to draft a business model from the start? Excellent idea!

    How can one go about creating a business model?

    Thanks for sharing, Isoken and BN!

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