Do you love clothes, but hate the path of destruction the fast fashion industry is leaving on the planet environment and humanity? If so, you may have decided you're ready to create an ethical and sustainable fashion brand.
From learning about market trends to creating the recruitment plan for your clothing line and choosing its legal form - there are many factors to consider before embarking on your entrepreneurial adventure.
In this guide on how to create an ethical and sustainable fashion brand, you'll find everything you need to know about how to kickstart your venture, including tips for how to write a stand-out business plan to attract investors.
Want to see your fashion brand succeed? Then read on...
Before creating an ethical and sustainable fashion brand, do your market research
The very first step in creating an ethical and sustainable fashion brand is carrying out market research to verify, first of all, that there's room on the market for your clothing line and, secondly, how much revenues you can expect.
To do so, you'll need to check up on how the clothing industry is doing.
In particular, look at the evolution of the clothing industry's turnover. Assess whether the increase or decrease in turnover is due to changes in volume (more or fewer clothes being sold) or value (are certain pieces of clothing getting more or less expensive?)
When starting up your ethical and sustainable fashion brand, you'll also want to know:
- Consumer buying habits: who buys what and how often? Online or in-store? What is the typical monthly budget for clothes?
- Current trends: which clothing concepts seem to be the most popular or are likely to blow up?
- Changes in the competitive environment: how are other brands and retailers attracting shoppers and which strategies seem most effective?
Finally, think carefully about who your direct and indirect competitors will be. To do so, you can check out online marketplaces like Ethical Market to identify other businesses offering sustainable, vegan, and ethical products.
It's important to remember that ethical and sustainable fashion is also of increasing interest to giants of the fashion market such as H&M and Selfridges, so don't forget to check out of the market as well.
At the end of your market research you should know:
- Who your typical customer will be (including their age, budget, expectations regarding clothing, and buying habits)
- Who your competitors will be and how to ensure you stand out from them
- The most effective way to market your fashion brand (for example, via an online newsletter, website, or social media)
The ethical and sustainable fashion market
With the fast fashion industry's carbon dioxide emissions expected to rise to nearly 2.8 billion tonnes by 2030, consumers and fashion brands alike are waking up to its detrimental impact on the planet.
What's more, the 2013 Rana Plaza disaster, in which over 1,129 people died after being forced to work in a dilapidated textile factory building (despite warnings from workers of cracks in the ceiling) laid bare the exploitation of the men and women creating the garments for fast fashion brands - leading to a growing demand on the part of consumers for ethically sourced and manufactured products.
The tide is fast turning towards manufacturing clothes in a more ethically conscious way, with fashion giants racing to play their part. In 2020, ASOS introduced 100% recyclable bags, and Prada signed a £43 million deal with a financial services company for a 5-year sustainability loan to improve staff working conditions and rolling out a new range of bags made up wholly of sustainable fabric.
And the demand for cruelty-free fashion is only growing. A 2016 Morgan Stanley Research survey conducted in the UK found that more than half of young consumers find ethical credentials somewhat or very important when choosing retailers.
As well as this, research product information management company inRiver discovered that while 20% of consumers are committed to purchasing only ethical products, as many as 47% said they'd be willing to pay more for sustainable materials.
Not only for these reasons is entering the ethical and sustainable clothing realm being considered a win-win for fashion retailers, but it's also been viewed as an opportunity to be at the cutting edge of fashion, as designers pick unusual materials and adapt pre-loved garments to create innovative designs.
Developing the concept of your ethical and sustainable fashion brand
Next up in our guide on how to create an ethical and sustainable clothing brand is the development of your brand's concept - or the task of re-defining it altogether if you have discovered (through market research) that the concept you had in mind is in sharp decline.
In any case, you will have to define precisely:
- The type and style of clothing you want to make (whether it's sportswear, streetwear, or casual clothes)
- The number of collections per year and how you will design the clothes (will you do it yourself or call in a professional designer?)
- The suppliers you plan to collaborate with for the clothes manufacturing (which fabrics will you use and from where?)
- The type of business you want to create (you'll have to consider the different regulations involved in being able to declare that your business is fair trade and sustainable)
Telling the story behind your ethical and sustainable fashion brand
You must also take the time to consider the additional elements that contribute to your brand identity when creating your ethical and sustainable clothing brand, including the story behind how your clothing line came to be.
Whether it's your true story or one that's totally made up, it's up to you to tell the tale of your brand in such a way that will draw customers in and truly reflect the meaning behind the colours, patterns, and fabrics you use.
Finally, think carefully about your brand name. Letting your imagination run free here is recommended, so long as you ensure it remains consistent with the style of your clothes and your target customer. We also advise that you avoid overly complicated names that are difficult to remember and search for online.
Protecting your ethical and sustainable fashion brand
Once you've decided on your name and logo, it's important to register a trademark to start your clothing line. This will enable you to take legal action against anyone who tries to copy or use your brand without your permission.
The rules concerning copyright and clothing brands are a tad too complex to be fleshed out within this guide, but you can find more information on how to register a trademark on gov.uk and, for those based in the US, copyright.gov.
Choosing the legal form to create an ethical and sustainable fashion brand
Creating a sustainable and ethical fashion brand means, of course, creating of a company that requires an appropriate legal status.
Choosing your clothing line's legal form is a vital step as it will impact:
- How much your business is taxed
- Your taxation at a personal level
- Your responsibility for the company's debts in the event of bankruptcy
The choice will depend on your preferences and personal situation (e.g. the number of partners involved in your venture, the amount of start-up capital at your disposal, etc.).
Several legal forms are possible, so they should all be carefully considered before making your decision.
The equipment and staffing needed to create an ethical and sustainable fashion brand
The next stage in our guide on how to create an ethical and sustainable fashion brand is to look at the staff and equipment required for the smooth running of your business.
Although this step is tedious, it's essential in creating a fair and realistic financial forecast.
The equipment required for an ethical and sustainable fashion brand
Whether you're stocking up on fabrics, sewing equipment, or changing facilities and tills required for a physical store, your equipment needs will, of course, depend on the type of brand you're launching. Your first and perhaps most important consideration is the suppliers you will work with to develop the clothes and what fabrics you'll use - since you can only use sustainable and ethical material.
You'll also have to consider whether to use an independent manufacturer that will make designs exclusively for your brand or join a more general clothing manufacturing network.
This is an important consideration because in the first instance you'll have to buy or rent a premises, equipment and hire staff to make the clothes, while in the second instance you need only pay a fee and the staff in charge of the clothes making according to the hours and complexity of the work required.
If you decide to operate from a physical store, you'll need to, of course, purchase or rent the space itself, as well as display furniture, changing facilities, clothes rails, and a couple of tills. if you opt for selling solely online, your start-up costs will be paying for your site domain and finding a place to store the stock.
The recruitment plan for an ethical and sustainable fashion brand
To build an accurate financial forecast, you'll also need to take your staffing needs into account. This could include hiring anyone from a fashion designer or an in-store stylist to sales staff and a seamstress - who you decide to hire depends wholly on your concept.
Don't forget to list positions that aren't permanent or require occasional freelance work, but that is nevertheless necessary for the launch of your clothing line. This could include a website developer, a photographer to capture your clothes, or a social media expert to boost your presence on Instagram.
Additional services to consider when creating your ethical and sustainable fashion brand
You'll also need to consider several additional services, including a PR agency (if necessary) or the hiring of a chartered accountant for the proper maintenance of your accounts and administrative management tasks to start up your clothing line. You may also need to enlist a cleaning company to help maintain your store or workshop or purchase a premise license so you can play music in-store.
In any case, don't forget to account for these services in your financial forecast. To ensure you estimate these expenses as accurately as possible, get in touch with several professionals and ask them for quotes.
The marketing plan for an ethical and sustainable fashion brand
Launching an ethical and sustainable fashion brand means attracting new customers. They're the key to any successful business launch and you will need to build customer loyalty following a strong marketing plan.
Having a strong website is a key element for any incoming fashion brand. It should showcase the striking aesthetic of your pieces through eye-catching photography, inform site visitors about the quality of each product and, above all, place a spotlight on what makes your brand unique and more desirable than your competitors.
Social media is also a great way to build up a community of those who appreciate your brand, solidifying a base of loyal customers. You can use Instagram to share the best pieces from your line, as well as using the stories and post features to offer interactive advice on how to dress well and advertise discounts.
If you decide to open a physical store, consider handing flyers out to make yourself known amongst local residents.
You might also want to consider collaborating with a well-known sustainability influencer or an online publication famed for its focus on environmental issues to create some hype around your clothing brand's launch.
The business plan for an ethical and sustainable clothing brand
Once you have gathered all the information in the previous sections, you can start writing the business plan for your ethical and sustainable clothing brand.
The business plan is made up of two major components:
- A financial forecast that aims to highlight the potential profitability of the project and the need for initial financing.
- A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
The business plan is the document with which you will try to attract funding from your bank or potential investors, so you need to make it impeccable.
If you are not used to writing business plans, a good solution would be to use online business plan software.
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the accounting aspects for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by clicking here.
Securing funding to create an ethical and sustainable fashion brand
From creating samples to launching your first line, running production, and marketing your clothes, creating your own ethical and sustainable clothing brand requires significant investment.
The good news is, however, you have several financing solutions at your disposal.
First of all, you must estimate the amount of money that you and your potential partners can personally devote to your project. Even if the sum seems very modest in comparison to what you need to raise, it's important that you don't neglect equity contribution. It's highly regarded by institutional investors as they see it as tangible proof of your dedication to the venture.
You can also apply for a professional loan from a bank to finance part of the start-up costs, whether that involves buying sewing machines or kitting out the premises with cool furniture. Remember to submit applications to different banks so that you can compare offers and pick whichever one works best for you.
Crowdfunding is another option. Crowdfunding allows you to collect donations or raise equity from family members or kind strangers who believe in your project.
You can even raise awareness of this initiative by awarding donors with ‘counter-gifts’, including a free t-shirt or a discount on their first purchase.
Finally, also think about state aid for business creators and buyers. This may enable you to benefit from an interest-free loan, for example.
Useful links to create an ethical and sustainable fashion brand
- Good on You, Ethical Fashion Rating
- Ethical Consumer, research on ethical fashion
- Fashion Revolution, fashion activism movement
That's it for this time, we hope this article has helped you better understand how to create an ethical and sustainable fashion brand. If you have any questions related to setting up your business, please don't hesitate to get in touch with our team.
Also on The Business Plan Shop
- Business plan template for a clothing line
- Business plan template for a clothes shop
- How to start up a clothing line
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