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9 6 THE FASHION DESIGN REFERENCE + SPECIFICATION BOOK
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Chapter 9: Budget, Time, and Money
A budget is a communication tool that makes it possible to translate creative
ideas into numbers. Numbers are the language of business. Investors and
lenders are more apt to take any idea seriously if it is viable when evaluated
in nancial terms and if it can be built into a strategic timeline. Budgets allow
the fashion designer to estimate costs and predict pro ts. To make the most
of a budget, a designer must be an educated consumer and will want to get
multiple quotes on services and products to compare the value and impact
that these transactions will have. Simple math will calculate the pluses and mi-
nuses when expenses are compared with revenue. Many services and software
programs are available to help the designer keep up with the management of
dollars and cents, not to mention hours and minutes. In essence, these tools
are about formatting tables or keeping ledgers into which data can be plugged
and be accounted for. As the process progresses, designers should regularly
revisit their budget to be sure they are meeting their bottom line.
TIME
Time plays into a budget as much as, if not more than, money does because well-estab-
lished deadlines are designed to coordinate with many other systems. Many billing cycles
are structured on a monthly schedule, which makes it a sensible time pattern to emulate.
In planning the long-term ow of operations, a designer wants to start with the end goal
and work backward, determining how pockets of time will be allocated and whether or not
there will be suf cient time to accomplish any given task. Moreover, the amount of time
involved in the production of a garment gures prominently in the equation a designer
would develop to price the product at a level where a pro t can be made without pricing it
out of the game.
COSTS
Breaking down the cost of doing business into line items helps designers review their
data, decide on priorities, and target where they need to edit. The start-up budget must
involve the cost of organization (legal and accounting fees, remodeling costs) and acqui-
sition of capital (tools, machinery, furniture, and signage). Both areas are investments in
the future of the endeavor. An operations budget comprises regularly scheduled expens-
es such as rent or mortgage, payroll (salaries and freelance fees), utilities, maintenance,
of ce supplies, telephone, travel, transportation, insurance, interest, and taxes. A block
of the budget should allow for promotional efforts (advertising), as well as the unexpect-
ed (repairs). Production costs may be grouped under this category to cover the expense
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of raw materials such as fabrics, thread, trims, and notions. Additionally, a combined total of
overhead costs must be applied to the number of units that can be produced within the same
time frame for pricing.
MULTILEVEL STRATEGIES
Part of any spending plan should take into account multiple strategies for the allocation of
both time and money.
Small
Grassroots efforts, including social and professional networking, require a commitment of
each of these resources. Modern political campaigns offer a successful prototype for this sort
of grassroots strategy that is worth imitating.
Medium
Fundamentals such as overhead expenses are more about maintenance, but still gure in the
bigger strategic picture. For without diligent planning and management, the designer’s opera-
tional structure will crumble.
Large
Big-ticket purchases, which might arguably be unnecessary, can be justi ed if they adhere
to a level of excellence associated with the brand’s mission: whether in the form of product,
customer experience, or standard of living.
BUSINESS PLAN
A business plan is a blueprint that includes all pertinent information about an initiative. The
objective of the endeavor is carefully laid out and the rationale behind it is explained. The plan
for putting it all into motion completes the proposal. If designers also de ne the criteria for
the dialogue that will help others make a decision about participation, then they can set the
tone and not be misunderstood.
Although the executive summary will be read rst, it should be written after the rest of the
business plan has been composed. It is meant to highlight the best points of each section
and prompt the reader to continue. The overarching message in the summary should re ect
the company’s mission, its objectives, and the keys to unlocking its success.
Background
A company description should paint a complete picture of the business, including its legal
identity (sole proprietorship, partnership or joint venture, publicly traded corporation, private
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9 8 THE FASHION DESIGN REFERENCE + SPECIFICATION BOOK
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corporation, or LLC [limited liability company]), the history of its development (or intent to
develop), its design workspace and locales, as well as its plan for moving forward.
A detailed description of the product and/or service that a designer is entering into the
marketplace should center on the consumer’s perspective. The designer should address how
sourcing and technology will affect development, and how ful llment will affect the customer.
For consistency’s sake, the language and imagery used for sales should be crafted to comple-
ment the brand. The designer should also speak to how the product might be parlayed into
new ones in the future.
The management team should be identi ed by way of biographies, résumés, and other sup-
porting materials that attest to their merit as part of the endeavor. This information will outline
the hierarchy, pinpoint missing members, and put a human face on the project. Alliances and
partnerships also factor into this area of human resources.
Marketing
A comprehensive market study must be backed up with generous amounts of data detailing
how customers will be engaged and how their needs will be met. Market segments, trends,
and growth patterns must be identi ed. The designer must describe how the project relates to
the industry as a whole and who the other players are in the marketplace. Finally, the distribu-
tion of the merchandise needs to be outlined.
Operations
The business plan also needs to offer a speci c plan of action that describes how the man-
agement team will implement their strategies. The plan must note the team’s responsibilities
and explain how their results will be measured with regard to meeting deadlines and budgets.
This must include how day-to-day sales will be designed, cultivated, executed, and assessed.
Web
An online presence is essential in today’s fashion market. Designers must assess how they
will avail themselves of all the advantages of the medium. A summary of plans for the Web,
including organizational and operational expenses, must be generated. The look of the de-
signer’s website and the function it will serve must be explained: Is it informational only or will
sales be generated through it? The plan must show how the website will be marketed.
Financials
The plan’s nancial analysis does not have to be intimidating or full of jargon. A few common-
sense business concerns can be understood in terms of indicators and ratios that make it
clear how the company plans to break even. Key nancial indicators are pro tability (earnings
and sustained growth), solvency (creditor obligations), liquidity (cash ow), and stability (long-
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term projections). Financial ratios compare current business health w ith past perf ormance,
projected perf ormance, and the results that competitors are show ing. Much of this inf orma-
tion can be condensed into clear visual statements in the f orm of easy-to-read tables and
charts. Designers should let the data speak f or itself , w ith a minimum of ornamentation and
avoiding visuals that muddy comprehension.
SAMPLE DATA CHARTS
A ow chart displays the sequence of events in a particular process and can be used to visual-
ize the steps involved in the launch of a products, marketing, production, or design process.
A pie chart show s how the w hole is divided into parts. In a budget, each segment represents
the percentage of money being allocated to dif f erent areas of a company or project.
Flow Chart
Pie Chart
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A line chart illustrates relationships and comparisons through time. It can be used to analyze
the differences and similarities in sales from one year to another.
A bar chart, also called a histogram, is a way to summarize data, allowing multiple compari-
sons to be made using bars of varying length. It can graphically map out the correlations
between the revenue and expenses of a business.
A cartogram uses a map form to display values by area, with regard to the proportion of
customers, sales, and so forth, in a speci c geographical region.
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Cartogram
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