How much do we know?

1. Topics covered:Business practices of Australian Fashion businessesBusiness considerations for manufacturing and selling off shoreRole of designerCosting garments – practical example would be great!!

2. How much do we know? • How experienced are you at designing and making garments? • How much business experience to you have? • How much financial planning have you done? • What is the definition of business practice?

3. Definition of business practice • A method, procedure, process, or ruleemployed or followed by a company in the pursuit of its objectives. Business practice may also refer to these collectively.Read more: http://www.businessdictionary.com/definition/business-practice.html#ixzz23HFsMoXa

4. The fashion business • The world of fashion is changing • The Fashion industry is a particularly complex and in depth industry • Business are more concerned now than ever before on the bottom line. • Good business practices www.fashionnetwork.com.au

5. Business practices of Australian Fashion businesses Business considerations for manufacturing off shore • Finance • Marketing • Design product • Supply chain • Legal & compliance • Planning • Supply chain • Lead time • Time lines • cost

6. Finance • Will a business that addresses social or/and environmental issues still be profitable? • A business that survives the hard times will fly to new heights in the good times. • Fail to plan, Plan to Fail • What is a Business Plan?

7. Business Plan will include • Executive Summary • Intention • Business overview and services provided • Management Data • Services and marketing strategy • Marketing strategy • SWOT analysis • Legal and risk management plan • Operating plan • Finance plan • Action Plan

8. Bank or investor • There are 2 main areas of finance – loans or investment • Grants for sustainability could be available • What do banks look for? • What do investors look for?

9. Banks look for • Business plan • Cash flow • Profit target • What assets will be required • Amount of loan • How funds will be used • Paying funds back

10. Investors look for • Business plan • Funds required in the short-term • How the funds will be used for growth in the short and long term • Estimated return on investment • % of shares allocated • Financial reporting

11. Products and services • Fashion is a business • Matching your skills to a target market • Who is your target market? Write down a summary of who your target market is and why you think that matches your own ability as a designer.

12. How to find your target market • What type of person are they aimed at? • Is that person male or female? • How old is that person? • What size range are they looking for? • How much do they want to spend on clothes? • Are they looking for high fashion or a favorite classic style?

13. Find your strength • When starting out you may find yourself with a board target market • Find your strengths and fine tune until you have a strong product with consumer appeal. • Sustainable products and raw materials how then can work for you. • Try to engage wherever possible

14. marketing • One of the most important ways to announce your arrival into the fashion industry is to get noticed, if you have famous friends use them otherwise here are some marketing tips: • Brand image be consistent • Tell a story (sustainability is a story as well as quality, unique style) • Website • Social media • Networking • Media • photography

15. Customer analysis Understanding who your customer is - this is the first and most important element of marketing a brand successfully. Look at what your brands statement is and the message you want to relay. • Is it value for money • Fashion forward innovation • High end, Exclusive • Mass market • Sustainability in fabrics, Activity: who is your customer? What is your statement? Once you understand your customer you can start thinking about the competition.

16. Competitive analysis Analysing the competition and how your product fits into the existing market is another key element of creating a successful business. Some of the questions you should ask yourself are: • What products and companies will compete with you? • Will they compete with you across the board, or just for certain products, certain customers, or in certain locations? • How will your products or services be better than those offered by the competition?

17. Supply chain Definition: • Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). • Supply Chain Management spans all movement and storage of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption (supply chain). • Optimizing supply chain efficiency should be every companies focal point, it is unrealistic to expect consumers to absorb the rising cost of doing business in the apparel industry.

18. supply chain www.fashionnetwork.com.au

19. Legal & compliance Financial management appears to be something that many small business operators love to hate, but without it no business lasts long Effective planning is a vital tool in the armoury of any small business operator and often defines the boundary between success and failure in any business. Financial planning is one part of the overall business planning that must go on but it is a vital component as the money is a major part of what keeps things moving and growing. Some areas to look into are: • Fair work act – pay rates • Anti discrimination laws • Safety (WHS) • Australian standards - compliance requirement • Tax – Bas • Business name • Sole trader, partnership or company

20. Business considerations for manufacturing overseas • Planning in production is the most important element of the business • Sourcing markers • Product planning • Ethical manufacturing • Time lines • Cost

21. Sourcing makers Sourcing is the method for obtaining raw materials, products or services. Sourcing manufactures: • In-house production • Contract production (*outworkers / homeworkers) • Outsourced Local Production – Cut, Make & Trim (CMT) • Offshore Production (CMT) Sources like; China, Vietnam, Cambodia, Pakistan, India, Bangladesh, Sir Lanka & Indonesia. Emerging new sourcing destinations are North Africa (Egypt, Jordan, Tunisia) and West Africa (Cameroon, Gambia and Ghana) Type of Manufacturer required: • Contacts / union /TFIA / Ethical Clothing • Visit factories • Set up appointment • Brands they manufacture – target market • What type of manufacturing – lingerie & sleepwear • Inhouse quality control • View process • Lead time – on average • Quality of garments – view samples • Quote from design kit • Contract • What other services do they offer * Mandatory code of Practice for Outworkers in the Clothing Industry. www.fashionnetwork.com.au

22. Production sourcingCut make & trim (CMT) companies Manufacturing is a combination of local & offshore production methods. • Depending on quantity, cost & quality some designers use a combination of production sources • In-house • Contract • CMT local • CMT offshore • CMT companies can do all the manufacturing of receiving raw materials, patterns, samples, size sets, quality approval, cut, make, sew, finish, pack and shipping. • Negotiate cost, lead time, quantity & quality Australia over the last 10 years has proved to be innovative in design and continue to gain recognition in the international arena. As we emerge from the global economic crisis there is a new playing field with new rules. Optimizing the supply chain efficiency and sourcing manufactures that can provide on cost, quality and on time delivery are where designers need to focus. www.fashionnetwork.com.au

23. Ethical clothing Ethical Clothing Australia provides textile, clothing and footwear businesses with practical resources to guarantee compliance with relevant laws and regulations in Australia manufacturing and offers a method to communicate this to consumers and buyers • Source of ethical manufacturers • Source of business information • Source of business networking • Newsletter – updated information • Fair pay and working conditions in the supply chain Accredited brands • Cue • Collette Dinnigan • Ginger & Smart • Jets • Lisa Ho • Otto & Spike Why consider this; According to market strategists Medium Group, the market for healthy and sustainable products will be worth $27 billion by 2011. Accreditation with Ethical Clothing Australia can help businesses tap into this market. www.fashionnetwork.com.au

24. Planning • Planning is fundamental for every brand that want longevity in the apparel industry • Many companies employ dedicated planners to ensure a well considered, organised and managed path for delivery within budget, to the required quality and on time Essential tools for Production Planning: • Critical Path • Season Plan • Design time line • Production time line www.fashionnetwork.com.au

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26. Season planning www.fashionnetwork.com.au

27. Design time line Reliability of quality of all products and delivery on time is absolutely essentials in the retail market, retailers usually retain the right to cancel any product that is late, faulty fit or faulty in finish. What to include: • Vendor • Style # • Draft PO to book capacity and space • Sample PO to hold cost price • Bulk PO • Price confirmed • X factory date confirmed • Freight method • To store • comments www.fashionnetwork.com.au

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29. Production time line Critical Path (timeline) will enable you to manage your business and have bulk production into store on time, within budget and quality assured. What to include: • Everything on the design timeline • Approved sourced materials • Lab dips & raw materials approved • Fit 1 approval • Fit 2 approval • Fit 3 approval • Finial Fit approval • Photo samples • Sales samples • Size set 1 approval • Size set 2 approval • Labelling, packaging approval • Mandatory testing • Bulk sample approval • Bulk sample delivered into factory • Production start • Post production approval • X factory • Into store date www.fashionnetwork.com.au

30. See excel sheet Mock Production Timeline Detailed next week www.fashionnetwork.com.au

31. Costing process • Season Planner – feasibility study or quick costing • Style/ shape • Usage • Fabric cost • Accessories cost • Labour cost • 25% duty, freight, packaging (fixed cost) • Feasibility study estimated GP% SEE ATTACHED. • Is this a commercial product at the correct RRP? • Design timeline – quotes on costing • Design kit • Based on main fabrics & raw materials • Counter sample approved • Is this price commercial for RRP • What is included • Exchange rate evaluate • Is there room to negotiate • Production timeline – confirmed costing • Based on approval of counter sample • Approved main fabric & raw materials • Quantities per style / colour • Bulk PO placed • Contract or Purchase order raised • Quantity is confirmed • Lead Time is confirmed • Raw materials WIP is confirmed Always check finial shipping documents to confirm correct priced used. www.fashionnetwork.com.au

32. Costing we will talk about in more depth next week.

33. Questions www.fashionnetwork.com.au