Who founded the fashion label Five Four
Found a fashion label and become a fashion designer
1. The fashion market: a competitive field
For many creative people, founding their own fashion label is a way to realize themselves and let off steam as a fashion designer. The challenge is to position oneself optimally against the globally active top dogs such as H&M, Zara or Zalando, who offer a variety of products. A new chain with inexpensive fashion will find it difficult to assert itself in the market, while niches still offer attractive freedom. This is proven by numerous small brands that occupy a wide variety of niches. Success depends entirely on how you position your own fashion label.
Label vs. fashion designer vs. t-shirt label
There is a difference between a fashion label and a freelance fashion designer. The fashion designer does not have to design for his own label, but works as a freelancer and creates designs on behalf of other brands.
The T-shirt label is a special form between your own label that produces clothing itself and a freelance fashion designer. Often only prints and motifs are designed here that are ordered via the online shop and printed on T-shirts. The designer only supplies the motif and uploads it to the relevant platform (e.g. Spreadshirt). The product chosen by the customer is printed and sent directly by Spreadshirt.
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2. The founder as the heart of the fashion label
Setting up a business in the fashion market even without training
With a good business idea, you set up your own fashion label with sufficient commitment without training, etc. All founders need are entrepreneurial knowledge, creativity, a sense of style and a love of the industry. The following prior knowledge will facilitate your business start-up in the fashion industry:
- Classic vocational training (e.g. at fashion schools): (Change) tailors, fashion draftsmen, sewers or tailors, milliner, textile production mechanic, textile laboratory assistant, clothing technician, textile product inspector, product developer, fashion designer, model maker
- Degree programs in fashion:Fashion design, textile design, costume design, textile and clothing technology, fashion, trend and brand management, textile business economist, textile management, fashion and design management, design engineer
- Master trades: Dressmaker, bespoke tailor ladies' and / or men's tailoring trade
- Professional experience in the industry: Have you already worked for a fashion label and / or completed further training there (e.g. trainee)? Any professional experience within the fashion industry is beneficial to the self-employment project.
Remember that you have to hire staff, such as fashion draftsmen or tailors, for any activity that you (cannot) do yourself, so that the company can function.
Master's certificate for your label?
You don't need a master craftsman's certificate to start a fashion label. This would only be necessary in the fashion sector if, for example, you opened a tailor's shop. However, a master craftsman's certificate can equip you with know-how in a relevant profession and bring prestige to the label. There is a master craftsman's examination as a clothing master or for the bespoke tailor in the women's and men's tailoring trade.
Bring entrepreneurial qualities
In addition to industry knowledge, general characteristics such as Perseverance and Resilience very important. You can quickly find out whether you have the "founder gene" with our founder check:
To the free start-up check
3. Found a fashion label: What is your concept?
To inspire a coherent business concept for a fashion company, we have put together examples of business ideas in the fashion market.
With the idea of curated shopping, which is still young in Germany, Kisura specializes in women. In an interview with Managing Director Tanja Bogumil, we spoke about the details of the business model as well as opportunities and trends in the online market.
Koffski is an idea from Wiesbaden that focuses on innovative and elegant men's bags for leisure and business matters.
- London Cloth Company
Fabrics and machines are the passion of the Briton Daniel Harris. He studied sewing machine fitter and made theatrical costumes. Today he sells old-fashioned fabrics to fashion labels such as Ralph Lauren and ASOS. He weaves his tweed on traditional looms, which he restores himself.
Marryjim.com is an idea that presents and mediates wedding dresses from designers or private sellers via a new international platform on the Internet.
Modomoto clothes. More precisely, that particular species is dressed here that doesn't like to go shopping, but still wants to look good, the man. A fool who sees no potential here, because curated shopping is booming.
- Fashion master
Modemeister's business ideas also offer the Curated Shopping shopping concept with Modomoto. After a style check, customers can have tailored outfits sent to them by fashion experts.
- Swap in the City
This idea is a highlight for fashion-conscious women, because Swap in the City organizes interactive clothing swap events including wellness treatments.
- Trunk club
The business idea of the Trunk Club combines the idea of the online shop with professional customer and fashion advice. The goal is to make buying clothes more convenient for men.
The start-up competition Weconomy honored UPclaod for its idea of providing online buyers with a digital fashion passport based on a digital analysis of body measurements.
Velostyle produces fashionable, unusual bicycle helmets that consist of interchangeable, individual covers. The Velostyle designers combine safety with aesthetics for the bicycle helmet.
- Vickermann and Stoya
The Vickermann und Stoya business idea is a classic craft business with a shop and workshop in Baden-Baden, where bespoke shoes are made.
In order to survive as a fashion label in the highly competitive market, the concept must be special and have a relevant unique selling point. To find a coherent concept, you have two options:
- You carry out a comprehensive market research and analyze which market gaps there may still be, or
- You already have an idea for a product that the target group doesn't even know they need. An example here is Fair fashion. Before the sustainability movement really got rolling, hardly any consumer knew that they wanted to buy sustainably and fairly produced clothing.
If you want to start a fashion label, your first (and most important) step is to develop a product with a good USP, find a niche and determine the target audience. You can do this by keeping an eye on the competition and trends - even if, for example, you want to commit to a specific style / purpose of your fashion and trends are less relevant for this (e.g. functional or sportswear, basics or vintage clothing).
From the business idea to the business model
With a business model canvas, you develop a viable business model from the idea. The business model outlines the fundamental success factors of the future fashion label and illustrates what money is made of.
We present some of the factors from the business model canvas for a fashion company as an example:
|factor||Example for the fashion label|
|What is the offer?||Fashion made from recycled materials, such as fishing nets from the ocean|
|Who are the target customers and what benefits does the offer offer them?||People with a sense of sustainability who are doing something good for the environment with their purchase instead of consuming new goods|
|How is sales generated?||Selling bags from the nets, on Etsy and on commission in smaller fashion stores|
|Where do I have the products manufactured?||The nets are collected in the Mediterranean and then processed in small-scale production in Germany|
Offer added value
Why do customers choose your fashion of all things? Offer your customers added value - sustainable fashion, for example, conveys a very own statement that is carried over to the customers who then wear your fashion. Many designers sponsor charitable projects, employ socially disadvantaged employees to manufacture the pieces, or use sustainably produced and fairly traded or recycled materials. This gives the garments added value that buyers are happy to support.
The own brand identity is linked to the added value: this is reflected in all products and helps the customer to recognize the brand immediately. A brand identity can, for example, stand out through a certain color palette, through a logo placement always in the same place on the product or a distinctive external appearance.
Some fashion brands that have implemented the "added value" theme perfectly:
|Otherwise Veganknit||Headbands and hairbands as well as other selected items of clothing from our own production. Only organic, vegan and plastic-free materials are used.|
|schmidttakahashi||Upcycling & putting together of donated clothing in the high price segment. Donors are given a code that they can use to keep track of what is made of their old clothes.|
|VEJA||Sustainably produced sneakers in which every single production step is carried out ethically, transparently and with the help of recycling and upcycling.|
4. Business and financial plan for your company
After you have developed your business model, we recommend writing a business plan - even if you only want to start with a small one-person operation. If you are planning to raise capital, potential investors also want to see your business plan first. Fortunately, a business plan can be created quickly these days: with our free business plan software.
It is important that the outline of the business plan corresponds to the established and proven structure. One example is the SWOT analysis chapter: You analyze the strengths, weaknesses, risks and opportunities of your idea. A risk would be, for example, the already existing market saturation in the general fashion market, but opportunities again arise from a trend such as sustainable fashion.
Another important aspect of your business plan is the procurement of the materials and the manufacture of the products. Do you want to import cheaply from the Far East or have it manufactured there? Or are you campaigning for good quality production in Germany? All of this is something to consider and part of your planning. You should also pay special attention to the executive summary.
5. Financing for your fashion label
An important point when founding the fashion label is financing. Do you manage the founding entirely from your own resources or do you have to rely on investors such as banks or subsidies? In the business plan you set out how high the capital requirement is, how much equity you bring with you and how the entire start-up project will pay off. Necessary investments such as sewing machines, storage rooms, fabrics or the pre-financing of the entire collection must be considered so that the capital requirement can be realistically estimated. In some areas, savings can be made - for example through the conception and production in special coworking spaces for designers.
If you cannot finance the start-up from your own resources, there are various options to choose from: funding opportunities, grants and, of course, loans especially for founders.
Alternative financing methods in the fashion sector
Crowdfunding works as a pre-financing instrument when there is not enough capital to produce the clothes in advance.
Factoring is relevant if you give your collection to retail in order to sell it, for example, through dealers with a mixed brand range (e.g. Galeria Kaufhof). Large retail chains take their time paying outstanding bills. With factoring, open invoices are sold and you no longer wait for payment to be received.
6. Legal form and formation formalities
When founding your fashion label, you have to choose the legal form: If you found your own, sole proprietorship is possible. If it is planned to sell the clothing in (own) retail or in the online shop, it is recommended to rely on a limitation of liability as with the UG or the GmbH. For the start-up of smaller teams, a GbR may be sufficient.
The choice of legal form results in different registrations, so in each case a business registration and going to the tax office and IHK / HWK is necessary. Whether the IHK or the HWK are responsible for you also depends on where your focus is - in the manual production of the products or the trade with them. An entry in the commercial register must be made for corporations.
Once you have completed these registrations, fashion labels still need to register with the responsible trade association (BG ETEM). You can also join a professional association, such as Modeverband Deutschland e. V. or the Association of German Fashion and Textile Designers e. V.
The detailed procedure for registration, depending on the selected legal form, can be found here:
Start freelance as a fashion designer
If the focus of the activity is on the design of the garments (job title "fashion design - draft"), you start as a freelancer - i.e. as a (freelance) fashion designer. If you meet the following requirements, you are likely to be classified as a freelancer:
- Qualification as a state-certified designer or
- Completed studies in the field of fashion
- Qualification as an artist must be confirmed by the tax office
- Services are provided by you yourself, creatively and independently
Registering a freelance activity is very straightforward by registering with the tax office. You must also register with the Artists' Social Insurance Fund. Some time ago it was not possible for fashion designers to register with the KSK, as the latter saw the chambers of crafts as responsible. However, if the focus is clearly on drafting designs, this is no longer a problem.
Trademark registration and branding: central for fashion labels
A final important application is the application of a trademark. Protect your company name or that of your label. If you want to protect the distinguishing feature of your products or an entire design, you can also register a registered design.
Well-known brand names for fashion labels include ONLY, Tamaris or, if you look into the high-end price segment, Louis Vuitton. The big brands usually have their designs protected, such as the embroidered crocodile from Lacoste or the small, colorful elephant from the children's shoe brand Elefanten.
Before you start marketing the fashion label, take some time to develop your corporate identity. The logo, the name and the entire external appearance (website, business cards, neck label in clothing, labels) should be absolutely consistent (keyword branding).
In addition, the packaging is becoming more and more important and is being adapted to the branding. Small details such as beautiful wrapping paper, stickers or handwritten greeting cards not only look high-quality, but also make unpacking the goods a pleasure. Many social media users end up taking photos of their purchases.
7. Marketing & Sales
In order to save costs in the initial phase, founders of a fashion label have the option of initially selling their products online, for example via handmade platforms such as Etsy. Products can possibly be given on commission at smaller fashion stores or concept stores - this is an option especially in large cities. In this way, fashion companies also gain visibility offline. If you see the first successes, a popup store might be exciting. You can also start directly with a retail shop - in this case, however, the investments are significantly higher compared to the online shop.
Ideally, you should use online marketing to market your products. Especially when you start with an online shop, it works well when people who see your advertisement can buy the products straight away. Influencer marketing is also particularly suitable for a fashion label. For little money and sending products, influencers present the offer. More and more companies are relying on micro-influencers because the pay is lower, but the credibility is higher. In addition, fashion fairs are a good investment to gain visibility.
In our industry guide you will find all the steps on the way to your own business at a glance.Download now
8. Insurance, accounting & software
Insurance for companies and entrepreneurs is also relevant for a fashion label. The professional association covers quite a bit as accident insurance, but you should still protect yourself, your company and your warehouse adequately from damage. Some insurances are particularly recommended:
You should invest your resources in the successful development of the fashion label, especially in the initial phase. Use software for your accounting right from the start. The bookkeeping is done faster and there is more time for business.
Furthermore, design software is relevant for you if you want to draw the designs for the garments digitally. If you sell your goods online, a shop system is required, and a cash register system for in-store sales.
9. Conclusion: With a special concept to success
The establishment of a fashion label is not only possible for trained and studied fashion designers, but also suitable for career changers. Once a good business idea with a meaningful USP has been found, there are still a few hurdles in the practical start-up (am I a freelancer or trader? IHK or HWK?), But with enough perseverance and perseverance you will soon be running your own fashion label.
The trademark registration is particularly important here - it is essential to protect your company and product name and ideally also the identification mark itself in order to protect yourself from imitators.
You can read all the founding steps and special features again in our cross-industry checklist.
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Frequently asked questions
There are no prerequisites for aspiring fashion designers that have to be met. Career changers can open a fashion company just as well as trained tailors, millers or textile technicians. A good concept can be of great help if you want to set up your own business in the fashion industry, but you can also use market analysis to research gaps in the market that you can then fill.
The costs vary greatly depending on the legal form selected, and are made up of the required employees and necessary investments (e.g. sewing machines, studio rooms, design software, etc.). A cheap start-up with little start-up capital can be achieved with a sole proprietorship, used items and production in your own four walls (at least at the beginning). In this way, founders can first get an idea of whether the activity is suitable for them and whether the idea is viable.
There are many ways and creativity techniques to search for a name. Once a selection has been made, however, an extensive similarity and identity research should first be carried out in terms of brand names. The meaning of the name in other languages should also be checked carefully so that there are no unpleasant surprises later during internationalization.
You protect the company and product names from imitators by registering a trademark. You can protect draft designs and identifiers by registering a design.
Textile manufacturers and other useful contacts can provide you with the IHK / HWK and the relevant industry and professional associations. Industry events are also helpful, because exciting contacts and opportunities can always be found through networking.
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