"You can't fall in love with your own products," agrees Lee. "You have to be willing to cut your losses on some products." After all, the next season is always around the corner and manufacturing takes the largest chunk of any fashion company's budget. Another huge expense is rent. Little inventory means low warehousing costs, says FIT's Simonton.
So What's It Going to Cost?
Creating a fashion brand is not for the faint of heart. Parsons' Demirjian estimates that you'll need at least $50,000 for that first year. And more often than not, the money will come directly from you or from friends and family. Lazarus and Barron raided their personal savings to raise $75,000 to organize Elezar, create the Web site, protect certain intellectual property, produce samples and throw a launch party to introduce the brand to industry insiders like fashion editors.
Juli Lee and her partners raised nearly $1 million from friends and family to turn Julianna Rae from a company that would sell other people's products into a designer of fashionable intimates and sleepwear for women in their 30s to 50s.
Email Lan@thestreet.com if you have a small business idea.
Lan Nguyen
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