Monday, 22 October 2018

Business of Fashion- Raising Capital


Asalaam aleikum guys. Thank you for the comments on my previous post,it truly means a lot when I get to interact with the people who read this blog. Speaking of comments,someone asked about raising capital when starting a business, especially with little money. I'll use my own experience to give the tips.


Personal savings
When I was starting out, I had about 10,000kshs ($100) which I made from a part-time job I did a while back, I did the job back in 2015, but I somehow still had 10k in my account. I used the money to invest in the first ever collection I did, as badly as it did, I made back the 10k, which was honestly shocking to me too. I used that money in december to do the second collection which made me 20k, which I put in the business again and made 30k. Which takes me to my second tip;

Invest the profit you make from the business to generate more capital for your business
Putting back the profit you make into your business will help you create bigger capital for your business. The first few months of business are probably the hardest because you're not selling as much as you would like to but you still need to have that discipline not to spend the little 'profit' that you make because this money will be used as capital to expand your business.

Borrow from family/friends (close)
When I was ready to expand, I required a lot more capital than I was making from my business. This was about 150k. I borrowed 100k from my father, Alhamdulilah that I was fortunate enough to have a parent that I could borrow that amount of money from. But I didn't need this money until after almost 8 months of doing this business on a very small scale. I only expanded when I thought it was very necessary for me to do this. Outsourcing tailors was wasting a lot of my time and even making me lose customers. I decided to rent a space,buy machines and hire people who would exclusively work on my client's orders. This really helped my business in the long run. I personally can only borrow from my parents or siblings because I trust them with my life, the rest can get a bit complicated so be careful not to borrow from the 'wrong' people.

Crowd-funding
I don't have a personal experience with this but it's 2018 and the internet is really a great source of pretty much everything you want. Crowd funds are online capital raising forums. They profile businesses seeking capital and then rely on the online investor network to raise the capital required.  M-changa is the most popular one in Kenya I believe.

Lastly, please start where you are and with what you have no matter how little or insignificant you might think it is. Those are my tips on raising capital for your business, I wish you all the best in your new or growing business ventures. Let me know if this was helpful to you and any other topics that you would like for me to cover. Leave a comment below. Thanks for reading.


11 comments :

  1. Thank you, its a good article for us who want to try fashion business.

    ReplyDelete
    Replies
    1. Thank you for reading and leaving a comment. I wish you well in your business.

      Delete
  2. So I've just visited your"how to write a business plan"post and left a comment asking if I can ask any questions....you have answered it here already so thank you...!!!! I have another question...what are the best agreement methods when you want to hire a tailor/ tailors abd which one worked for you?? Thanks in advance

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