Julie wants to start a fashion business with no money. Evan Carmichael says banks won't lend to newcomers without a track record, so bootstrap instead: make one prototype, pitch boutiques for orders, and work at an established fashion company to earn income and learn the business while building contacts on the side.
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Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. In today's video, I'm going to answer a question from one of my newsletter readers, Julie, who is a fashion design student, wants to start her own business in the fashion industry, and doesn't have money to get started, so wanted my advice if she should go to the banks or how she should get the capital to start her business. So Julie, thank you for writing in. First of all, with the banks, usually what they're gonna look at is your personal credit. So it's a new business, ideally for a business loan they wanna see that you've been in business for 3 years or more, have some kind of track record before they'll give you money on your business. So that means everything that you get from the bank is gonna be personally liable. So if you can't pay it, they're gonna come after your house, your car, whatever assets you have. And it's really dependent on how good a credit score you have. So if you have really good credit, then it's easy to get money from the bank. And if you don't have great credit, then you're not going to be able to get money from the bank. For you though, I think the best thing you can do when you're starting up a new business is not start paying money. Don't start spending money until you're making money. So it's not about how much resources you have, it's about how resourceful you are. So go out there and try to make sales before you're starting to spend money on your business. So you can design potential clothes ideas that you have. You can go out and maybe even make one prototype if you absolutely you absolutely have to, and try to get people to buy on the sample and the prototype. Go to retailers, you know, maybe boutique retailers where you can actually talk to the owner, see if they like the idea, and try to get orders just off of your sketch and your design before going out and spending a lot of money creating your clothes. That way it gets you closer to your customer, you have a cash flow source coming in, and you're much more likely to succeed. If you find that you don't really know enough about the business yet and you really want to make sure you have a stable income while you're building your business, The thing you can do is go work for a company that you respect. So, you know, going to get a job isn't the end of the world as long as you can learn from it. So go find a company who you want to be like. So a small fashion design house where you can go and learn the ropes of the business. You can start your business on the side, be making money from your job, and make some important industry contacts to help you when you do grow your business. And you learn as much as you can about the actual business itself by working in that type of company. So don't get a job just to make money. Get a job to actually learn something that will help you eventually grow your business. So I wouldn't count on the banks. In summary, I wouldn't count on the banks as a good source unless you have really good personal credit. I try to bootstrap my business from the start. So go out and try to make some sales, talk to customers, talk to potential retailers and boutique shops and get them to make a purchase decision based off your sketch or maybe a sample. And if you really need cash to kind of get started, then try to find a job with somebody who you respect in your industry that you can learn a lot from before you start your business and then start your business on the side. So hopefully that helps, Julie. If you guys liked the video, please give it a thumbs Thumbs up below. It's what makes me want to keep making more of these videos for you guys. And if you have other thoughts for Julia as well, feel free to leave a comment under the video. I love seeing those come in, and we'll see you on the next episode.
