35 Ways on How to make Fashion Designing Business More Profitable

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How to make Fashion Designing Business More Profitable: When you have the powerful combination of in-demand Fashion Designing skills multiplied by the innovative solutions that give you an edge, you can shape the future.

Our best-in-class professional resourcing and managed services enable organizations to prepare for what’s next.

There are various Ways on How to make Fashion Designing Business More Profitable.

The truth is you can start a fashion design business with little knowledge and still make sales.

That actually works when a few individuals just want to give you a chance to impress them or maybe you’ve got little or no competitors.

How to make Fashion Designing Business More Profitable:BusinessHAB

How to make Fashion Designing Business More Profitable

How to make Fashion Designing Business More Profitable:

However, on the long run when customers start getting exposed to better designs.

And you fail to meet up or deliver what they need.

That’s the beginning of the end for your fashion design business.

Because theyll definitely dump you for someone else.

That’s why you need a very good training on how to sketch your own design and make good clothes.

There are  key areas that can help drive profitability.

These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency.

You can also expand into new market sectors, or develop new products or services.

This guide explains how to assess your business’ profitability, deliver growth for your bottom line, and how to plan and manage change.

How to make Fashion Designing Business More Profitable:

1. Speed up your design cycle.  

One of our business coaching clients, LH Thomson, a manufacture of high end bicycle parts and products.

Cut their design cycle in half by working with a specialty engineering firm outside their company.

This allowed them to develop three times as many products in half the time, increasing their profits over 30 percent.

2. Eliminate tasks and activities that dont add value to the company or customer.

  Every dollar you save by eliminating the cost of things that dont add value to your company.

Or to your customer drops directly to your bottom line.

3. Increase pricing.

If you bill hourly, review your billing rates and push them higher.

If you charge per product, look for ways you can command a higher price.

Could you bungle more value into a package?

Improve your marketing and sales scripting to effectively sell at a higher price?

Or could you just boldly increase your pricing?

Most businesses set their prices when their business was first launched.

And since they were so hungry for business, they set pricing levels low.

Over time, the business likely only made nominal increases to pricing every few years.

But rarely did the owner ever sit down and fundamentally rethink his or her pricing model.

Well take a close look at your pricing now.

How to make Fashion Designing Business More Profitable:

4. Regularly review your administrative and operational staff levels closely.

Most service and administrative departments can be cut by 1 in 4 with no impact on quality of work.

Many can handle 1 in 3 cut with no significant negative impact.

I’m not suggesting you cut staff, instead Im suggesting that you delay hiring admin and operational team as you grow.

Let your revenues grow faster than your hiring.

5. Shorten your sales cycle.

  How can you close your sale faster?

This will decrease your sales cost per transaction and free up a lot of hidden cash flow that previously was locked up in your sales staff.

How to make Fashion Designing Business More Profitable:

6. Increase the value of every purchase transaction with your clients.  

Ask, “How can I get each customer transaction to be for a larger dollar amount?”  What upsells, cross sells, or resale could you strategically implement?  What package offers could you test and introduce?

7. Beware the steep cost of attrition.

 Customer retention is a strategic expense if spent wisely.

How can you increase your customer retention?

8. Feed your winning sales people more leads (even if that means you starve your lower performing sales people of leads.)

  Audit the “$ value per company generated lead given to a sales person.”

This is not a time to be “fair“, but to be strategic.

If every lead you give to John is worth $2,100 and every lead you give to Sarah is worth $3,200.

Then you’ve got to take this into account when you divide leads.

It costs your company $1,100 extra in lost sales for every lead you give to John instead of Sarah.

Be transparent about this and let it be a spark to help John learn how to increase his own dollar value per company lead given to him.

How to make Fashion Designing Business More Profitable:

9. Strategically map out systems to help your customer consume your product or service faster so that they get more value and hence repurchase more frequently.

Look for ways to educate them on the ideal use of your product or service.

10. Shift a cost from a fixed to a variable expense to give yourself greater flexibility. 

This is a way to protect your cash flow.

It is extremely important for unproven tactics and strategies.

For example, pay per sale versus a guaranteed amount for an outside sales person.

How to make Fashion Designing Business More Profitable:

11. Shift a cost from a variable to a fixed where the value is proven.

  Make this shift only when you can negotiate a substantial price savings by doing so.

12. Consistently look for ways to lower your fixed overhead.

Scrutinize your base expenses to eliminate non-strategic expenses that just dont add value to the company or to the customer.

13. Negotiate hard.

Take the time to plan out your negotiation strategically.

Create competition for your dollars.  Create a list of concessions you want, with extras for you to trade off.

Research the market to better understand the best deal you can expect.

Even hire an experienced negotiator to help you make the purchase on the best price and terms you can.

If the asset youre buying for your business is large enough.

The ROI on your negotiation work can be immense.

14. Get clear on all the costs of inventory: cost of capital; storage; insurance; etc.

This will help you make informed stocking levels.

How to make Fashion Designing Business More Profitable:

15. Set optimal inventory levels and stick to them. 

Constantly be on the lookout for ways to safely reduce your inventory levels.

If you have inventory youre unlikely to sell, scrap or donate it so that you can free up the space and write off the inventory.

16. Manage your costs

Close management of your costs can drive your profitability.

Most businesses can find some wastage to reduce.

It’s important not to cut costs at the expense of the quality of your products and services.

How to make Fashion Designing Business More Profitable:

17. Have you looked at your key cost areas?

Your key cost areas to consider are:

  • Suppliers – are you getting the best deal from suppliers? Can you negotiate better terms or do you need to change supplier? Can you drive better deals by consolidating your supplier base? Can you buy on a ‘just in time’ basis to make more effective use of your working capital?
  • Finance – do you need to review your finance facilities? – are they at the most competitive terms available? Are you using any loans and overdrafts effectively?
  • Premises – have you examined whether you are getting the most out of your space? Are there more efficient ways to use your premises? Could you sublet some unused space?
  • Production – have you assessed whether you can cut waste and lower the costs of your materials. Check whether you can adapt your production processes so they are more streamlined, using fewer working hours or resources to cut labour costs.

18. Uncover real costs

Using activity-based costing is an effective way to find the real cost of specific business activities.

Activity-based costing shows you how much it costs you to carry out a specific business function by attributing proportions of all your costs – such as salaries, premises or raw materials – to specific activities.

The initial analysis may take a little time but using activity-based costing often shows up costs (and therefore potential efficiencies) that you would not normally uncover using more traditional costing methods.

How to make Fashion Designing Business More Profitable:

19. Review your offer

Look carefully at what you offer, who you sell it to and at what price and see if you can make improvements.

20. Pricing considerations

It’s a good idea to review your pricing regularly.

Changes in your marketplace may mean that you can raise your prices without risking sales.

However, its wise to test any price rises before you make them permanent.

How to make Fashion Designing Business More Profitable:

21. Find your best customers

It’s not just your price list that affects your profitability.

The type of customers youre selling to can also make a big difference.

22. Consider the Pareto principle

Consider the Pareto principle (often known as the 80/20 rule) and how it could apply to your business.

In simple terms, applying the Pareto principle suggests that around 80 per cent of your profit is gained from 20 per cent of your products or services.

The same percentage of profit is often also gained from the same percentage of customers.

Focusing on your most profitable customers.

Even if it means letting the less profitable ones go – could boost your profitability, so long as it is handled carefully.

How to make Fashion Designing Business More Profitable:

23. Can you sell more to your best customers?

You may also be able to sell more to your most profitable customers. Consider the following opportunities:

  • up-selling – selling them premium products that make a greater contribution to your profit
  • cross selling – analysing what they buy and offering complementary products
  • diversifying – identifying a need and developing new products and services to meet them

24. Buy more effectively

One of the most obvious routes to increasing your profitability is to buy more effectively.

It makes sense to review your supplier base regularly.

And see if you can buy the same raw materials more cheaply or efficiently.

However, try to ensure that you maintain quality at the same time.

25. Get the best deal from your suppliers

Identifying your key areas of expenditure will show where you spend most money.

Once you know where your money is going, shop around.

Try bargaining with your suppliers – ask if you can have price reductions or discounts for early payment.

Consider using your status as a valued customer to agree long-term contracts or realistic annual minimum spends with regular suppliers to obtain a better price.

You could also buy as part of a consortium with other similar businesses.

If you can’t strike a better deal, consider switching to other suppliers.

26. Review the number of suppliers you use.

Buying from too many can be inefficient – it takes up more time and dilutes your buying power.

However, avoid placing all your business with one or two suppliers.

It could leave you very vulnerable if things go wrong.

27. Cut waste throughout the business

A review of common areas of waste could help you see how to reduce them, for example:

  • Can you cut your power costs, e.g. is all equipment turned off when its not being used?
  • Are you getting the best deals from your power suppliers?
  • Are you paying for unused services e.g. unused phone lines or photocopiers?

Consider whether youre getting the best from your property.

Your premises are a large expense , so get the most from your investment or rental agreement:

  • Can you use your space more effectively by rearranging it?
  • Could you sublet unused areas?
  • Could you negotiate a lower rental if you agree to a longer contract?

How to make Fashion Designing Business More Profitable:

28. Concentrate your sales efforts

There are two key strategies for boosting profitability through sales.

Selling more to existing profitable customers and finding similar customers to sell to.

29. Work with your best customers

You should know who your best customers are, what they buy and when they buy it.

You can usually put your customers and the products or services they buy into one of four categories:

  • high sales and high profit
  • high sales and low profit
  • low sales and high profit
  • low sales and low profit

It makes sense to encourage customers that provide high sales and high profit.

You can also significantly boost your profitability by nurturing customers that provide high profit on low sales.

If customers are providing low profit from high sales.

You can maybe revise pricing to generate more revenue from them.

If customers are generating both low sales and low profits.

Consider whether its worth your while continuing to do business with them.

How to make Fashion Designing Business More Profitable:

30. Find new ‘best’ customers

Make a judgement on expanding your customer base by finding new customers who have a similar profile to your existing profitable customers.

If you are sure you have covered your existing market as much as you can, consider moving into new markets.

31. Expand your market

Moving into new market areas can transform a business and, handled correctly, can significantly increase your profitability. However, expanding into new markets can be risky – and mistakes can prove very expensive.

32. Do your research

Before you start, carefully research the potential opportunity.

Can you tailor or adapt existing products or services for new markets?

This can provide new revenue at minimal cost and is ideal for boosting profit.

For example, if you manufacture tools for the garden market, are there any potential applications for the tools in the construction industry?

Do you understand who your potential new customers are, why, when.

And how they will buy the product or service and how much they will pay for it?

You can also use social media to do research and gain alternative insights, opinions and feedback from your customers.

How to make Fashion Designing Business More Profitable:

33. Developing new products and services

If you’re developing a new product or service for a new market, its good to carefully consider its viability. Key questions include:

  • Do you have the skills and expertise in-house or will you have to buy them in?
  • Have you got the commitment and resources available to make the new project work?
  • Can you minimise the risk?
  • Can you be sure theres a demand for the new product or service at a price you can make a profit on?

34. Team up and reduce the risk

Rather than going it alone, partnerships and joint ventures.

Can provide you with increased security in establishing yourself successfully in a new or expanded market.

35. Boost productivity

All businesses can minimize wastage costs and still remain competitive.

Conclusion

So there you have a quick list of ways to increase your business’s profitability.
How did it work out for Will of Wingspan Optics?
He found fat to cut in his pay-per-click and sponsored products budget, branding consulting he wouldn’t need in 2018, ways to lower his inventory cost, and a strategy to protect his pricing strength in the market.
All of these will likely add $400,000 or more of additional profit to his bottom-line.
Your turn!
Finally, may I suggest that if you want more ideas on growing your business.
Including a free toolkit with video trainings to help you scale your business and get your life back, just click here.

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