Mind Your Money: Cashflow Tips for Fashion Designers

360 Creative Innovation Hub
3 min readFeb 3, 2021


The year is still relatively new, and so regardless of what went wrong last year, it is not yet too late to get things into the right order this year, so you can have a truly better experience, and one area in which order is most essential, is the area of cashflow. Your money must be in order.

As with every other business in the world, you may have a limited amount of funding actually coming into your business before, at any given time, this is not totally bad if you are in control of how it is used. Here are some tips to get you on the right track towards a better financial experience in your business.

As a fashion entrepreneur, it’s easy to get caught up in the activities you enjoy (designing your items, for example) and ignore the ones that you want to focus on less (let’s say, for example, putting together that spreadsheet that shows your profits and losses- ugh). In the early days of your startup, you’ll have to take care of many tasks on your own. Do not let those less-desirable tasks get lost in the shuffle! Instead, focus on efficiency. Prioritize the tasks that need to be done most, then get them done quickly and effectively, rather than leaving them for the last minute.

There are always plenty of opportunities to overspend on. You might end up with a supplier that charges far more than necessary for the work you want done or the materials you want to use. You might start marketing, only to discover that you chose the wrong channels. In order to maintain your cash flow and keep your finances in order, make sure you do your research before you start spending — on ANYTHING

As a fashion brand, you may struggle to fully predict how much stock you need for each season. That prediction, however, can make a big difference in your overall cash flow. Managing your inventory effectively can be the difference between a successful launch and a flop–not to mention a number of problems with cash flow. Many entrepreneurs over-stock in their first few years. For a fashion brand, which must keep up with changing trends, excess stock can end up being a waste, which you end up selling off at a loss in order to make way for new items.

Pay attention to your past due invoices. Make sure that invoices go out on time. In those early days, you may let invoicing fall through the cracks, especially if you aren’t sure how to handle collections–and that’s incoming funds that your fashion business needs in order to stay afloat.

Just as you want to manage the funds you have coming in, you also want to keep up with the funds you have going out. When you have payments due, pay them promptly. If they get lost in the shuffle, you can end up owing more than intended as you pay late fees. Worse, you may end up with strained relationships with suppliers and friends. This can make it more difficult to get the items you need in the future. Prioritize paying invoices before they’re due to help ensure that you don’t accidentally miss a payment.

It’s tempting to start pulling funds out as soon as you start generating a profit…BUT DON’T DO IT! As a fashion brand, however, you want to continue to make your mark. Reinvest profits as they start to roll in. You’ll find that by establishing this habit early, you can make it easier to handle your finances in the future.

Financial management is just as important as the creativity and passion that led you to get involved in fashion design in the first place. By carefully managing your cash flow in these early days, you will set your business up for success in a way that will last.

Culled From Startup Fashion Blog



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