In the 10 years I’ve been in the custom hat and apparel business, I can’t remember how many people have called asking for help starting their line of hats. They all thought they had a great idea. Most of them had little or no money. And none of them had any idea what it takes to make it in one of America’s most competitive businesses. The first question these people asked was always “How much does it cost to make my own custom designed hats?” And always, I told them, as gently as I could, there are many other questions that you should ask first, and the cost is perhaps the last of them. I have always given these people my honest opinions while doing my best to cheer them up. This article summarizes all the advice I’ve given over the years. Subsequent articles will address each of the following steps individually in greater detail.
#1: Know your customer
Perhaps the most important thing to do before starting any business! You must answer the following questions regarding your customers:
1. Who could be your customers?
2. How old are they?
3. How many of them are there?
4. Where do they buy?
5. How often do you shop?
6. How much do you usually spend when you buy hats or caps?
7. What is popular with these people right now?
The answers to these questions determine the niche in which to sell your hats, which designs are appropriate, how many of your hats you can sell, and at what price.
#2: Know your competition
The second most important thing to do before starting any business! You must answer the following questions regarding your competition:
1. Who can be your competition?
2. What types of hats and designs are you currently offering?
3. How much do you charge for these products?
4. Where do you sell your hats?
5. How do you market your hats?
The answers to these questions determine what designs you should offer, how much you should charge, which distribution channel to consider, and potential marketing venues to consider when launching your own line of hats.
#3: Know your marketing plan
So what does the best hat design of the decade have if you can’t get your goods out there! Launching a hat line is all about marketing. Let me give you a very simple example. I have a client, a real client whose name I cannot mention. These guys have some great design ideas. So they partnered with a poker player and hired a PR person who is connected to the entertainment industry. These 2 people generated a lot of interest in their products! Before you know it, a couple of celebrities were wearing his designs and the rest is history. So brainstorm, get creative, put your name out there! Who knows? You could be the next ROXY, Quicksilver, or even NIKE!
#4: Know your initial cost
So, you have figured out who your target customers are, who your competitors are, what hat designs you want to launch, and have come up with the most creative marketing campaign. Now is the time to answer a few questions related to costs:
1. Staffing and office rental
2. Costs of the marketing campaign
3. Travel expenses
4. Trade Show Expansions
5. Costs of the production relationship:
(i) How much does it cost to sample your designs?
(ii) Who should you go to for prototype designs?
(iii) Production Run Costs (It largely depends on the number of hats you want to produce for your launch. To get a reasonable price, you need to order at least hundreds per design. 25 hats is NOT a wholesale quantity).
You have a plan to market your line of hats; you know how much it will cost you; now you need to know how to finance your venture. Possible sources of money:
1. Your savings
2. Your friends and family
3. Mortgage your current assets like your home
4. Find outside investors (although this can be difficult to start a line of hats, but you never know)
5. Loan from the bank (SBA loans are available to entrepreneurs in many cases)
#6: Know your release date
In fashion, timing is everything. Are you launching your line of hats for the holiday season? For the back-to-school season? For the 4th of July? Most of the overseas production takes 72-90 days via sea freight. Let’s say you are producing your hats in China. Did you know that the Chinese close for up to 15 days during Chinese New Year, which is celebrated on different dates, but mostly in January and February, depending on the year?
#7: Write your plan
You have collected all the pieces of the puzzle; Writing them down increases your chances of success. Your plan will keep you focused and give you the big picture as well as details to consider. And if you’re trying to get financing, a business plan is not only crucial, but absolutely necessary!
This is a simplified summary of the essential steps you need to take before starting a hat line. So get creative with your designs; be thorough with your research; Be meticulous with your planning. And good luck! Be sure to check out my other articles for specifics on each of the above points. You can also check my websites for additional information.