As a retailer or an up-and-coming designer, fashion is ingrained in your heart and soul. The tech climate of the industry makes it easy to set up an online store and begin selling your merchandise with little business background. Despite this, it is also important to be business savvy about your designs and products.
Most fashion entrepreneurs start out as sole traders. As a result many successful designers share the same background story: creating designs or products, and running their business from their home studios. Experiencing growth and success is the goal of everyone who is just starting out. But when that growth arrives, you have to be sure that your business strategy is able to grow with it. This means incorporating your business. It is something you should consider from the early stages, when your business is just starting.
What Incorporation Gives You
Incorporating your fashion business as a Limited Company has many advantages. It establishes your business as an entity that you are not personally liable for financially. In the event that your business fails, your personal assets will not be at stake. If you are running your fashion business as a sole trader, you are liable for any financial hardships your business encounters. Incorporation does not have to be a difficult step to take either. Using a service like LegalZoom will help you take the next step with your fashion start up business, and make it a legitimate business entity.
Why Not Incorporate?
There are very few downsides to incorporating your business, especially when compared to the benefits of it. Incorporating does cost money, but it will save you from the potential of personal financial responsibility if your business does fail. In order to become incorporated, a certain amount to paperwork will be required. This is the reality that every type of entrepreneur faces when they are starting up their business. Incorporation will also require you to process your personal taxes and your business taxes separately, which can be a bit of a hassle.
Being business savvy and becoming incorporated is essential if you hope to succeed with your fashion business. It does not matter if you are re-selling vintage thrift store finds, or designing high-fashion products – a business at any level will benefit from incorporation. If your business reaches commercial success, it will be a step you will have to take eventually. Incorporating from an early stage will provide you with the ability to take on investors and raise capital that will help you grow and succeed. Doing so early on shows that you have confidence in your fashion business’ success.
The fashion industry is highly competitive. You want to be sure that you be personally protected in the event that your fashion business loses money or if someone infringes your unique brand. Even though it is a highly innovative industry comprised of many creative types, it is also essential to have the business know-how to protect your work. Make sure you are protected from legal liability by incorporating your fashion business from an early stage.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.