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How to Run a Clothing Business in Canada

Making your mark online, campaigns, setting goals, financing options - we’ll cover it all in this article on how to run a clothing business in Canada.

43.6 billion Canadian dollars. That is the market value of the Canadian clothing and footwear industry. Running a business in the clothing industry has multiple opportunities for growth and expansion.

For example, clothing retail sales in the country of Canada were around $35.3 billion in the year 2019, which was a significant rise from $26.5 billion recorded in 2012. So, here is a comprehensive outline on how to successfully run a clothing business

Strategies for Improvement

Establishing an online presence

A strong and responsive website can go a long way, especially in this day and age, when everything has become digitized. There has been a continuous trend towards online shopping spaces, as opposed to physical shops. Thus, having a user-friendly website, where your customers can shop with ease, is important.

Use statistics to define new strategies

According to an article, 46% of Canadian shoppers are more interested in retailers that pledge to lower carbon footprints. In a global industry that produces nearly 1.2 billion tons of carbon emissions annually, greater levels of sustainability are becoming a significant customer concern.

In terms of audience statistics, 37% of online shoppers are ‘Baby Boomers’, followed by Millenials (18%).

These statistics pose opportunities for business owners to target a specific audience, and conceptualize ways to attract new customers.

Start a meaningful marketing campaign

People have now started to become more aware of their surroundings, courtesy of globalization. The changing dynamics have brought about an appeal towards authenticity, as well as relatability.

Create a message that resonates not only with your clothing business, but your customers as well. Championing it through advertising and social media will help you establish a brand name and a loyal customer base.

Understand your industry

Market research in the clothing industry provides business entrepreneurs and owners with valuable insights, which help them make informed and confident decisions. Consequently, this will aid in the evolution and development of your clothing business.

While this sector is known for experiencing consistent growth, the coronavirus pandemic has been challenging to say the least. Being forced to operate online, numerous large, as well as small and medium-sized businesses, turned towards several tools to ensure smooth operations for the foreseeable future.

You can find helpful industry reports, like the free State of Fashion Annual Report from McKinsey. For example, due to people losing jobs at the time of the pandemic, more than the usual number of households are in search of economical clothing. Therefore, clothing businesses have adapted to offering discounts and putting up sales to mitigate the damage to their profit margins.

NPD is another website that offers helpful insights into consumer, retail and trend tracking.

Focusing on Your Assets

Purchasing Equipment

The fact that buyers are now demanding higher values at lower prices, it has become vital to maintain optimum garment efficiency levels. This requires them to have set-ups that increase overall attractiveness in the market by fetching larger orders.

Therefore, you will require thread winding, dyeing, woolen mill, and spinning machines. In Canada, you can acquire all of these brand-new machines for prices ranging from $80 to $110.

Inventory Management

Real-time inventory automation helps with accuracy and saves up on valuable time. This can aid your clothing brand to manage inventory between its physical store, as well as ecommerce platform.

Moreover, it indicates the items that need to be unloaded and those that will be selling well in the near future. For example, the start of fall brings about various discounts in summer and spring clothing, in anticipation of the falling demand for them and rising requirement for warmer clothes.

Maintaining Premises

If you are planning on moving to another brick-and-mortar shop or opening up several, then you need to think about renting premises. The first thing you will need to do is figure out the size of the area you require and the location. The latter will ultimately decide the costs that you will have to incur.

For example, a central location in the city will cost you more rent, as opposed to a location with a specific type or number of customers. In 2019, average leasing fee in Canadian malls was approximately 32.96 Canadian dollars per square feet.

Setting Goals to Grow

Do you want to be a brand name that is sold in H&M or market your brand as a premium one sold in a boutique in Kingsway Mall? This choice can only be made when you identify your goals and plan your direction accordingly.

In order to follow a proper path, you need to create a clothing line business plan. You can start with one product line and decide what you hope to gain from it. This will also include setting a decent price, understanding the needs of the customers, the price they would be willing to pay, as well as the budget you need for the materials without sacrificing its quality.

In addition, these goals are necessary to show potential partners and investors. If they are straightforward, strategic, promising, and thoughtful, people are more likely to want to support your business.

Marketing

In this day and age, where fashion brands are closing up shop and shifting their operations online, the best way to market your clothing business is through social media. It is especially helpful when it comes to promotion, diverting traffic, and improving sales. Here are some strategies that can help your clothing brand expand.

Instagram for call-to-action

Being a visual platform, Instagram uses a photo-first experience, allowing people to post stories and run videos. You can even easily move from Instagram to your website with ease. All you need to do is have customers click on a call-to-action button or swipe up when running an Instagram story.

Facebook’s video ads

You can easily run video ads on Facebook, which have a higher engagement of around 6%, as compared to link, status, and photo posts.

Personalize your marketing tactics

If you are hoping to gain an edge over your competitors, all you need to do is personalize according to the behavior insights of your customers and demographic data. In addition, you can personalize the experience that you provide on your website.

For example, the algorithm used by Amazon allows you to view what other products were bought by people, along with each particular product. This product recommendation is especially perfect in the clothing industry, where suggestions for accessories can be given to complete a look.

Financing

Depending on the kind of clothing business you run, the costs of expanding should not break the bank, especially if you are based online. However, you will still need a certain amount of capital. Here are several options that are most popular in the clothing industry.

  • Banks
  • Angel investors
  • Private finance companies
  • Crowdfunding

In Canada, angel investors and crowdfunding are two ways that are commonly used by SMEs and entrepreneurs.

Employee Training and Benefits

Being a labor-intensive industry, the garment industry requires a trained workforce to help launch a quality product. It is important for you to invest in training programs that impact technical skills required for production, as well as soft skills. The latter includes health, hygiene, self-management, motivation, team, and time management.

The costs of training can be considerable in this industry. However, it depends on the kind of training you are providing. If you are hoping to hire a sales representative for your shop, then communication skills are going to be needed. But, if you are recruiting employees for manufacturing, you will need to give them a lay of the land, as well as training to run the heavy equipment.

Furthermore, the staff can be motivated through training, as well as special offers. These could be in the form of overtime, discounts, or commission.

Devising an Exit Strategy

Deciding to sell a business is not an unusual move and there is no definitive way to exit the industry. However, there are options that can work for you, depending upon your specific situation.

Merge or Be Acquired

In such a case, you align with another company whose goals are similar to yours. Depending upon who you choose to merge with or be acquired by, this could entail flexibility when it comes to the terms of your involvement. One of the best things about this strategy is that it provides the ability to negotiate a business’s price.

There will always be clothing stores for sale, as they pose valuable opportunities for investors and acquirers - especially larger fashion retailers.

Sell Your Stake

You can easily sell off your stake in the business to a partner or other investor. This is a relatively business-as-usual exit strategy, depending upon the person who decides to buy you out.

Liquidate Your Business

As far as exit strategies go, this one in particular is the most final. From taking the first step by getting a valuation of your business, to closing it down and selling off all the assets, is all part of liquidation.

While choosing an exit strategy may mean the end of an era, it does not have to be that way. You never know, perhaps it is the beginning of a new chapter for you.



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