A lot of fashion designers often think they can just come up with an idea, pitch it to Shark Tank, and suddenly their fashion business will be booming! Well, it’s a lot more complicated than that! In fact it’s so complex that we put together a list of the top 10 things a fashion business can learn from watching Shark Tank. They are;
- Know your fashion business and your numbers like the back of your hand!
- You need to have confidence!
- Everyone loves a story!
- Do your homework!
- How low are you willing to go?
- You need to have a sizable market!
- It’s not always about the money but about the network!
- You need to know how to sell!
- It’s always good if you can have some sales before going into it!
- Are you committed and serious?
Let’s dive into each one more in depth!
Watch it now then let us know your thoughts below! Oh and if you want to join us Live so you can ask questions, be sure to join our Facebook The Fearless Fashionpreneur Group.
Hey there Fearless Fashionpreneurs, we are live again. How’s everyone doing tonight, awesome! So for tonight’s Facebook Live I wanted to talk about Shark Tank. So I personally love Shark Tank. I don’t have any time to watch TV, but when I do have a split second here and there, I will watch reruns of Shark Tank. I think it is a great show and there can be a lot that you can learn from other people’s businesses even if it’s outside of the fashion arena. There’s really a lot of things you can learn from watching the show. So I wanted to talk today a little bit about the 10 Things a Fashion Business Can Learn from Shark Tank. So if you’re watching this video, please share this video with all the fashionpreneurs you know. So let’s get right into it.
1. Know your fashion business and your numbers like the back of your hand.
So number one is that you need to know your business and you need to know your numbers like the back of your hand. One of the things I noticed when watching Shark Tank is that they ask you a ton of questions. They fire them right at you and they expect you to know these things right off the top of your head, like the back of your hand. And you should. You’re a business owner and it’s important that as a business owner if you want to take your fashion business to the next level and really be profitable and really be successful, that you start acting like a business owner, you start taking your business seriously and I can tell you until you take your business seriously, you won’t make any serious money in your fashion business. Business owners know how much they’re making every day, every month, every year, year-over-year; what their sales are and where their sales are coming from. All this information is really important so you need to know your numbers. I’ve noticed that on Shark Tank, they consistently ask the same seven questions to almost every single contestant on that show. I want to go over these questions because I really think that as business owners, especially as fashion business owners, you need to be able to answer these seven questions as well.
i. How many you sold and in what period of time?
As a business owner you need to know how many pieces have you sold; how often are you selling them; when are people visiting your website; what time of day are they visiting your website; and what day of the week are they visiting your website. Maybe you notice that people will come to your website more and buy on Tuesdays and Saturdays, or at 3 p.m. and 9 p.m. Whatever it is, you need to know how many pieces you have sold and what period of time you have been selling those pieces. This is really really important.
ii. What’s the cost to make and what are you selling it for?
I can tell you right now; if you’re not making double your cost; if you’re not profiting; if your margins are not double the cost whatever it costs you to make your product; if you’re not charging wholesale price at least double; you’re not going to make enough money. You’re just not. It’s just for a small start-up business, especially a fashion business, you need to be making at least double, you just do. If you’re planning to sell retail yourself, meaning on your own e-commerce shop, or even in your own brick-and-mortar store, you need to charge at least 4-1/2 to 5 times your costs in order to be making a profit. Now I know what you’re thinking: How can I possibly charge that price? Well the problem is that, even though yes you’re cutting out the middleman, you’re cutting out the retailer by you now being the retailer yourself; you still can’t charge your wholesale price on your website, you just can’t. You’re not going to make enough money. You’re now taking on the role of the retailer. Yes, you have cut out the traditional retailer, but you’re now the retailer and you now have to spend money on marketing, on advertising, on your website hosting and updating the website with inventory and shipping and all of these things. This all costs money, and in order to make enough money, you need to charge at least 4-1/2 to 5 times as much as your cost. That is really really important. I have noticed several times on Shark Tank that they even want you to be making 4, 5, 6, 7, 20 times what it actually cost you. This is because they know the more money you’re making every time you sell something, the more likely you are to be profitable and they want to invest in profitable businesses. That’s really important.
iii. What’s your fashion business best seller?
The third question they always ask is what’s your best seller? As a fashion designer, this is really important. I have noticed on Shark Tank that they consistently ask this question. I can tell you even from being a fashion designer myself, working for different companies, I always wanted to know what the bestsellers were. I was always going to sales and asking what did Macy’s sell out last week, what were the bestsellers last week, and what were the bestsellers last month? Then I started taking those styles and re-purposing them in a way because there’s a reason why that style is selling. Whether it’s the fabric, the fit, the style, the cut, there is something about that style that’s making it a bestseller. If you can redo that style in a way or re-purpose that style in a way, you’re more likely have a chance that that also will be a bestseller. So taking the same style and doing a different fabric; or doing a different print; or taking the same skirt and doing a different top; or taking the same top and doing a different skirt; or adding a sleeve or making the sleeve short-sleeve or long-sleeve or three-quarter sleeve. There are so many different ways you could re-purpose that one style, that one bestseller, and then hopefully you have multiple bestsellers. That’s really important, especially as a fashion designer, that you know what your bestsellers are. You should know what’s making you money and what’s not making you money. If there are styles that aren’t selling or aren’t getting any attraction, no one is paying attention to them, just drop them. I don’t care if you absolutely love it or if it’s your favorite style on the line. If no one is buying it and no one is responding to it, it’s not worth your time and energy. You need to focus your time and energy on your bestsellers.
iv. What’s the cost to acquire a new customer and how often do you have repeat customers?
The fourth question I noticed that they always ask is, what’s the cost to acquire a new customer and how often do you have repeat customers? This is also really important as with fashion businesses because you need to know what’s the cost for you to acquire a customer? How many people are visiting your website and how long are they on your website and where are they coming from? How much money are you paying to drive new traffic to your website? How much does your email marketing cost, and your website hosting, and your web designer, and your Facebook ads and all your marketing materials? Are you doing tradeshows? How are you acquiring these new customers and what’s the best method for acquiring these customers; what’s your highest return on investment? If you’re doing Facebook ads, what’s the cost to acquire a new customer to come over to your website and actually purchase something? That’s really important. You want to know those numbers, because the higher the cost to acquire a customer, the less likely you’re going to be profitable. You want those numbers to be really low so that you can get more customers without it costing you a fortune to get them. the higher the cost to acquire a customer, the less likely you’re going to be profitable Click To Tweet
v. What will the money be used for?
The fifth question I have noticed that they always ask on Shark Tank is, what will the money be used for? Everyone that’s going on Shark Tank are obviously looking for money, they’re looking for investors, they’re giving up equity in order to get the money. But, people want to know what that money is going towards. Whether you are looking for investors or you’re trying to do a crowdfunding campaign, people want to know exactly what you’re going to use that money for. I saw an episode one time where the Caddy Girls were on there, and they had a very successful business. It was going well and I think she was asking for like $250,000 or $500,000 and they said okay “ what are you going to do with the money”? She couldn’t answer the question, and no one ended up investing in her business. I don’t blame them, because I am not going to give my money to somebody if they can’t tell me what they’re going to use it for. This is especially important with crowdfunding, because people want to know what that money is going to be used for. Is it going to be used to produce the line, to manufacture the line? Or are you going to take $500,000 and go party on yacht with your friends and have a huge party? People want to feel safe about investing their money and giving their money to you. So that’s a really important one right there. Be sure you know what the money is going to be used for if you are trying to raise money.
vi. How many doors are you in and what’s your plan for distribution?
They always ask how many doors are you in and what’s your plan for distribution. “Doors” is a slang term in the industry which just means, how many stores are you in, what stores are carrying your line. Then they want to know the second part to that question which is, what’s your plan for distribution; how are you going to grow the company? If you’re already selling to specialty stores, do you plan to then sell to department stores? Or, if you’re only selling online, do you eventually plan to sell retail stores or have your own brick-and-mortar store? They want to know what’s going on currently, what stores are you currently in and where are you going and what’s the plan for the distribution. So you should know that as well.
vii. What’s your background?
They always ask what’s your background? The reason that they usually ask that question is because 9 out 10 times you’re more likely to succeed if you actually have a background in the industry that your business is in or if you have a background in business in general. So that’s really really important. For instance, if you’re starting a fashion line, if you have experience in fashion industry, if you worked in the industry or gone to school or something like that, that’s really helpful. Let’s say you are a doctor, and that’s your background. If you’re trying to start a fashion line and trying to approach investors, they may look at you like we don’t know if you’re actually going to make it. They know that without having that industry experience, you may not know what you’re getting yourself into. This is part of the reason why I started my fashion coaching business, Fashion Angel Warrior. I realized that a lot of people don’t want to go to fashion school. They don’t want to waste four years and $50,000 on their education and come out still not knowing exactly how to start their own fashion line. So Fashion Angel Warrior exists to really help you save time and save money. That way you can cut that stuff out so you can become profitable as fast as possible and really lean on my experience and knowledge of the industry as your industry experience. That’s what we could offer and that’s why we’re so successful. But that’s something to think about, what’s your background, as they will always ask that question.
So those are the seven questions that I’ve noticed that they always ask on Shark Tank. The next time you watch Shark Tank, pay attention and see how many contestants they ask all those seven questions to. You’ll be shocked to see that they do always ask those questions. And even if you don’t see them ask the questions on the show, I’m sure that they ask them behind-the-scenes with all the takes that we don’t see on the actual show because those seven questions are really important. It’s really important that you’re able to answer those seven questions for your fashion business.
2. You need to have confidence!
The second part that’s really important that we can learn from watching Shark Tank is that you needed to have confidence. No matter what you’re doing, as a business owner, it’s really important that you exude that confidence; that you’re confident in your business, you’re confident in your product and you’re confident with your own capabilities. That’s really really important. Now, I’m not talking about being arrogant or prideful. You definitely don’t want to go with that far with the confidence. But you want to be able to stand tall, to not cross your arms or fidget and do weird things with your hands when you’re talking to people, especially investors or buyers when you’re pitching a line to them. You want to be able to stand tall, stand up, you want to be able to speak without having to stutter your words or fumble over your words, so you want your speech to be really good. You want to just be naturally relaxed and calm, you don’t want to be over hyper or ADD or all over the place. You need to have that confidence, that’s really important. I’ve noticed that on Shark Tank they are more likely to invest in people that are more confident.
3. Everyone loves the story behind the fashion business!
The third tip we can learn from watching Shark Tank is that everyone loves a story. They’ve actually done studies on this and 30% of the people that got investing from Shark Tank from sharks actually were able to tell a story. So if you’re able to include some kind of narrative or some kind of personal experience in your life that’s always going to help your chances of winning someone over; whether it’s an investor, whether it’s a buyer, or whether you’re selling to a personal customer one-on-one. People want to know a story. They want to feel like they can relate to you. Once they feel like they can relate to you, they feel like they know you. Once they know you, they start to like you. Once they like you, they start to trust you and then you have them and then you have the sale. That’s that whole KLT factor, the know, like and trust. That’s going to get you sales, that’s going to get people knocking on your door wanting to buy from you. So if you can incorporate any kind of a story, something that’s emotional or touching, that will definitely help your chances.
I saw one episode of Shark Tank where the Red Dress Boutique, of course, they were already doing very successful, they had everything going for them. They had everything else already lined up and good to go. They knew their numbers, they were prepared, they knew exactly what they were doing. But they also shared a story. The girl shared specifically how her father had passed away and she was using his death to fuel her passion and drive. She said, “I’m not going to quit on this thing because I’m doing this business now for my dad and his honor”. I can guarantee that the sharks definitely were more likely to invest in her company and they ended up investing in her company because of that story. I’m sure that put them a little bit over the edge as far as thinking okay we need to invest in this girl because she is serious, she has passion and she is showing us that. Probably maybe one of the sharks could even relate to her in a sense. So it’s really important. If you can tell a story, figure out a way to tell a story about your fashion business. Tell something that’s personal. Tell something that can really grab people’s attention and get them again to know like and trust you.
4. Do your homework!
If you watch Shark Tank you notice that these people, the ones at least that actually do well and actually get an investor at the end of it or get a shark to invest in their company have done their homework. They know all about the sharks. They know everything about their personal life, about their businesses, and about what businesses they have invested in. You’ll see they noticed that they often say things like, “Oh, I, like you Daymond, did X, Y, and Z or I did this and this, similar to you Lori”, so they always add in that little extra bit like “I’m like you” and it’s that reinforcing factor again that they can relate to you.
It’s the same thing when you’re pitching a buyer, you want to stalk them, literally stalk them. You want to know everything about them. Go to Facebook, go to Instagram, go visit their store, know what lines they carry. You need to be able to know everything about this person so that you can try to relate to this person and try to tailor your pitch specifically to them. So again that way they can start to know you, they can feel like they like you, and then they start to trust you. Then you have them and then you have the sale. So this is another thing that we can learn from watching Shark Tank.
5. How low are you willing to go?
The fifth thing we can learn is how low are you willing to go? If you watch Shark Tank, there’s always negotiations going on and of course, the sharks are going to try to get the best deal that they can get. They are going to try to give as little money as possible for the most amount of equity. The people on the other end, the contestants, need to know well how low am I willing to go, how low am I really willing to accept an offer. A lot of times you notice that they hesitate, they don’t know how low they’re willing to go. They say that they need to think about it or they need to go outside the Shark Tank and talk to one another about it. Then, by the time they make their decision and come back, the sharks have already either taken the offer off the table or they have changed their mind or they have lowered the offer. So you need to know how low you’re willing to go.
This definitely applies when you’re approaching and pitching buyers. Buyers are notorious for wanting to do whatever it is they want to do. They think they own the world and that you will just comply with whatever they want. So let’s say you have on your line sheet your minimum order is 10 pieces per style per color. You will have a buyer come along and write an order for eight pieces per style per color. Then you need to decide what you are going to do. Are you going to accept the eight pieces, or are you going to put your foot down and say, “No, I’m sorry, my minimum order is 10 pieces per style per color, so you really need to increase your buy”. It’s really important to know what you’re willing to accept, and how much is it worth for you to get into the store. By you accepting eight pieces it might put you in a bad position. It might raise your price of manufacturing because now you don’t have enough pieces to manufacture. So now the cost is going up and your profits are going down, just so that you can sell on to this one store. Is that worth it? That’s something that you need to decide.
You will also see buyers where you have a delivery date January 30th and they are like “okay, but we need this January 15th”. You need to decide. Are you going to accept that; or you are going to be able to ship on time two weeks ahead of your normal delivery date? That’s something you want to be really, really careful with because if you do not ship on time, you’re never getting an order again from that buyer. So, as much as you want to please them and as much as you want to be in their store, it’s really important that you don’t screw yourself over. Really take a look at your fashion business. Take a look at what you’re capable of doing, that you have enough leeway time to do your production and that way you know how low you’re willing to go. So, whether you’re looking to get investors or whether you’re looking to pitch a buyer or trying to get some orders, you need to know how low you’re willing to go.
6. You need to have a sizable market!
If you ever watch Shark Tank, occasionally they’ll say I’m sorry, I just can’t invest in your business because I just don’t think your target market is big enough, that there’s a big enough target market customer base to really make this profitable. So I always say it’s good to have a niche. It’s really good in your fashion business to target a specific market. You definitely don’t want to try to target everyone because it’s impossible and you will never do it, you will never succeed at it. At the same time, you don’t want your niche to be so small that your demographic and your target customer is just not big enough for you to actually make a profit. So always keep that in mind as something that’s really important to take note of and just see what size your target customer really is. It may be that you’re too niched or you need to niche yourself even further and so on and so forth so you can make those tweaks to your business.
7. It’s not always about the money but about the network!
Yes, when you’re asking for money of course at the time you need money that’s why you’re asking for it. But at the same time, you want to know that this person is not only willing to give you their money but that they also have the right connections; they have the right people, the right buyers, the right celebrity contacts. Whatever it is that you need for your fashion business, this person should have those connections for you because one connection can be worth millions. It could skyrocket your business. Having one celebrity wear your product could totally spike all these sales in your business. Or having this one store buy your line and then becoming a customer for life, buying from you over and over again, could be the key to really making your fashion business succeed. Don’t always look at the money. Don’t always put so much value on the actual money.
This goes too if you’re looking for a partner in your business, somebody that will be basically in a partnership with you. You want someone that’s going to have something that’s valuable. They should have a skill that you don’t have, or something that you are weak in and they are stronger in. You don’t want to have someone that has the same exact skills, you want to have someone that complements you and has skills that you don’t have or is better in certain areas than you are in certain areas. That’s what is going to make them a valuable partner. So think about that when you’re looking for a partner, think about that when you’re looking for investors. It’s really important, the connections can get you further than where the money will get you.
8. You need to know how to sell!
You need to know how to sell. I don’t care who you are, I don’t care what business you have, sales equals profits equals success. Your business will not be successful if you’re not selling anything. You need to know how to sell. If you’re not comfortable with selling, or you don’t want to learn how to sell (I do believe that selling is a skill that can be learned. It’s not something that you have to have innate inside of you.You can learn it. But if you’re not willing to learn it or you don’t want to take the time to learn it) then hire someone that will do the sales for you. If you can’t sell anything, whether it’s selling to an investor, selling to a buyer or selling to a direct consumer, you will not make any money. You need sales to be profitable and successful. I’ve noticed things on Shark Tank. One time Daymond made this guy, (I felt so bad for this guy), he made this guy sell him a pen right there on the spot, he just said: “dude sell me this pen, show me your selling skills right now, I want to see you sell me this pen”. The guy did okay, I mean he was literally put on the spot. He probably would’ve done better if he asked Daymond some questions ahead of time and said: “Well why do you want a pen” or “What are you looking for in a good pen” If he’d tried to get some information from him first, he would’ve done a lot better. So basically you need to know how to sell, that’s just the fact. I’m not trying to be mean, it’s just a fact of life. It’s a fact of business. If you want to be profitable and you want to be successful, you need to know how to sell. If you want to be profitable and you want to be successful, you need to know how to sell. Click To Tweet
9. It’s always good if you can have some sales before going into it!
Okay number nine, it’s always good if you can have some sales before going into it. This is especially so on shark tank. These people don’t want to invest in you if you don’t have any sales. They want to know that your idea has already been proven; that someone is already willing to pay for your idea; they are willing to pay the price that you have set; and that you’re actually making money at this thing. They don’t want to know that you haven’t had any sales and you’re still in the beginning stages of things. That just tells them that they’re not sure that your idea even is going to work. There’s already so much risk involved in having a business.They want to try to eliminate as much risk as possible and part of that is having sales.
The same can also be applied to pitching a buyer. Buyers also want to know that you already have sales. I understand that yes, you can’t get sales if you don’t have sales, and you can’t have sales unless you get sales. It’s kind of a catch 22. Like you can’t get a job unless you have experience, but you can’t get experience unless you have a job. Yes, it kinda sucks that it’s like that, but it’s true. Buyers are more likely to buy from you if you already have sales and you can use that to your advantage. So let’s say you had 15% sell-through at a different store or your line sold out in two weeks. You can use that to your advantage when you’re pitching a buyer. You can say “Hey XYZ store sold out in two weeks“, or “I had a 15% sell through this item so we redid it for spring and now it’s available and it’s going to sell out again so we wanted to make sure that you’re the first to get it,” and so on and so forth. This is how you can sell your line to other buyers. They’re more likely to buy from you if they know you already have proof, if you already have existing sales. Now, of course, you don’t want to mention if your line is sold in one of their competitor’s stores because they don’t want to know that you’re selling to their competitors. They might even ask you not to sell to their competitors or ask you for some kind of exclusivity, which is a whole other topic. Having sales does help you, just don’t mention it if it’s a competitor of theirs, keep that in the back of your mind.
10. Are you committed and serious?
The last one is that you want to show that you are committed and serious. One of the things that they always do on the Shark Tank is, they always ask, how much money have you invested? How much have you put into your business? They want to know that you are committed. They want to know that you have drawn the line in sand; that you’re not quitting; that you’re not turning back; that you’re not going to go get a job tomorrow. They want to know that you’ve put everything on the line for this business. They won’t want to invest anything if they don’t think that you have invested anything. And that just goes for everything in general; for buyers, and even for consumers or if you’re trying to crowdfund your business. People don’t want to invest in something if they feel like you haven’t invested or if they feel like you’re not committed and you’re not serious. So really be committed. Really take the stance of: I am going all in and this has to work, like you have no other way, like this is the only thing and your life depends on it, you have to succeed in this business and you’ll do whatever it takes.
Having that mentality and showing that mentality to other people will really help them see that your fashion business will succeed because of your determination. Even if your product sucks, even if your line is horrible. If you have that kind of determination, confidence, and commitment level, you’ll succeed at anything in life, because you’ll find a way and you’ll do whatever it takes. I’m always saying do whatever it takes. That’s my famous quote “WIT” because warriors do whatever it takes. That’s why I named my business Fashion Angel Warrior, because to be in the fashion industry I believe that you do need to be a warrior, you do need to do whatever it takes to really succeed. So just have that commitment, have that mentality. Even if you’re working a job that’s fine. If you have a job on the side, I always say don’t quit your job right away, you want to have enough money coming in from your business to support yourself financially before you quit your job. Don’t think that because you have a job that means that you’re not serious. Look at it like : okay this is my life and it depends on it; I need to be able to succeed in this business; I have no other way; I don’t want to work for someone else; I’m not going back to whatever I used to do before; and it has to be this or you know I will figure something out. Have that mentality going into it.
So those are the 10 things that a Fashion Business Can Learn from Shark Tank. I encourage all of you to watch Shark Tank. Pay attention the next time you watch it, see if they ask those seven questions. Take notice of other people’s businesses. You can learn so much from how other people market. You can get ideas about colors, about targeting people, about how to market to people, about distribution, or different revenue streams. There’s a lot of things you can learn from watching other people’s businesses and what they’re doing in their business. Then see how you can apply it to your fashion business. Hopefully, you guys enjoyed this, I would love to hear comments about the next Shark Tank, that you watch so please comment on the video.
We will be doing these Facebook Live every Tuesday at 7 PM Eastern Standard Time inside the Fearless Fashionpreneur Facebook Group. Tell all your friends and let me know what you want to talk about. Let me know what you want the topic for the next week to be, we can do Q&A, we can do topics like this. We can pretty much do whatever you guys want to do as I am here for you. I am here to encourage you, to inspire you, all of you fashionpreneurs out there. It’s really hard to be a fashionpreneur. It’s really hard be a solopreneur, and I can tell you it gets lonely. I work from home and a lot of times I just don’t have anyone to talk to. So I love to talk to you all, hear back from you, hear the feedback, I love it! Thanks for all the likes and the hearts and all the comments today, I love you guys and I will see you next Tuesday for Facebook Live in the Fearless Fashionpreneur Group.
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