Category Archives: what I know about…

What I know about Cash Flow…or lack thereof

OK so this post is way overdue! I have to admit that sometimes I hesitate to write on a topic because I haven’t completely figured it out yet. BUT I have reminded my self of my committment to my readers to not share all the answers but what I have learned so far on my journey that may help others. So here it is my list of what I know about cash flow and a fashion business.

1. It sucks. But it must be mastered if you want to run a successful profitable business.
2. You need a line of credit but most banks won’t give you one in your first couple years until you show increased profitability and a certain level of income from your business. This means you have to rely on credit cards with usually higher rates in the meantime.
3. When you are ready to apply for a line of credit be sure you have: a tax return of the most recent year. A profit and loss sheet showing you are not spending more than you are making. Banks want to loan to people they know can afford to pay them back.
4. Be smart about what you use a line of credit for. Using it for production costs until your customer pays for the order (since you front production costs) is a smart way to use the line of credit. Buying all of your materials up front so you can receive a discount is another smart way to use your line of credit. Redecorating your studio is not a smart way to use a line of credit. Wait until you have cash in the bank for something like that.
5. Know your terms. If you have to pay your line of credit back every 30 days you need to make sure you are managing your production and cash flow effectively. If you are not good with numbers hire a bookkeeper. Yes it’s an expense but much less costly than all the interest fees and potential loss of your line of credit.

Ok so all this talk of line of credit. Do you really need it? Why should you consider it?
1. You have opportunities to go into larger ventures. Often deals with larger companies have net terms and high volume. If production is going to cost $5000 dollars and you won’t get paid on your order for 60 days the line of credit bridges the gap.
2. You currently buy your supplies in small quantities and as such pay a higher price for goods. With this you run the risk of the supplier running out of your material when you need more. However you can’t afford to buy more at one time due to cash flow. This really applies to businesses that wholesale and plan their seasons 6 months or more in advance. Cash flow aside (If you pay $12 a yard because you buy less than 15 yards at a time consider that you can buy 30 yards for the same price at wholesale. Start calling the direct manufacturer if you are currently buying from a distributor.)
3. You are having a hard time paying for both your household expenses and fronting the production costs for your business.

My husband was in banking prior to joining kangacoo designs and still I was denied my first time I asked for a line of credit. It’s very important to find a bank that deals with small business start ups and will take the time to tell you the requirements they have for offering a line of credit. Not all banks have the same requirements so shop around.

Cashflow really goes hand in hand with production managament, sale management and also in making smart choices when buying services to help you atart up your business. I will talk more about this in the coming months. In the meantime I welcome your questions on cash flow. Email me


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What TFBM knows about: building your email list

Last night I had dinner with a friend and we of course got to talking shop.  It started a bit like this, “Ugh darn Facebook!  I have 9000 fans and only reach 1500 tops!  And that’s if I don’t post a picture or tag another page.”  We shared ways we try to “trick the system”: leaving links and pictures in the first comment.  The bottom line is, no matter what you do to trick the system only a fraction of your “fans” see your posts.  So what is a business owner to do to reach your potential customers?

One thing I am starting with is taking control of my true fans and customers.  I do not want to rely on Facebook to communicate to my top customers and buyers.  I am taking them back!  I am doing this by transferring them all to my email list.  I use mailchimp but there are others out there you can choose from. (Don’t get me wrong I will still use Facebook but I am taking as much control as I can before any more changes come my way.)

Here is the catch!  You cannot randomly add people to your list.   They have to opt in (by law).  So this poses the question how do you offer an incentive for people to take a few minutes to visit a sign up form and complete it?

I regularly promote on my fb page that my email list followers get special coupons and offers and leave the link to sign up.  This week I am doing something extra special.  We will see how it works out.  I am offering a $100 shopping spree to one randomly selected person signed up for my, kangacoo designs, email list.  I posted it as you see below and paid $30 to promote it.

OK here is your chance! Sign up for our email list for a chance to win a $100 shopping spree for our spring line! That’s it so simple! One winner will be chosen next week at random from our email subscriber list. Already signed up? You are already entered! 🙂 Sign up here:

Right now I have 778 email list subscribers.  I will run this offer for 1 week and will update you if the $100 gc was worth it.  🙂


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What I Know About: LA Fabric District


I used to hit the Fabric District in LA quite a bit.  But last year I left that task to my husband who helps with the business.  I took him there one day and introduced him to my vendors and told him where to find what I need and then I started staying home to focus on other parts of the business and sent him up on his own.   At first he was petrified and frustrated.  The vendors tried to charge him higher prices because they didn’t remember him.  I would tell him who would try to do that and how to talk them down but he struggled at first.  Now he’s an old pro.  That’s him above in the black coat.  Now he knows more vendors than I do and he has talked down prices even more for me since our volume has gone up.

I think many vendors see this as the land of opportunity but I see it through more jaded eyes.  I see it as a land of wheelers and dealers and mediocre fabric that you have to weed through to find the gems.  These $1 a yard fabric vendors seem exciting but feel the woven cotton prints (better yet buy a yard and wash it) and you will see not all great deals are worth it.  However if you find the right $1 vendors you are golden.  Some buy close out fabric that is actually really nice.  You are limited to what they have on hand so it really only works for a small online shop not for mass production.


I will leave you with one tip today.  Once you find what you want be sure to walk the whole street to see who else has it.  Ask how much a yard and then once you get a price ask how much wholesale price is and how many yards you need to buy for that price.  Often the first price they give will be $10 and then wholesale price is $6 with a low yardage minimum like 10 yards.  Use these prices to go back and negotiate.  “Up the street he said $10/yd can you beat that?”  They will negotiate.


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What I know about: The Fashion Business Mentor

Consider this not so much a new series on the blog but rather a helpful friendly way to organize the information on my blog.  You see I blog as I learn and I am constantly learning.  When I feel I have learned enough about a topic to pass on a little wisdom and guidance I blog it.  So from now on I will start blogging What I know about:(fill in the blank).  I am adding a What I know about category on my blog so you can easily read through headlines to find a post with the information you need.  Don’t see a what I know about post with the topic you need?  Email your topic request to

If you are new here let me fill you in on what this blog is all about.  I own a fashion business and I have learned the ropes on my own with no education in the field and no experience.  I just dove in.  In just a few short years my line is in almost 100 stores and I have celebrated my 1050th online shopper in my e-commerce shop.  I will be honest it has been a rough uphill climb (good thing I thrive on that sort of thing) but it doesn’t have to be so hard for everyone.  Along the way I have often said, “If only there was a resource to go to for help.”  So at the beginning of the year The Fashion Business Mentor was born.

This year I have not blogged quite as much as I wanted.  The reason was that I have been learning.  A LOT!  So I have spent a huge amount of time this year adjusting and processing and applying my new knowledge to my own business.  Testing my theories so I can pass on solid information to you.  I am excited for what 2013 has in store for the fashion business mentor and it’s readers:  actual mentorships, a lot of information on wholesale and growing your business, and lots of industry specialists guest blogging.

I look forward to interacting more with you all and hearing more about your businesses!

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