5 Reasons why Starting a New Fashion Brand is Hard (in 2023)

5 Reasons why Starting a New Fashion Brand is Hard (in 2023)


Here at 440 Industries, we’re all about entrepreneurship and startup ventures. We are truly passionate about building an audience, creating new products, and bringing your vision to market. 

Having said this, we are also realists, and much of our content focuses on providing an objective perspective on the challenges of starting a business. 

This is why, in this post, we’re looking into 5 things to consider as possible hurdles that you may need to overcome as you start your fashion brand this year. 

With no further ado, let’s get to it. 

1. Starting a Fashion Business Is Expensive

The first thing to take into account is that the fashion industry is a manufacturing industry, it sells physical products which cost money to make. This may seem obvious, but it’s always worth clarifying how, many of the role models that are discussed in the context of startups, are connected to the field of software development, which can be much more affordable in the early stages. Starting a fashion brand requires investing in fabrics, craftsmanship, prototyping, and manufacturing before you even have anything to sell at all. 

This is why, as an entrepreneur, you may need to have some clear ideas in terms of how you are going to pay to support the collection development over a timeframe that can last up to 18 months, from start to finish. 

Not only this, but once your collection is in place, you need to build an audience around it, and work towards establishing a connection with your followers that presents your work in a persuasive and alluring way. This requires yet another timeline and budget, that can be hard to keep up with. 

On the other hand, it’s important to note that there are some business models that revolve more around the fashion communication side of the business. Following this approach, you would invest more resources towards building the “client-facing” part of your organization while partnering with companies that supply you with products to resell at a markup. In this latter case, in the early stages of the business, you may be able to save money, but eventually, working through outsourcing agreements, may not be the most profitable approach to follow. 

In order to approach this challenge, it is necessary to plan your financial decisions early on and establish a strategy to support the business for enough time to get your products to market. You could start by relying on other forms of income initially, but in many cases, resorting to private equity is the preferred approach, not only to access more capital but also to expand your team and work with established professionals. Once your business is set up, then debt financing could also be possible, assuming that your monthly costs can afford the addition of a financing payment. 

With no internet to provide any financial advice, if this is something you’d like to learn more about, in this post, we’re exploring financing options that are available to anyone looking to build up capital to get their venture going: How to Finance Your Fashion Startup.

2. It’s a Competitive Industry

Fashion is a growing industry, and as such, it draws new players and competitors every year. As the industry is presenting so many different options when it comes to satisfying consumer needs, it can be really hard for a newcomer to compete profitably in the market. 

In this context, fashion entrepreneurs need to be aware of the costs associated with bringing to market their products, and overcome the “noise” that obstructs communication with their customers. 

In this sense, it’s essential to make sure you’re picking the right customer segments. Usually, market segments are chosen by fashion companies based on three different criteria.

  1. Choose the most profitable customers. This is what companies do when they are well established and are maximizing the opportunities connected with focusing on the most profitable customers, the ones willing to spend the most money to satisfy their fashion needs. The issue connected with this target segment is, as discussed above, that all companies ideally want to target these segments, and as a result, conducting a marketing strategy aimed at acquiring high-level customers can be extremely expensive.
  1. Choose underserved market segments. In this case, a fashion brand can identify some market segments as being underserved by the market, and position itself towards it. In this case, the brand is going to experience a lower degree of competition, but it may be difficult to identify the right pockets of value.
  2. Choose the segments that provide a high return in terms of image. In this case, we’re seeing how companies are targeting segments that are prestigious, and by helping them satisfy their needs, they may be able to show their high standards of quality and service. Associating your brand with high-end customer demands, can help you build a strong brand promise and build value that benefits your brand’s perception.

Great, let’s now move on to our next challenge.

3. Cash Flow is A Challenge

As we mentioned above, running a fashion business requires having enough time to run a year-long production cycle, potentially not making any money in the meantime.

Even before our collection hits retail shelves, so much needs to happen. For instance, here’s a list of typical processes that fashion companies need to have in place before they can expect to make their collection development investments back.

  • Researching design ideas
  • Selecting materials
  • Creating collection samples
  • Showing the collection to potential trade clients
  • Selling the collection by collecting an order
  • Producing the collection

We can see how as a result of this, fashion entrepreneurs may need to have high reserves of cash to keep the “boat afloat” while all of these steps are completed. It may be really difficult to maintain your business operational, if, on top of all of this you’re also paying all additional costs related to your employee’s payroll and office space rental.

In this sense, it can be advisable to make sure that for the first months of your operations you are able to maintain some additional sources of income to make sure you are not putting yourself under too much financial pressure. 

At the same time, it’s worth mentioning, that if your business hits an interesting market opportunity, you may have access to various sources of funding that will help you support your organization as your collection reaches your end customer.

4. The “Product Life Cycle” is Fast

Another important element to take into account has to do with the fact that the number of collections launched by fashion brands over one calendar year is increasing all the time.  This means that your fashion brand may be required to create multiple collections to provide its customers with the vast array of choices they are used to getting from your competitors. 

This poses many challenges, including issues connected with fashion sustainability and with logistics and supply chain management, which could be a little overwhelming as one starts off with a new venture. 

At the same time, it’s important to consider that brands can manage this risk by focusing on a collection of unique pieces that are trans-seasonal and iconic. By developing a collection of products that can resist F\W and S\S seasonality, a company can avoid some of the issues connected with developing multiple collections at once.

5. You Need a Great Team

Last but not least, a great business is comprised of great people. If you want your business to grow you need to attract, select and retain great talent. This can be quite expensive as high-performing individuals can be a big investment in terms of payroll. 

New dimensions of work and life balance can certainly help you in managing a team working from remote or located in other countries, but still, the investment connected to putting a team of talented individuals together is not to be underplayed. 

Great! Now that we’ve covered our top 5 reasons why starting a fashion brand can be challenging, it’s time to draw a few conclusive remarks.


There you have it! In this post, we’ve discussed 5 reasons why starting a new fashion brand can be challenging. As mentioned at the beginning of the post, we have no intent to discourage you in your entrepreneurial endeavors! We’re just looking to present an objective perspective on some of the hurdles that you can expect on your way to success.

If you are interested in reading more about the topic, here’s a book we recommend:

Starting a Business: Quickstart Guide provides an interesting analysis of the mindset that entrepreneurs need to develop to succeed in the market.

If you’re interested in reading more about fashion entrepreneurship, don’t hesitate to visit our blog, where you can find a wealth of information on the fashion business.

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5 Reasons why Starting a New Fashion Brand is Hard (in 2023) In this post, we're look at 5 reasons that make starting a fashion business this year, a challenge.
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