Disclaimer : I am a high schooler and I just turned 18 in September. I don’t know much about business. No one in my family knows much business. If I sound clueless and naïve it’s because I am.
So this summer I started a small clothing brand from my own pocket. I had one design manufactured at a quantity of 50 and it cost me around 1k. I’ve sold out and I turned a turned a profit but it really didn’t seem worth all the work I put in. I know that if I want to see higher returns I have to sell more than 50 shirts.
I want to have my next design made but I just don’t have the money. Is it wise to take out a loan? All I can hear is my mother berating me about what a terrible idea that is.
If I were to take out a loan it would be for less than 10k. But the idea of going into debt at 18 is horrifying. I’m sure I could make it back with time. Having that much money means so much freedom to create the brand I’ve dreamed of. Part of me just feels like I’m too young and inexperienced to chase this passion and I should just work a normal job while I’m in school. I’m just lost.
As you can tell I do not know a lot about the business world and finances. Any and all advice/information will be hugely appreciated.
Thank you— What I have been doing is using income from part time jobs to invest in the business and I feel like it’s not going to take me far. You have a point that I probably wouldn’t be approved. I actually talked to my parents and I realize I need to start building a good credit score. I could maybe take out a personal loan? If not what’s your advice to actually make my brand something bigger if I’m only running it by myself?
Being unsure of your credit situation, definitely build credit as soon as possible. Get a credit card that you autopay in full every month. A personal loan seems unlikely to be approved to me, but the interest rates would crush your margins anyway. To put it in perspective- you self fund and have success grow and build credit at the same time. Grow bigger than you can handle, then start hiring and keep going. B) you somehow get approved for a personal loan at 15%. First/ second payment due before your shirts are even delivered, how are you making those payments? Your sales slow and now you are working a job to pay off debt and have boxes of shirts in your parents garage. Be patient, good businesses take time.
My experience: I’ve owned my business for 9 years, we do well over a million dollars in revenue, are profitable and still struggle to get financing for big equipment that would increase our margin.
How did 50 units cost you $1000 ?
You were robbed
But also, sad that your mom isn’t more supportive
Head to YouTube, watch half a dozen videos, figure out how to minimize your costs more, network with people and find better suppliers
You can try a pre order program - get enough people to pay in advance - then go for it
Good luck