Bonus: The $200K Reality Check: Why Starting a Fashion Brand Costs More Than You Think

Think you can launch a fashion line with a few thousand dollars? You might want to think again. In this eye-opening bonus episode, Rachel Erickson breaks down the real cost of building a successful fashion brand—and spoiler alert: it’s not cheap.

After crunching the numbers, Rachel discovered that $200,000 is the magic number to hit profitability by year three. But where does all that money actually go? She walks us through the financial roadmap, from inventory costs to hiring a team, and reveals why many brands run out of cash before they even get off the ground.

Beyond just the numbers, she also shares creative ways to fund your brand without drowning in debt . From freelancing to grants (and even unexpected funding strategies), she lays out real, practical solutions for making your dream brand a reality.

If you’ve ever thought about launching your own line or working with clients who are, this episode is a must-listen. Press play now to hear the real numbers and learn how to set yourself—or your clients—up for long-term success in the fashion industry!

Resources:
021: How to Get Funding for Your Fashion Startup

About Rachel:
After 20 years of working for corporate apparel brands across the U.S., Rachel took a leap of faith and launched her own business consulting company in October 2021. Now, through her company, Unmarked Street, she partners with a variety of apparel brands, offering expertise in development, production, project management, and industry insights. With a vast network of connections across the industry and a deep passion for teaching and sharing knowledge, Rachel is excited to share her insights and experiences with the community!

Connect with Rachel:
Email her at: [e-mail]
Visit her website: Unmarked Street
Visit her website: The Business of Apparel
Follow on Instagram
Connect on LinkedIn
Listen to her Podcast
Subscribe to her YouTube Channel

Download my Freelance Price List just for fashion (it’s free!): sewheidi.com/price

Creators and Guests

Host

Heidi Weinberg {Sew Heidi}

Heidi (aka Sew Heidi) is a self-taught freelance fashion designer who built a six-figure business without a degree, portfolio, or industry connections. After years of burnout in the fashion industry, she went freelance—and never looked back. Now, she helps other designers ditch toxic jobs, land better clients, and build flexible careers they love. Through her podcast, courses, and resources, Heidi has helped thousands of designers take control of their fashion path and finally get paid what they’re worth.

What is Fashion Designers Get Paid: Build Your Fashion Career On Your Own Terms?

This is a show for burnt-out fashion designers (and TDs, PDs, patternmakers, textile designer and beyond) who want more flexibility in their career while still doing work they love.

You'll learn how to build a freelance fashion business, so you can do the work you love on your own terms. Freelancing in fashion is the only way to get freedom in your day (instead of being tied to a desk).

Whether you want to earn extra money on the side, fund your fashion brand, or replace your salary, the FDGP podcast will help you get there. Listen in for actionable tips and strategies to kickstart or grow your career as a freelance fashion designer, build your confidence, and create the life you want.

Hosted by $100k+ fashion freelancer Sew Heidi, the show features interviews and strategy sessions with successful freelance fashion designers from around the world who've ditched toxic fashion jobs and taken control of their own destinies. This is the only place to get REAL insights from REAL freelancers who have built REAL careers on their own terms. (Formerly the Successful Fashion Freelancer podcast.)

Heidi [00:00:00]:
This bonus episode is a little different than our usual content, but it felt too good not to share. Here's the thing. If you or your clients think you can launch a fashion line with just a few thousand bucks, my guest today, Rachel Erickson, begs to differ, And she did the math and research to prove otherwise. Using firsthand knowledge from her own experience and her clients' experiences, Rachel calculated that a fashion brand needs an initial investment of around $200,000 in order to be profitable by year three. So where do brand founders get all that money? Hint, freelancing is a great way to start. How do these numbers break down, and how do you make sure brands are not throwing money into a black hole? In my conversation with Rachel, she shares where all that money goes, how it breaks out into team and overhead and inventory. She also talks about why so many brands run out of cash and how to plan for success. If you've been dreaming of starting your own fashion brand or you're supporting clients who do, you are going to wanna hear these real numbers before you commit.

Heidi [00:00:58]:
Let's get to it. Okay, Rachel. I'm excited. What did what did you say in your email? You're like, let's just math the shit out of it. Yes.

Rachel Erickson [00:01:07]:
I love to math the shit out of everything, so that's kind of my MO these days. I, yeah, I I just love the numbers. They tell, like, a really clear story, and so we have literally math the shit out of figuring out how to start an apparel brand.

Heidi [00:01:21]:
Okay. And how you get to, like the number you threw out to me, and all this all this whole conversation started on a LinkedIn post. Yeah. Yeah. Of, like someone had posted once. They're like, you can start a fashion brand with 5 to $10,000, and I'm like, ah, hold the brakes.

Rachel Erickson [00:01:35]:
Yeah. No. Absolutely. I think I saw the same post that I commented on her, and I was

Heidi [00:01:39]:
like two ago. Yeah. I I was like

Rachel Erickson [00:01:40]:
I don't know that you should give this advice. It's really bad.

Heidi [00:01:45]:
Oh, yeah. It's really bad. So you, on the other hand, crunched the numbers and came up with 200,000. And I was like, oh, do tell. You did a bunch of research and everything. So let's Yeah. Like, dig into the numbers and the math because I wanna outline this. I think it's gonna be really helpful for, fashion brands as well as freelancers so they can, you know, maybe get a little bit more in tune with some of the support they provide their clients?

Rachel Erickson [00:02:11]:
100%. So what we ended up doing was first starting well, so our company has been in business for about three years. And over that three years, we've been working with a variety of different clients who all have similar goals at the end of the day. And so we started to see these threads of things that were really consistent across the board for everybody, where about five to six years in, they're expecting to be at the million dollar mark. And we were looking at some of these brands going, I don't know how you're going to hit a million dollars if you didn't save any money up front, and you're spending more than you're actually making every single month. So your budget is a little bit upside down.

Heidi [00:02:54]:
Mhmm.

Rachel Erickson [00:02:54]:
So what we ended up doing at that time was starting to put together small business plans for our clients, and then we started to work with some outside people to put together business plans for them. And what we found is, it really depends on that first number that you have upfront that's going to lead to your success down the line. Because you have to have enough capital on hand to be able to buy your inventory, if you're creating custom bespoke apparel, and you have to have enough money on hand to be able to hire a team. That, I think, is the part that a lot of people really believe that they can get away with not doing. And so they end up with these really short budgets, thinking they can just buy a few units at a time. They can do everything themselves. And within a few years The numbers are staggering. We're seeing 82% of brands have to close their doors within the first three

Heidi [00:03:50]:
to five years, because they don't

Rachel Erickson [00:03:50]:
understand how much they need. So I went to work because we had our community starting to ask us, what is that number? What do I need to save? How does my budget break down for the first year, the third year, and the tenth year? And what are those business plans? Can I get a hold of those? We're actually in the process right now of trying to put some resources together that we can share with a wider community on that. And when I was mathing the shit out of it, every single number that I put in other than $200,000 just didn't work. It didn't matter. Now, I can put in more, but most people don't want to raise more than they really need to. And so what we can do is, in your first year, what we like to call year zero. So you're not really even producing anything yet. You are going to need to come to the table with a little bit of extra money because you're probably going to need to work on developing your styles, and you're going to need to work on sourcing a manufacturer.

Rachel Erickson [00:04:52]:
You're also going to want to open up your website, and file your LLC, and get on all the social media channels, and claim your name everywhere. There's a lot of work to do in that first year, and we think minimally you could get away with that with about $15,000

Heidi [00:05:08]:
Andrea Wien Okay. And a lot of sweat equity.

Rachel Erickson [00:05:10]:
Andrea Wien Yes. And a lot of sweat equity. Exactly. Now you could probably get away with doing that in chunks. So maybe in that first half of the year, you just need $5,000 to start interviewing manufacturers, maybe tap into an expert. Heidi, your resources have actually helped us a lot with this research, because you have a lot of information on what freelancers are charging out in the world. And so we've been able to take a good average of that, and figure out, what would it cost to hire someone to help you source a really good manufacturer? In that first six months, you want to be doing that. And then you want to start developing your apparel, so that starting in year one, you're ready to place that PO.

Rachel Erickson [00:05:51]:
And so year zero really comes about all of the logistics. It becomes about getting prepared for starting to purchase inventory. And it becomes about fundraising. Because starting in year zero, you're going to need to put $100,000 into your inventory bank account, and you're going to need to put $100,000 into your general funds bank account. And your general funds are going to go toward business expenses and team, and your inventory bank account is just going to perpetuate purchase orders, essentially forever for your brand. Okay. And we don't really want that money to mix, because we want your inventory budget to be able to be healthy on its own. We don't want to be dipping into that.

Rachel Erickson [00:06:30]:
And so it's a lot easier for us to have our clients separate those funds. And then after year one, you stop dipping into the general fund savings that you originally had, and you start being able to allocate profits to those two funds, and then that should be it. To be honest with you, if you can follow a sales plan, which is someone that you should hire, you should hire a salesperson who knows what the hell they're doing, so that you can be hitting all your sales goals numbers. You need to be hiring a marketing person, and you probably need to be keeping that developer or that sourcing person on board. There's just so much involved in it that I don't think people really understand. Understand. And if you only started with $5,000 I just I don't know where you would get to. And I think and I'd love to hear your perspective on this, but I think the information that's floating out there is meant for drop shipping companies.

Heidi [00:07:28]:
Mhmm.

Rachel Erickson [00:07:28]:
Like companies who don't have to hold inventory. Yeah. Exactly.

Heidi [00:07:34]:
I mean, shall I share my opinion? Yeah. Please. Not a fashion brand. That's like graphic tees. Like, you're putting some graphics on t shirts or water bottles or, like, something. It's I mean, I think a lot of people call it a fashion brand, but Yeah. I don't totally Yeah. Agree.

Heidi [00:07:54]:
So then that that's a different business model. Totally. Yeah. So I love the idea of the two separate bank accounts.

Rachel Erickson [00:08:05]:
Yeah.

Heidi [00:08:06]:
And then and so what how are you, like well, I guess I guess getting ahead of it. My first thought was like, oh, and then as you start making sales, you divvy up specific amount of, like, income profits to each of those bank accounts to keep funding them. Exactly. There's formulas for that, I imagine.

Rachel Erickson [00:08:23]:
Yep. There are formulas for that. So I've got this ridiculous monster spreadsheet that basically calculates out what you're gonna spend every single quarter on inventory. And so the way that that breaks down is, you would want to have a production person helping you if you don't understand how to break that down into, let's say this quarter, your number is $65,000 You're going to place a purchase order for that exact amount. You then need to decide based on the costing that you're getting from your factory, the cost of each unit, the cost of shipping, all of that kind of stuff. How many units of each style am I actually purchasing to reach that $65,000?

Heidi [00:09:00]:
So 65,000, sorry, is your goal your revenue goal? Is that what you're starting with, or no? That's what you want

Rachel Erickson [00:09:05]:
us to spend.

Heidi [00:09:06]:
Allocated to buy inventory?

Rachel Erickson [00:09:08]:
Yes. So that's your cost. Okay. And then once you receive that inventory, as long as you're making a healthy margin on it, and we call healthy really anything above 60% to selling direct to consumer.

Heidi [00:09:20]:
Okay. So as long as you're can you just break that number down really quickly? So if I'm selling something for a hundred dollars or if, let's say, if I buy something, my cost out the door, my COGS, cost of goods is $50. How much am I selling it for to make out 60% margin?

Rachel Erickson [00:09:34]:
Oh, that's a really good question. Let's use some easier math for me. Yeah. Yes. If your buy if your cost for your goods, once you roll everything together, you need to add yields of fabric, you need to add how much it's costing your factory to make it for you, you need to add shipping costs, all of that good stuff. Mhmm. Then you want to come up with a unit price. If your unit price is $40 Okay.

Rachel Erickson [00:09:55]:
At the end of the day, you want to sell it for a hundred dollars. And that will give you a 60% margin. So you're getting 60% of it back. Okay.

Heidi [00:10:04]:
So a little more than Keystone, even for direct to consumer. Yeah. Yes.

Rachel Erickson [00:10:07]:
Okay. Cool. And what that allows you to do is have wiggle room for Keystone or whole sale, so that if you decide to move your selling kind of strategy into either a mixed strategy, a hybrid strategy, or you wanna sell keystone, it leaves room for that, as opposed to coming in at 50% direct to consumer, and then you and then you end up making really short margin if you decide to go Keystone. So what you don't want to do is come in and set a retail price, and then have to raise it a bunch over the years to make up for margin loss. Yeah. Usually, you wanna do the opposite. You'd actually rather set prices higher and, eventually, over time, lower them if you need to or if you can.

Heidi [00:10:50]:
Mhmm. And so so if we have a $65,000 budget for that first order, then we're hoping to turn that into rough math one forty or something.

Rachel Erickson [00:11:02]:
Yes. Yep.

Heidi [00:11:03]:
Exactly. Yeah. Okay. Assuming a % sell through, which nobody most people don't get a % sell through. Like, meaning

Rachel Erickson [00:11:09]:
you sell through

Heidi [00:11:09]:
all your inventory. So how do you kinda think about that?

Rachel Erickson [00:11:12]:
So that's the trickiest part for me because I'm not a sales expert, when it comes to selling inventory of apparel. This is where I really recommend that a lot of your budget goes to hiring a salesperson who knows and who has proven that they can help you sell 100% through your inventory in a certain amount of time. Because for you to be able to perpetuate the profits that you need, so that you don't have to fundraise again, you need to be able to 100% sell through your inventory, and put those profits into the appropriate bank account, so you can keep going, essentially. Ashley Inkumsah:

Heidi [00:11:47]:
Mhmm. Keep funding your team, keep buying more inventory, etcetera.

Rachel Erickson [00:11:50]:
Ashley Inkumsah: Exactly. Yep.

Heidi [00:11:51]:
So, I think we got a little ahead of ourselves there, but I everything you're saying, I'm like, oh, wait. I wanna, like, dig in, nerd out on that part.

Rachel Erickson [00:11:57]:
Yeah.

Heidi [00:11:58]:
So the first two hundred thousand, I'd love to know two things. One is rough other than a hundred goes to inventory bank account, a hundred goes to business expenses like team, general overhead, etcetera. I'd love to break those numbers down a little bit further and Yeah. And see, like, what is that hundred thousand in the business expenses category? Like, how does that break out? I know team is team is typically your your biggest piece of overhead.

Rachel Erickson [00:12:25]:
It is. And it should be. Mhmm. It should be, especially in your first year. Mhmm. We tend to recommend that you're gonna be anywhere from, like, 40% to 50% of that budget is probably going to go toward team in your first year or two. Katie Schoolovs Okay. Ashley Inkumsah: I feel like any good business coach is probably going to give you that advice, is that you want to start hiring sooner than you need to, because the people you bring on should be helping you make money.

Rachel Erickson [00:12:50]:
Instead of you struggling for that first one or two years to figure out how to make it all yourself, you really want to be having people support you with their expertise, to help you make that money and help your bank account grow. We really recommend that your monthly team and expenses bucket come down to about $9,000 a month in your first year. Okay. And so if you're paying for a web domain, if you're paying for certain apps to be able to blast things out on social media, or I'm trying to think what other apps a lot of people need when they're Shopify has Yeah.

Heidi [00:13:28]:
Or little chat widgets or something.

Rachel Erickson [00:13:30]:
Yes. All of those things cost a little bit of money every month. And so you want to include that in your budget, and then you want to work

Heidi [00:13:37]:
into that what you're going to be paying all of your different Either contractors or employees are going to

Rachel Erickson [00:13:37]:
come on. Nine times out of nine times out of 10, you're going to need freelancers to come on and help you, to do very specific things in those first couple of years. And as long as you're keeping your expenses pretty low, and you're putting the right amount of money toward that inventory that you need to be buying, and then you're selling through it, you'll burn through that first hundred thousand dollars in about your first ten to eleven months, with your business expenses and team.

Heidi [00:14:10]:
Mhmm.

Rachel Erickson [00:14:10]:
But by that time, you should have enough profits on hand that you don't then need to keep dipping into savings. You're actually starting to see a flow.

Heidi [00:14:21]:
Okay. So by that first year, you wanna see you've made that you've taken 65 or I guess I'm curious. Where's that 65,000 number come from for that first PO out of that hundred thousand that we have set aside for inventory?

Rachel Erickson [00:14:37]:
Yeah. So that was another I sat for, I think, two days straight. Like, ten hours a day for two days straight, crunching different numbers, trying different numbers to see what was going to work. It's $65,000 twice in your first year. In Q1, you're going to place a $65,000 PO, and in Q3, you're going to place a $65,000 PO. You're going to be selling through as much of that as you possibly can every single quarter once you receive that inventory, obviously. Ashley Inkumsah (3seven fifty seven): Yeah. Andrea Wien But, so yeah, it's $130,000 that you actually place in inventory purchase orders in your first year.

Rachel Erickson [00:15:16]:
And every other number ended up giving me a negative account balance at some point in my first three years. Andrea Mitchell (zero 50 Okay.

Heidi [00:15:24]:
Andrea Mitchell (zero 50

Rachel Erickson [00:15:24]:
Because my profits and what I was making weren't enough to account for what I needed to spend. To keep

Heidi [00:15:31]:
Like placing POs. Exactly. Okay.

Rachel Erickson [00:15:33]:
Ashley Humphrey And unfortunately, if you don't spend enough, you don't make enough. Mhmm. Ashley So it's a game of risk, to be honest. Having a fashion and apparel brand is a huge, huge risk, because you hold a lot of inventory, and in order to really make gains the way that most people want to see, it requires you to spend big money right out the gate.

Heidi [00:16:00]:
Yeah. Okay. So does that numb like, I guess, if I'm pretending I'm a brand Yep. Or maybe even a freelancer trying to help my clients understand their the business side of their their brand a little bit better. Yeah. My head goes straight to, like, well, how would that number vary based off of the size of the assortment that I wanna start with? Or, you know, the retail price that I wanna go out at, like, a $20 item versus a $200 item, like, is that really impact that $65,000 first PO? Or if I wanna start with two pieces versus 12 pieces, like, where where does that come into play?

Rachel Erickson [00:16:44]:
That's a fantastic question. And I think one thing that we try to teach and talk about a lot, at our company is that, number one, a lot of people start really, really ambitiously with their brands, and so they have a 20 piece line that they want to launch right off the bat. What you end up finding is that, number one, if you come out with a 20 piece line right off the bat, you're going to really confuse your customer. They're going to see this huge line come out from you, and a lot of the times we find that we're not putting our best foot forward on all 20 of those pieces. We're splitting our resources way too much upfront. We tend to find that the brands who choose one or two minimum viable products that they want to become really well known for in their community, they succeed a lot faster than if you do more products. Okay. Now, in the way that this pertains to the money, is that if you had 20 styles, the chances of you hitting an MOQ in that $65,000 on every single piece would be tough.

Rachel Erickson [00:17:51]:
It would be really, really tough. Yeah. That's another reason why we actually recommend that you do less styles, so that you can order more of it. Get it out to your customers. Let them know, this is the best freaking t shirt that I could possibly make. I put all of my love and effort into this t shirt, and you should know that it's the best that we can possibly offer to you, so you should buy it. That's gonna say a lot more to your customer than we created all of these 20 pieces. Like, you can buy all this stuff.

Rachel Erickson [00:18:21]:
We don't we don't know what we really stand for yet, but here we go.

Heidi [00:18:24]:
Totally. Okay. Cool. And so okay, so just to like, I'm just trying to, like, wrap my head around the big picture here. So year zero, there's a little bit more sweat equity in DIY, and we're looking at maybe 5,000 a quarter roughly, 10 to 20 for the year for some of these foundational things with, like, getting the domains and URLs and starting to source some of my suppliers and factories, etcetera. Perhaps with the help of someone else, but perhaps, you know, just a lot of sweat equity. And then year year one, which kind of is year two, but year one Yeah. Yeah.

Heidi [00:19:02]:
Is when you're starting to look at this potential $9,000 a month or a hundred thousand a year for a team expense, which you have broken out into designer slash developer Yep. Maybe someone in sales Yep. Someone in marketing.

Rachel Erickson [00:19:20]:
Yeah. And probably a production person. So if your developer

Heidi [00:19:24]:
Okay.

Rachel Erickson [00:19:24]:
Doesn't understand production and sourcing, I would recommend that you also hire that person. There are some people out there who can do both, and so you just need to find the right person for you. Doctor. Okay. Doctor. Year one becomes a lot about interviewing, like doing your research, interviewing, fundraising.

Heidi [00:19:41]:
Yeah.

Rachel Erickson [00:19:42]:
And I will say, when it comes to fundraising, I don't know if, Heidi, if your community's going to like this or

Heidi [00:19:50]:
not, but

Rachel Erickson [00:19:51]:
I actually think one of the best things is to start a freelancing gig while you're fundraising.

Heidi [00:19:56]:
I love this answer, and I recommend this.

Rachel Erickson [00:20:00]:
Yeah. Because bringing that money in, even if it's a side hustle, and it's not the number one thing that you're doing as a job to bring in, you know, money for your family, or or to support your rent and all of your bills. Mhmm. Bringing in that money to help you fundraise is going to be 100% yours. Mhmm. We've watched people try to do things like GoFundMe's and Kickstarters. And the thing with that, that's tricky, is it can be great for marketing, but rarely do we actually see profits from a Kickstarter, because you then have to go actually produce something and deliver it to all those people who purchase from you early. And so you don't actually keep all of that money that you make in a Kickstarter.

Rachel Erickson [00:20:47]:
And it's it can be really, really hard to raise $200,000 profit in a Kickstarter while also making enough to produce the goods that you sold in it.

Heidi [00:20:58]:
Yeah. I'm glad you started talking about this because that was gonna be one of my next big questions before we I, you know, I think there's still other things to dig into in terms of the 200,000. But, like Yeah. I'm like, you keep mentioning fundraising. I'm like, where do I get this 200,000? And Yeah. I it's funny because back when I used to interview brand founders on the podcast, I interviewed a woman who I think she had, like, an $80,000 Kickstarter. And, like, she she, like, fully broke it down behind the scenes on the episode. And she was like, it looked really great on paper.

Heidi [00:21:30]:
But, like, behind the scenes, it was I was still bleeding so much money. Yep. It is it is not as amazing as people make it out to be. So, like, where are you getting $200? I mean, I love the idea of freelancing on the side and, like, building up your own savings. But, obviously, if it takes a hot minute to get to 200,000 plus you have money to live. So, like, you know, part of that is just going to rent or mortgage and food. So, like, where are people really, air quote, fundraising this $200? Like, that is no small amount of cash.

Rachel Erickson [00:22:07]:
It's no small feat. And I would say, freelancing is one of the things that I recommend the most to, because in 2022, when my freelancing company was actually doing really well, we were able to save $25,000 for me to start my own brand. Oh, we've already done that. Yeah. So we kind of we ended up using it more as another experiment, like kind of mapping mapping the shit out of something else. Yeah. Where we learned a lot about the startup process, because I come from a corporate background where I know how to work for others, and I know how to work inside really big million, billion dollar brands, and the processes that they use. But when it comes to helping startups, I didn't quite have that experience.

Rachel Erickson [00:22:51]:
So I wanted to have it. I wanted to learn more about it. And so we used some of those profits to fund an apparel line, see what the experience was like on the back end, and that was very, very valuable. Now, we didn't hire a sales team or a marketing team. We went through the process, then essentially shut it down after we felt like we had learned what it feels like to be on the startup side when it comes to talking to new manufacturers, etcetera, etcetera. But that was a really great way for us to pull in the profits that we needed. Another way that people are doing it is applying for grants, which can be a full time job. I will tell you, if you're looking for grants, it's very, very difficult to even find the ones that you can apply for.

Rachel Erickson [00:23:39]:
And then you have to I mean, filling out a grant application can take a whole day, and I know I've spent days doing that. You can look for investors, and you can put together a really robust business plan, and prove to them, you know, maybe you come with a business plan similar to what we've put together, and you say, In three years, we're going to be profitable, and I'm going to be starting to put away 10% for additional profits, and we can be starting to pay you back as an investor. A lot of people go that route. Some other people will ask for gifts from friends and family, and start to see how much they can fundraise there. And most people will need to do a combination of all of those things to really get to the mark.

Heidi [00:24:21]:
Yeah. And it could take a couple years to build that up, honestly. Absolutely. Do you see a lot of people, like, getting, like, investment from, like, either angel or VC or something? Like, I've I know I I've had one person on the podcast that did it, and it was a while ago. What's her name? Billy White house, and she was more in the fashion tech space.

Rachel Erickson [00:24:49]:
K. Yeah.

Heidi [00:24:50]:
And it was back, like, gosh, in, like, maybe 02/2017, '2 thousand '18. I feel like when there was so much money being thrown around, especially in tech and, she got some funding. I figured what it was, like, some tech legging or something. I can't remember. Oh, interesting. Anyways, it was it was very, like, early on in that scene. Yep. And so I'm just curious.

Heidi [00:25:16]:
Like, are you seeing people nowadays?

Rachel Erickson [00:25:19]:
To be honest, it's funny that you threw out those years, like, '16, '17, '18. That was kinda the last time we saw a lot of great funding, I think, going towards start ups in the fashion industry. Okay. Since then, and especially since COVID, a lot of the funding that's been happening has been in the tech space, like software, AI, all of that kind of stuff has been seeing a ton of funding. Mhmm. And so venture capitalists and angels are really looking toward those kinds of things right now, which has made it tough for the fashion industry. Yeah. I think the numbers are also a little bit staggering, where when we do see people get funded, the percentage of I mean, I hate to say it, but the percentage of white men who are getting funding and ridiculous amounts of funding for their fashion brand is very, very prevalent.

Rachel Erickson [00:26:07]:
Whereas a lot of the female founded companies that we specifically like to help really struggle with even getting in the right rooms. And so the numbers there are staggering in that it is really hard to get traditional investor funding these days. Now, I think there are some great programs that have been built and that people can start to get into, but there's so many people who want to enter the apparel space, and it's a really tight competition for the few programs that are out there.

Heidi [00:26:35]:
Yeah. Do you see people like, and I I I obviously, we all have our own level of risk that we're willing to take when it comes to finances or what have you. I, do you see people, like, taking out traditional, like, business loans and getting those?

Rachel Erickson [00:26:59]:
Yes. We do. Okay. My recommendation there is that if you if well, okay. First of all, caveat. It is very difficult to get a business loan from a traditional bank without being in business for at least two years. Most of them will not even look at you if you don't have two years of tax returns, of business information to hand over to them so that they can make sure they're giving a loan to someone who's responsible with their money. So that's the hard part, number one.

Heidi [00:27:29]:
Yeah. Andrea Wien

Rachel Erickson [00:27:29]:
The hard part, number two, is that you need to then include those loan payments in one of your bank accounts, usually probably in your general funds, because it's going to be coming out of your account every single month. You have to pay back that loan. Andrea Wien Mhmm. Ashley Wien And we have not necessarily attributed for that in our calculation, but it is a way that we're seeing a lot of people get funding in year two and three. Unfortunately, we see a lot of people mishandle their money, and they don't include that payment in what they're spending every single month. And so they get into what we're starting to call the debt spiral, where they're overspending, they're trying to buy inventory every year to make more sales, but then they're not paying their vendors back because they don't have the money for it. They're not making enough sales because they don't have the right sales and marketing team. They have to let people go.

Rachel Erickson [00:28:32]:
And then they have to get another loan, and now they're paying back on that. And it becomes this huge debt spiral, and that's, I believe, why we see 82% of brands closing in the first three to five years. It's Yeah. Almost a % a mishandling of money.

Heidi [00:28:48]:
Yeah. So, I mean, I know, like, on this nice spreadsheet where everything kind of falls into place. Yeah. Got 200,000 going in. And I think you said by year three, you're actually profitable, meaning you're paying all your expenses and there's money left and you're buying all your inventory and there's money left over and including paying yourself. Now that one's tricky too. Get confused with, like, profit. It's like, you should still be giving yourself a base pay, and in profit is extra on top of that.

Rachel Erickson [00:29:17]:
Yeah. And that's something that I don't think most people realize is that in the first couple of years, you might not be paying yourself. And so there is a risk there, and there's a huge asterisk on that, where a lot of us who start small businesses I mean, I'm going to admit right now, I've been in business for three years, and sometimes when we're profitable, I get to give myself a little bit of an owner's paycheck. And there are plenty of months where we struggle a little bit, and my team comes first. I need to make sure that I'm paying the people who work for me. So I don't make money those months. And that, I think, is an unfortunate reality of starting a business until you become profitable. So, yes, in year three, we have in our plan that you are profitable enough to definitely be paying yourself a consistent regular salary.

Rachel Erickson [00:30:11]:
Okay. And we do believe that essentially by year six, when you're when we believe you can be hitting your million dollar year, you will also have an additional profit center left over. And that's the kind of money that you should be setting aside, so that someday you can bring in either a big investor, or someday, very far down the road maybe, you can sell your company and show that it has profits.

Heidi [00:30:38]:
Mhmm. So okay. So I think where I was going with that question originally, which this was that was all really great detail to kind of understand in more depth. So in an ideal world on this spreadsheet, by year three, we're profitable enough that we're paying ourselves regularly, and then by year six, hopefully, hit that million dollar mark. But you mentioned a lot of people just get into this debt spiral. So, like, where maybe in those first three years, do you see the biggest challenge maybe where people are overspending or maybe not selling enough or, like, what's the biggest or the big a couple of the biggest things that are contributing to Yeah. Oh, the train's going the wrong direction now.

Rachel Erickson [00:31:22]:
Yeah. Absolutely. Number one is sales. Just like you said earlier, people really struggle to sell through their inventory in a time frame that they expect. Mhmm. We still talk to a lot of potential brands who come to us and say, we're gonna order all this stuff, and I can't wait to sell out. I'm like, We'll see. I hope you're right, but we'll see.

Rachel Erickson [00:31:43]:
I think that that is the number one thing that also makes this spreadsheet, like you said, a very ideal scenario. Now we can figure out how to slow down the pace of this spreadsheet so that you're not really placing your next purchase order until you've sold through 60% of the inventory that you've already brought in. That does slow down, obviously, how soon you get to the million dollar mark or the $10,000,000 mark. But that's the number one thing, is figuring out how to sell and how to get a community really jazzed about coming to you and buying all of your inventory the way you need them to. The second thing I see, and this is really tough, but I tend to see a lot of startup brands really want to get down in with the community. And so they want to travel constantly to trade shows, to set up pop up stores, to We work a lot in the performance apparel space, so they'll go and travel to different races all throughout the country, or all over the world. And that is one expense that I see blow up budgets faster than anything else, is a travel budget. And it costs probably thousands of dollars every time you're getting on a plane to go do an event.

Rachel Erickson [00:33:02]:
Mhmm. And again, if that's not worked into what you can spend every single month, it will surprise you how fast you're gonna blow through your money.

Heidi [00:33:12]:
Yeah. And maybe you're not quite getting the ROI off of that investment.

Rachel Erickson [00:33:16]:
Like Yeah.

Heidi [00:33:17]:
It might feel really fun and awesome, and, like, you're having this great emotional connection with people in your community, but, it's hard to reap the actual financial benefits of that.

Rachel Erickson [00:33:28]:
Yeah. It is. And we see a lot of people happy to just net zero an event, which is great if that's your goal, and

Heidi [00:33:36]:
you can Andrea Wien You're even. Doctor.

Rachel Erickson [00:33:38]:
Yeah. If you can make that a part of your budget. A budget is really unique. It's super personal. And that $9,000 a month can break down probably a thousand different ways. But if you don't have the expertise to be running a key part of your own business, and you really want to propel yourself forward fast, you are going to need to have experts on hand to help you.

Heidi [00:34:04]:
Yeah. I'm not surprised that it was sales is the number one. I mean, I think that everybody underestimates unless you're in sales and, like, that's part of your career Yep. Past. Or maybe you're just naturally really good, which I don't think is most of us. No. And no offense to us, but especially women, I think.

Rachel Erickson [00:34:25]:
Yeah.

Heidi [00:34:27]:
But and I don't I I posted this once on LinkedIn, and I got a little bit of backlash, but I'll say it because I believe it. Testosterone is is scientifically linked to confidence.

Rachel Erickson [00:34:39]:
Yes.

Heidi [00:34:39]:
And men naturally have higher levels of testosterone and tend to naturally have higher levels of confidence, and they're more willing to maybe be a little bit more assertive to go after the thing or push themselves or or, you know, ask for the sale or what have you. So it's no surprise that you mentioned earlier the white males are getting the money. Yeah. And I think that I mean, I see sales as a struggle for people across the board. Freelancers struggle to sell. Yeah. I mean, my business, I'm essentially in sales, and I have had to learn the very hard way over years, and I'm still learning how to sell well. It is a constant effort, and fashion brands learning how to sell.

Heidi [00:35:24]:
And anyone that goes into the business for themselves, you have to sell. Yeah. And learning how to sell, I think, is like a lifelong process.

Rachel Erickson [00:35:35]:
Yeah. You

Heidi [00:35:36]:
don't just, like, take a course. It is a continual journey. So you mentioned, like, getting someone hiring someone for help with sales. How does like, what does that role look like specifically within a direct to consumer DTC brand? Like, I get it. Yeah. In a b two b brand where you're when you're selling wholesale, like, your sales reps that like, that just makes so much sense to me. How does that role look for a d to c brand?

Rachel Erickson [00:36:05]:
Yeah. It goes hand in hand very, very closely with marketing. And Okay. I think it's important to note that, okay, first of all, I'm also learning sales every day. I say that all the time. I can make you apparel in your sleep, but I am learning sales hardcore, and we're trying to train our team on sales right now too, and sometimes I even wonder if we should bring a male on to help us actually bolster that testosterone that sometimes is needed in that area. Sales and marketing go hand in hand, but they're very different from each other. But in this kind of a role, they really need to be linked to the point where sales needs to be given their key what are KPIs? Key Key Key Key Key Performance Indicators.

Rachel Erickson [00:36:50]:
Yes. Thank you. So they need to be given their KPIs every single quarter. These are the numbers that we need to hit to show our profits properly this quarter. This is what we're bringing in next quarter in the way of inventory, so these are going to be your KPIs in the following quarter. Once we have those numbers, it's up to them to work with marketing, to be reaching your customers on all the different social media platforms, having different promotions or sales, or having different ways to do PR, or have the CEO show up on people's podcasts, or do some sort of appearance on TV even. There are a lot of great ways where sales and marketing can work together in that realm to make sure that they're getting the word out about the great products.

Heidi [00:37:34]:
One

Rachel Erickson [00:37:34]:
of the things that I kind of caution clients on, though, is when you get to the point where you want to start put it doing sales and clearance. And so, again,

Heidi [00:37:43]:
Sales and clearance? Sorry. What what

Rachel Erickson [00:37:45]:
Yeah. Clearance? So if you Like If you're

Heidi [00:37:47]:
starting to clearance? Yeah. Yeah. Exactly. Oh, like, having big sales.

Rachel Erickson [00:37:52]:
Yeah. Exactly. So if your strategy if your sales strategy is every quarter to try to get rid of inventory, you want to be doing a big clearance sale, or you want to be slashing prices on something, or giving a percent off, or if you want to do an ambassador program, and so you want to give influencers your stuff, and you're going to give them 10% off all product, what I caution you to do there is to make sure that when you work in those percentages off, you are still bringing home a profit. Enough brands are putting things on sale, putting things on clearance, and they're essentially bringing no profit in on any of those units that they then sell. That is another thing that can then break your bank and break your budget. It is a very, very tricky industry to be in. Ashley

Heidi [00:38:43]:
Inkumsah: Yeah.

Rachel Erickson [00:38:44]:
Ashley Inkumsah: And it frustrates me when I see people saying how easy it is, and how low of an expense you can use to start an apparel brand. I think it's such an interesting industry to be in because everybody has an opinion on apparel. Right? Everybody on this planet has some sort of relationship with clothes. Even if you're a nudist and you don't wear clothes, you have some sort of feeling about clothes that's made you become a nudist. And so there's a wide array of opinions, and there's also, I think, this general feeling that because it is so prevalent, everybody has it, it's everywhere, we're making so much of it, that it's easy. Mhmm. And everybody can do it, because there's so many brands that are out there. If they can do it, I can do it.

Heidi [00:39:30]:
And everybody needs clothes. So Exactly. Mhmm.

Rachel Erickson [00:39:33]:
So I think there's a really big misconception that it's easy to enter this industry and be successful when I actually argue the opposite. I actually think it's one of the hardest industries to be a part of, to succeed in, and it's an extremely, extremely competitive space. I'm not trying to deter anybody from doing what they want to do, but I think another part of this $200,000 is a key indicator that you're serious about it. If you're willing to put blood, sweat, and tears into raising $200,000 it means that you are going to take this seriously, And you know that it's not gonna be easy, and it is going to be a grind for a little bit. Mhmm. But it will reap rewards in the end.

Heidi [00:40:18]:
Yeah. I wholeheartedly agree with you about how hard of an industry it is. Yes. Yes. Preach it. Because, yes, It is the reality. So if I am, like, I'm pretending I'm listening to this episode, and I'm, like, sheer panic because where in the f am I getting 200,000 from, like, ever or that's gonna take me, like, ten years? I mean Yeah. Do me a service and don't lie to me, but, like, is there a workaround here

Rachel Erickson [00:40:54]:
Yeah.

Heidi [00:40:54]:
To this giant chunk of cash?

Rachel Erickson [00:40:58]:
Yeah. Well, look, we've put business plans together for people who wanted to start with $1,200 And the caveat there is that, to your point, it's all sweat equity at that point. Your $1,200 is only going to buy you a few hundred units in your first year.

Heidi [00:41:15]:
Now

Rachel Erickson [00:41:16]:
that's the money that goes into your inventory fund. You basically don't have a general fund at that point, which means you're doing everything. If you feel like you can do that, and you have a lot of time and a lot of patience to wait until you hit 6 figures, until you want to hit a million dollar mark, or maybe that's not even a goal of yours. Maybe you're like, I just want to try to do this, and I just want to be a little bit profitable. You can start with almost anything. This $200,000 suffices the goals that the majority of people that we've talked to want to achieve, which is to get to a million dollars within the first five to six years, and then get to $5,000,000 within their first ten years.

Heidi [00:42:02]:
Okay. Gotcha.

Rachel Erickson [00:42:03]:
So that's where this number comes from. In order to achieve those kinds of profits, be paying yourself a real salary by a certain amount of time, be bringing in a profit that you can someday sell your company with. Those are all of the different factors that have to go into that $200,000 starting point. So that being said, if you're a marketing and sales expert, and you only need to hire a designer or developer freelancer, that $9,000 can go really, really far, or you can start with $3,000 a month, and your budget can be smaller. So there are so many different ways to judge this, and that's a fantastic question because sheer panic, yes, dollars 200,000 is a lot of money, but we've seen people start with a lot less. It just takes them longer to reach those goals, and it takes a lot more effort from them as the brand owner to do a lot of work.

Heidi [00:42:58]:
Yeah. And I don't wanna plant any seeds, but my guess would be that, potentially, there's more mistakes and hurdles along the way because no offense to any of us. Yeah. I don't truly believe one person can do all these things great. I agree. And so, you know, if you I mean, I I suppose if you have a really big background in apparel and you understand design and development and production and, like, you can you you got a little bit of leg out to really manage all of that fairly well, like, probably more than good enough. But then maybe sales and marketing is gonna be your Achilles heel. Exactly.

Heidi [00:43:38]:
So or vice versa. And you're trying to, like, scrap it on the design development and production side. Yep. I feel like that's probably where you start to see a lot of mistakes. Like, oh my gosh. These protos keep coming back, and they're, like, so wrong. And I don't know. I don't really I don't barely have a tech pack.

Heidi [00:43:56]:
You know, that type of thing.

Rachel Erickson [00:43:58]:
Yes. Exactly.

Heidi [00:43:58]:
So many challenges in production. And then even in the bulk production, I know I'm sure you have stories. I have stories. Yep. Yeah.

Rachel Erickson [00:44:05]:
Yeah. And to your point on that, this is where so in year one, we do expect you to have part of that, you know, 10 to $20,000 budget going toward development. So you're probably working with someone who's building tech packs for you, helping you run fittings. You're maybe paying some development fees to your factory with that amount of money. And if you are trying to do that all yourself, and you don't understand the process inside and out, where we really recommend that you probably do that in about five to six months, and someone can help you do that, you will probably see it go to nine or ten months just for development, because you're going to need to see so many different prototypes. You're going to have a hard time knowing what comments to write to the factory so that they truly understand what to do next. As a small business as well, especially if you don't have the right connections and network in this industry, you're trying to do it yourself, you're going to have a really hard time getting in with the kind of manufacturers who are going to prioritize you, take you seriously Doctor.

Heidi [00:45:04]:
Jooncee

Rachel Erickson [00:45:04]:
(twenty-three 50 seven): and do a good job on your behalf. So all of those factors also have to go into it. And if you choose not to hire someone who has a network, or already has a list of manufacturers that they have relationships with, you are going to need to, again, take that risk that you're willing to allow it to take that much longer. And, yeah, you're going to make a lot of mistakes. Andrea Wien Yeah.

Heidi [00:45:26]:
Okay. And and those the repercussions of those mistakes can be time and money. Yes.

Rachel Erickson [00:45:31]:
A %. Yeah. We we actually have a client on the books now who who keeps saying, you know, we're going through seven, eight, nine, 10 prototypes. Please come help us, because every time I make a prototype, my factory is charging me $200 And so imagine going from 10 prototypes and you're paying $200 on every prototype to all of a sudden you only need four.

Heidi [00:45:53]:
Doctor. Yeah. Doctor.

Rachel Erickson [00:45:53]:
I mean, that's a huge money savings. So there's a lot that goes into having someone professionally be able to come in and help you with that.

Heidi [00:46:03]:
Yeah. Absolutely. I know we're a little bit over time. Do you still have a few more minutes? Yeah. I wanna talk about two more things. Well, one, I wanna definitely talk about you and I'm not sure what you guys are doing. But the the one other question I really wanted to dig into, that we skipped over a little bit earlier was you spent 25,000 into this little startup experiment. Do tell.

Rachel Erickson [00:46:23]:
Yes. Yeah. So in 2022, I was really, really lucky as a a freelancer. So I I started Unmark Street in 2021. I have a long career in corporate apparel, and in 2021, I got I got really sick. I got burnt out so bad. I lost 10 pounds in a month. I was stressed.

Rachel Erickson [00:46:43]:
I was depressed. I was And my body finally told me, you've got to get the hell out. This is not for you anymore. And so my husband and I got to work on building my business plan. And in October 2021, we took this big risk together and said, okay, Rach is going to leave corporate, and she's going to go start her own thing. Now, I was basically in your world, Heidi. I thought I was just going to be a freelancer. I'm a technical apparel fit specialist.

Rachel Erickson [00:47:11]:
So when it comes to cycling apparel, running apparel, yoga apparel, something that you need to really move your body in, that's my bread and butter. So I love to fit garments. I love to work on patterns. Tech packs are kind of the name of the game for me. I started to offer this to my network, and I had so many amazing friends, family, just people who I'd worked with in the past who sent me work, that by month five, I had so much work on my plate. I had to hire other people to come help me.

Heidi [00:47:41]:
Wow.

Rachel Erickson [00:47:43]:
And it was not what I expected, but we quickly became an agency where we were able to bring people in to help me with client work. We were able to bring someone on to help me with marketing. And and we were seeing profits. 2022 was a really good year for us. So we had enough profits that I was able to say to my team, Look, I'm going to take this chunk of money over here. It's always been my dream to start my own brand. Fashion design school. I've been into fashion and magazines and stuff since I

Heidi [00:48:14]:
was a

Rachel Erickson [00:48:14]:
little kid. I've been sewing since I was seven.

Heidi [00:48:16]:
Yeah.

Rachel Erickson [00:48:17]:
And so it was always my dream to start my own brand. I thought that was the thing. Right? I was freelancing to to start the thing, which was my brand.

Heidi [00:48:24]:
Okay. Okay.

Rachel Erickson [00:48:26]:
Ashley Grant (3five 30 Three): And so we put this money in. I learned a lot about the startup process, but like many people, and like I'm now advising to people because of what I've learned, I didn't know sales or marketing. And so when it came to reaching an audience, it was very much like crickets. And we took a really, really long time to sell through a really small PO. And so at the end of the day, a lot of things also evolved with Unmarked Street, and we started an education arm of our business, which we call the Business of Apparel, which birthed the podcast and a lot of free resources that we now do. And that started to become my calling. So we shut down my brand, and we essentially now just call it the experiment that we use to be able to do that. At the beginning, it wasn't like we took $25,000 and we threw it into this experiment.

Rachel Erickson [00:49:24]:
We were just throwing that money away. It was intentioned at the time to go towards something that evolved into a decision, a really key. Sometimes you have to make tough decisions as a CEO and as a brand owner, and that was one of them. Our website is down. We no longer post on social with any of that stuff, and we sold through our PO, and so that is all done. But,

Heidi [00:49:48]:
But you, like, designed, developed, went into bulk production, and sold.

Rachel Erickson [00:49:53]:
Yes. We did.

Heidi [00:49:54]:
Yeah. What an experiment.

Rachel Erickson [00:49:57]:
It was very, very

Heidi [00:49:58]:
interesting. In hindsight, an experiment.

Rachel Erickson [00:50:00]:
Yes. Yes. Yes. It was very interesting. It was very hard. Yeah. And and balancing that $25,000 that I was willing to allocate toward it, and finding a factory that was willing to work with such a small MOQ, because I wasn't able to purchase a lot of items, while putting out a product that I really believed was of the highest quality and fit the body beautifully, was tough. It was really tough.

Rachel Erickson [00:50:29]:
And I was that person who I do know the design process, the development process, and the production process, so I didn't have to hire someone for that. And if I had really wanted to make it work, I would've had to start spending this kind of money to bring someone in for sales and marketing to crush it.

Heidi [00:50:44]:
Andrea Wien Yeah. And you were trying to do the sales and marketing yourself.

Rachel Erickson [00:50:48]:
Doctor. Newcomb Yeah, I was. Even to this day, I'm still learning a lot about those things. Two years ago, three years ago, I was meh. You would have never seen me out there selling it. It wouldn't have been my thing.

Heidi [00:51:01]:
It's cool, though, how we evolve as humans. Right? Yes. Any everything is learnable, and we can always, you know, figure something out. Yeah. Yeah. Like, what specifically I am so fascinated by this. Like, what specifically was the most challenging part of the sales? Like, were you just, like, trying to post on Instagram and, like, buy the thing, buy the thing, you know, like, obviously, more strategic than that, but, like, what was so hard about it exactly?

Rachel Erickson [00:51:28]:
It was a combination of things. Number one, I didn't know how to sell. Okay. So for the longest time, it always felt slimy and sleazy for me to be selling something until I realized and put in a put together enough of a service or a product to be able to know 100% that what I'm selling is actually gonna help someone so much if they purchase this product for me or if they sign on to work with us. Like, I know now that when I sell, it is a service, because I'm truly, truly helping people. And that's a huge mind shift.

Heidi [00:52:00]:
At the

Rachel Erickson [00:52:00]:
time, I didn't have that. And so I would say that was probably one of my biggest downfalls. But the other part of it was time. And we were doing well as a consulting agency, and we were thinking about building an education arm to it, and I was spread so thin. I was still doing some client work, even though I had people helping me with that. I was building a course, an online course, so I was recording constantly all the time. We were trying to keep up with marketing and social media. And then there was also this other business that required all of that stuff as well.

Rachel Erickson [00:52:38]:
And at the end of the day, it just came down to, I'm doing too much. I'm not focusing on a thing that I want to succeed. And I had to make a choice.

Heidi [00:52:51]:
Yeah. It's a lot. It's, I mean, I've been in very similar situations to you. We're, like, trying to do 8,000,000 things. Yeah. And, like, sometimes it's it's the physical time in the day, and sometimes it's also, like, the mental space and weight of it all. Yes. It can be a lot.

Rachel Erickson [00:53:11]:
Yeah. Well, it's hard to shift your brain that often every day. Yeah. If you're thinking about running two different companies. And when I think about it now, like even all the effort that I continue to put into Unmarked Street every single week is more than a full time job.

Heidi [00:53:29]:
Mhmm.

Rachel Erickson [00:53:30]:
But I can't imagine going back to that time where I was trying to do it twice. Yeah. That's it's crazy to me to think about that when I think about it now.

Heidi [00:53:40]:
Totally. Totally. Well, I would love for you to tell us a little bit more about On Mark Street and everything you guys do. I know you mentioned you have a lovely podcast. Courses and a ton of free resources as well as the services that you provide, for your clients. Give us a little rundown.

Rachel Erickson [00:53:55]:
Yeah. So Unmarked Street is our apparel consulting agency. Like I said, we we specialize in performance apparel. So my background is in cycling and running, and I'm a lapsed triathlete. It's been a while since I've actually competed, but that's why I love what I do. And, and we basically come in and we do it for you. So depending on what level of service you need or what kind of help you need, we can help anywhere from the design process, the development process. We're experts in technical design, so that is our number one thing that we sell.

Rachel Erickson [00:54:27]:
We do help with sourcing and production on a lower level. We're looking right now at expanding to actually bring on, like, an expert in sourcing and production onto our team so that we can offer that to people at a more high level.

Heidi [00:54:41]:
Cool.

Rachel Erickson [00:54:41]:
But, but, yeah, we we can kinda go end to end if if that's the kind of help that you need, and it works for your budget.

Heidi [00:54:48]:
Yeah.

Rachel Erickson [00:54:49]:
Our team has over fifty five years of experience working in corporate apparel, and so we bring those kinds of processes into what we do. I'm also a certified project manager, so I can bring a lot of that knowledge into a brand, and really help bolster their processes, their SOPs. We build team manuals, and things like that. At the same time, though, my passion project is really educating people about the fashion and apparel industry, because it is so complex. Just like we were talking about at the beginning, I tend to find that when I search online, like if I go to Google and I say, how do I grow my apparel business? The information that's out there is for drop shipping companies, or it's for brands who are already making millions. And so what I'm trying to do is to help educate startups, students, and industry pros who are in their first ten years of their career, to understand the processes that they need to know so that they can make more money, get raises, get promotions, get the jobs, nail the interview. Those are the kinds of things that we want to help people do. Our Business of Apparel online course is an online array of videos, basically, that I've put together to teach everything that I know on as many subjects as I can.

Rachel Erickson [00:56:04]:
And then we have a community to support that, that we call the board, which comes from the business of apparel. And R and D stands for different things, depending on the day, so we're working on that. We love to have people come and join our free workshops. We have free resources, free downloads. We try to give as much away for free as we can. And then when people come into our community, we really just need to make sure that we service them at the highest level possible. So that's kind of what we're doing right now. We are trying to really simplify 2025 and just go for a few big goals.

Rachel Erickson [00:56:37]:
So this year I'm hosting a workshop every single Friday at 11:30AM mountain time. I'm here in Colorado. If you ever want to come join me and learn a little bit about the secrets behind the billion dollar apparel brands, we're getting some great comments and testimonials. People are saying they're learning more in ninety minutes than they have in the first five years of their career. So I think, we're really pleased about that, and people are more than welcome to come join as often as they want or whenever they went. And, that's where you'll find me this year.

Heidi [00:57:10]:
I love it. Yeah. I love it. It's amazing what you've built and everything you're doing, and what a journey, and how fun. What an adventure.

Rachel Erickson [00:57:19]:
Yeah. Thank you. It's, it's been really fulfilling. I love what I do now. Like, it is a lot of hours, and it's a lot of hard work, but it's so different doing it for myself and, like, a future that I see for this company. And, you know, I wanna be able to hire more people and give good jobs and pay good salaries. There's, like, there's there's so much good that can come out of building a really strong company the way that I want to. So thank you.

Heidi [00:57:45]:
Yeah.

Rachel Erickson [00:57:45]:
I appreciate that.

Heidi [00:57:46]:
Of course. I'd love to end with a question I ask everybody at the at the very end of the episode, which is what is one thing people never ask you about being a fashion freelancer that you wish they would?

Rachel Erickson [00:57:56]:
Oh, good question.

Heidi [00:57:58]:
I mean, I know you run an agency, but it's in

Rachel Erickson [00:58:01]:
the same bucket. Yeah. Yeah. One thing is I wish people would ask more often. Stumped me. I wish people would ask more often if we could really clarify the value that we bring by being the experts that we are in what we are. And I think that this goes for all freelancers. We are all experts in something, which is why we freelance in that area.

Rachel Erickson [00:58:36]:
And I wish more people would pay less attention to the quote that I'm giving them or the price that I'm putting forward, and ask more about the value. Mhmm. Like, what am I actually going to get for this amount of money? I think some people ignore that part of it because they get so hung up on cost.

Heidi [00:58:56]:
On the dollars. Yeah.

Rachel Erickson [00:58:58]:
And if if I'm telling you, you know, I'm gonna come into your business for $2,500 a month, but I'm gonna take enough work off your plate that you're gonna be able to go focus over here, and you're actually gonna make $5,000 more a month by using our expertise, that becomes a really high value. Because then you're two X ing

Heidi [00:59:18]:
Mhmm.

Rachel Erickson [00:59:18]:
What you're actually paying for our services. So I think value and cost are two very, very different things, and I do wish people would focus on that more when it comes to freelancers.

Heidi [00:59:28]:
Yeah. And I imagine you know, because I know you've done some training up on sales. As the freelancer or the agency owner, like, it ultimately is your responsibility to communicate that value, and that is something that

Rachel Erickson [00:59:44]:
Yeah.

Heidi [00:59:45]:
Is so much easier said than done.

Rachel Erickson [00:59:47]:
It is. Yes. Yeah. I've been learning a ton about that over the last year, and we've put together some different presentations that we can show to people, some different ways of explaining that. Some people see it immediately, and so I will say as a freelancer, those are those are the good clients. Those are the ones you want to sign right away, and they see your value without you even having to explain it. And they know they want to buy from you. They would know they want to work with you.

Rachel Erickson [01:00:14]:
Yeah. But there are a lot out there who, regardless of how well you explain it, or put it on paper, or show them a visual, or draw them a diagram, they just can't get over that cost. Totally. And so, yeah, it is it's really, really hard. It's something I'm I'm still learning as much as I can.

Heidi [01:00:34]:
I think we're always I mean, I don't know. I feel like I'm always gonna be learning it, so I I will speak for myself that it's a lifelong learning.

Rachel Erickson [01:00:42]:
Yeah. Well, that's that's good to know. So we're just on the same path together.

Heidi [01:00:46]:
Yeah. We're in it together. Awesome. Yeah. Rachel, this has been lovely. I'm so glad we had that little conversation on Yeah. To this because this was really fascinating and interesting, and I'm sure everybody listening will agree. So thank you so much for coming on.

Heidi [01:00:59]:
And, everybody, I'm sure looks forward to connecting with you and listening to your podcast and taking advantage

Rachel Erickson [01:01:04]:
of your resources as well. Definitely. Thanks for having me, Heidi.