First collection budget and cash flow

Your collection may be profitable on paper and still stop because the cash was not available at the right time. The budget protects your project from this.

Budget lines

1. Design, tech pack and patterns.
2. Samples, often more than one round.
3. The first payment to the factory. A deposit before production starts is usual, then a second payment before or at shipping. Negotiate the terms and write them down.
4. Inspection, shipping and duties.
5. Photography, marketing and launch.
6. A contingency reserve. It is wise to make it a fixed part of the budget that you touch only in an emergency.

A cash timeline

Draw a monthly table: when money goes out, and when sales start to cover it. You may pay within weeks and not collect until two months after the goods arrive. That gap is what needs funding.

Exercise

Fill in the budget and cash flow sheet from the toolkit for your collection. If your means do not cover the amount, go back to module two and shrink the collection, not the quality.