As a Small Business owner, the last thing we can afford to do is throw…
Time to Take Stock of How Much You’re Spending on Fashion
It’s the end of the financial year; time to take stock of how much you’re spending on fashion.
In business, creating a balanced budget is something we aim for, and there are multiple areas we need to be aware of when it comes to allocating resources.
At the end of the financial year, we tend to take a moment or two to reflect on how much we’ve earned as well as how much we’ve spent. Spending too much is always a concern, as is not generating enough income. My question is, “Have you ever included your clothing as part of your annual budget?” And, I guess, an even bigger question is, “Why should you?”
What we wear can have a significant impact on our business, though the impact may not seem obvious. However, when we understand the relationship between what we wear and how it makes us feel, as well as the effect it has on how our clients perceive us and what we are selling; it becomes easy to see that our clothing purchases impact both sides of our budget, the income and the expenses.
It makes sense then that we would want to factor in a clothing budget to our overall business strategy. Creating a budget is part of the work I do with women when we create a personal fashion strategy, and it is even more pertinent for business owners.
There are two elements to consider when it comes to setting your fashion budget.
One is working out what clothes you need to buy over a calendar year, and the other is to understand what value you are getting from the clothes you do purchase. I’ll talk about both of these a little more throughout the article. Having a clothing budget does not mean working out the clothes you need to buy and setting an amount accordingly, it’s actually the reverse. Decide the percentage of your income you have available to spend on clothes and then choose your purchases wisely to ensure value for money. Perhaps, looking at your fashion purchases as an investment as opposed to an expense is a good place to start.
recently wrote that most financial experts are of the same mind when it comes to spending money on clothes. They said that you should spend five per cent of your budget or five per cent of your personal income after tax on clothing a year. What does that actually look like? Well, if you take home $60,000 a year after tax, you could spend $3,000 a year on clothes or $250 a month. Of course, this is just a number, and for you, it may seem too high or too low, the main thing is to realistically assess what you can afford to spend on your clothes each year and stick to it.
There is usually a differentiation between what we wear as business owners as opposed to what we wear casually and yet when all these expenditures come under the one income it’s good to set aside a total amount and then divide up the categories from there. For example, a budget for jeans, t-shirts and sneakers and a separate budget for work dresses, jackets and work shoes. Talk to your accountant about what is tax-deductible and what is not; the Australian Taxation Office is probably not that happy about paying for your Louis Vuitton handbag.
So, these are the kind of questions we need to be asking:
Do you know how much you spend on fashion historically?
In order to understand the pieces, you will need to buy over a financial year, start by tracking past expenditures and taking stock of the current items in your closet. Set aside some time to write down all the pieces you bought in the past year including their approximate value. If you keep track of all your clothing purchases that’s even better; tally them up for a total value so that you can use this as information for the coming year’s budget.
Do you need to implement a system to keep better track of how much you spend?
If you don’t take stock of how much you spend on clothes you may be surprised to see how much you actually do. If you already have an idea, then it could be time to assess whether you really need to spend as much as you do. Alternatively, you may need to put more resources towards clothing in order to create the professional image you are after. Remember, you want an image that reflects the ethos and values of your brand.
What events or significant dates have you got coming up in the year ahead?
Take note of dates and events where you will be in need of a statement piece, such as a speaking appointment, a major presentation to a client or an annual cocktail event. Ask yourself if you can wear something you already have in your closet or if there is a legitimate need for a new item?
What clothing do you need to replace?
You will need to take into account items in your current clothing collection that may need replacing. Seasonal items like a classic sweater can wear out easily if worn repeatedly and it’s important that they look polished. You may also need to replace basic items like a signature suit or dress that you frequently wear as part of your personal brand.
Are you getting value out of the usual clothes that you have been buying?
When it comes to buying new clothing over a year and putting your annual clothing budget to use, it’s important to assess the types of clothes you buy and whether you are getting value for your money. If you are spending $150 on a casual trend t-shirt and cutting costs when it comes to a work suit, now could be a good time to re-evaluate. T-shirts do not require much time or cost to be produced whereas a quality suit takes hours of tailoring and craftsmanship to be created. A well-tailored suit or high-quality dress will go a long way to presenting your business in the right light as well as making you feel your best.
Have a clothing budget as part of your overall business plan to ensure that your dollars are well spent. When you have a definitive amount of money allocated, you are clear on your needs for the year ahead, and you look at this expenditure as an investment in yourself and your business, you will find that you will tend to make better purchases.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
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