Most business plan templates are written for any business at all. A tailoring plan has special questions. How many hours can your workroom really sell? What does one piece cost? How long does the money sit between buying cloth and collecting the balance? Answer those honestly and the rest becomes easy to write.
Pick the right length
The US Small Business Administration describes two formats. A traditional plan suits you if you want detail or plan to ask a bank for money, and lenders commonly request it. A lean plan suits a simple business, or one where you expect to change the plan often.
If you are borrowing, write the full version. If the plan is for you, a few pages will do, as long as the numbers are in it. The sections below work for both. For a lean plan, write a few lines for each.
Executive summary
Write this last. In half a page, say what you make, who buys it, where you work, what you need, and how the money comes back. A reader should be able to repeat your business in one sentence after reading it.
Services
List what you sell, in the same words as your price list. Separate work made to order from stock made for sale, because they behave differently. A customer order comes with a deposit. A batch for stock ties up your money until the pieces sell.
State what you will turn down as well. It shows you have thought about capacity. If you are still choosing, our list of tailoring business ideas may help.
Market and customers
Describe your likely buyers plainly: who they are, what they buy, how often, and when in the year. Seasons matter in this trade. Weddings, school terms, religious holidays and graduation dates can all pile work into a few weeks.
Use evidence you gathered yourself. Ask people in your area where they go now and what annoys them. If a lender reads "everyone needs clothes", the plan loses their trust straight away.
Competition
Name the alternatives your customer has: other tailors nearby, ready-made clothes, and doing nothing. For each local rival, note their prices, lead times and finish. Then say in a sentence why someone would pick you. Choose a reason you can keep up, such as a specialism, a fitting process or dates you meet.
Operations
This is where a tailoring plan earns its keep. Set out how a job moves through your shop, from order to fitting to cutting to sewing to pressing to handover. Then work out what the workroom can produce.
Example only: one tailor sells 120 hours a month. A shirt takes three hours, so the limit is 40 shirts a month (120 divided by 3). This plan assumes 30, which leaves room for fittings that overrun and for mistakes.
Cover these too: where you buy fabric and trims, which work you send out, and how you will handle a machine that breaks in your busiest week.
Staffing
Show who does what, even if every line says your name. Add the point at which you would hire, and what that person would do. Cutting is usually the last job an owner hands over, because a cutting mistake ruins cloth. If you plan to pay by piece or by salary, say so and show the cost.
Cost per piece
Show how you reach a price for your main garments. Include material, a wastage allowance, labour, outside work and a share of overheads. Our guide to calculating garment cost walks through each part.
Then turn it into a monthly figure. Example only: 30 shirts at a price of 120 bring in 3,600. Material at 30 a shirt comes to 900. That leaves 2,700 to pay wages, rent and every other cost, plus any profit.
Cash flow
A workshop can show a profit on paper and still run out of cash. Business Victoria's cash flow guidance explains the job of a forecast: it shows whether you can cover your running costs, and when more money is leaving than coming in.
Lay out each month: cash in hand at the start, money in, money out, and cash at the end. Count money when it really moves. A deposit counts on the day you take it. A balance counts on collection day, which may be weeks away.
| Month (example) | Start | Money in | Money out | End |
|---|---|---|---|---|
| 1 | 2,000 | 1,500 | 2,400 | 1,100 |
| 2 | 1,100 | 2,200 | 2,400 | 900 |
| 3 | 900 | 3,000 | 2,600 | 1,300 |
| 4 | 1,300 | 3,400 | 2,600 | 2,100 |
In this example, the figure that matters is 900, the lowest point. It tells you how much buffer you have if a month goes badly. If your own forecast dips below zero, you need more starting money, larger deposits or lower costs. Run it twice: once with your expected sales, and once with sales a quarter lower.
Funding request
If you need money, say how much, what it buys, and how it gets repaid. List equipment item by item with real quotes. The SBA's funding guide says to work out your startup costs first, and suggests having a business plan, an expense sheet and financial projections for the next five years before you approach a lender. Check what your own bank wants, because requirements differ.
Growth plan
Keep this short and tied to numbers. Write down the trigger for each step. For example: when orders stay above capacity for three months, hire a machinist. When alterations bring in a steady income, add a counter in a shared space. A trigger turns a hope into a decision you can check later.
Keep the plan alive
Look at the plan each quarter and compare it with what happened. Were the hours per garment right? Did balances come in on time? Your first version will be wrong in places. Finding out which places is the point.
The sums get far easier when job costs come from the workshop itself. Tailoq's tailoring ERP builds cost per piece from issued material, labour and outside work, and shows the balance to collect. Early on, a good spreadsheet can do this job. Our comparison of ERP and spreadsheets explains when each one fits.
See what a tailoring ERP covers, from job cost to the balance still to collect.
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