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What does a small brand spend money on?

  • By Catherine Clavering
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What does a small brand spend money on?

Recently a little discussion happened on tumblr about whether prices are ridiculous, because how can a swimsuit possiby cost $90 (about £50), even if it's plus size? A few of you said you're be interested in what bills we have other than the obvious garment and labour costs, so here it is, a Rough Guide To Small Brands Bills!

As it happens, my accountants have yelled at me for my VAT breakdown, so here's the list of things we spent money on in the last month and a half or so.

The accountants themselves. You better believe they always get paid, but trying to organise the taxes and payroll for even a small business is a headache otherwise. It's pretty headachy even with them.

Software/IT: for managing staff, for managing projects, for editing pictures, for sending you emails, for our domain names, for our server, for shop software, for bandwidth freshly piped from Yorkshire. All small bills individually, but they add up.

Burlesque performers. We thought probably some cash would help them turn up  at our show; I gather it was mostly spent on taxis because it can be a real bummer hauling stage props across central London on the tube when you're also trying to cover yourself in pre-show glitter body paint and curl your hair.

Events are great but they do rather strain the cashflow.

Phone, phones, phones, and we don't even like talking on the phone so I don't know how this happens.

Couriers and post. Don't even talk to me about this.

Swarovski crystals. These are inexplicably compulsory in fashion.

Sampling and development. As previously discussed, making the first of a thing costs an amazing amount of money. I think we're at over £1000 now on the overwire bra and it's nowhere near ready for production (still stuck on overwire component).

Advertising. Mostly facebook ads as they work for us, though this month we also tried a tiny bit of Twitter.

Food. It seemed unwise to leave a team of 20 without foor for the whole day of the show, in case they went cannibal, so there's a list of food items including "Booze for make-up artists" which I am sure the accountants will be thrilled about!

Insurance. Because, like ASOS, we fear fire, burglary and acts of god (also flooding in Sheffield, but we're on a hill). Plus, we're obliged to have employers liability insurance and public liability for events - even for trade shows. We also pay Morgana's public liability and Jess's (specifically excluding fire! We are not allowed fire).

Implied nudity is insured, also accidentally hitting someone with a feather fan, but not fire.

Goods, goods, goods. The largest payments are always for things we actually sell. Well into the 6 figures over the course of a year.

Photography. We actually pay for ours. I am aware that there are many photographers doing one offs for free, and we could do the rounds . . . but Morgana's imagery is perfect for us so why would I want to risk anything else?

Venue: Unusually, as we don't do events very often! But for a really good venue you have to pay.

Fabric: for our UK runs. Mostly powernets, I think.

Labels and swing tickets - these are such a small things but labels are legally required, and swing tickets are essential for the brand in stores - and then you end up ordering 3000 of them and think, why does one small box cost so much money?

Debts. Yes, we have them (or rather I do), we have some old debt from setting up and some less old debt from the repeated swins and roundabouts of the recession, and it's getting paid off.

Travel. I try to avoid it but we have to get around somehow, mostly by train.

Tax. Corporation tax (20% off any profit you show, which is hard because showing a profit and actually having that cash in the bank are really very different things), VAT (sales tax, currently also at 20% of everything we sell to most of you, probably the one I hate the most, though because we export a surprising amount, we sometimes get a refund) and business rates (because we're tiny this ended up at £24, thankfully, as we'd have really struggled to pay the full rate which was in the 5 figure region).

Electricity. Yes, offices have the same bills as homes. No love to Npower at all, who originally "estimated" us as spending over £1000 a month on this. This caused some snorting at my end.

Wages! Yep, everyone has to get paid. That's 3 full time people, one intern (radically, we pay the intern), and one part time press person, plus sometimes temps.

Card processing and banking fees; you know how if someone pays you on paypal, then paypal quite often take a percentage on it? Well, we have to shell out for two merchant numners - to allow us to take cards - then a card machine for the wholesale orders, plus a "virtual terminal" for the online payments,  and then they take a percentage of everything we get paid. Unlike paypal, that doesn't get taken out before you get the cash, which can be a bit unfortunate if I don't mentally deduct about 2% from everythingc oming in to the bank account and set it aside to pay back to the card processing people.

So basically this is why when you price up a garment its goes (fabric plus components plus labour) multiplied by at least 2, because otherwise it's quite easy for it all to go very wobbly.

So mostly it's really boring! Anything you didn't expect?

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