It’s Small Business Week! So we’re featuring some of the small businesses that are taking big steps!

Who is Bond Street? Bond Street provides fast, affordable financing to grow your business. We offer term loans of up to $1 million, with interest rates starting at 6% and terms from one to three years. If you’re interested in capital for growing your business—or just want to say hi—drop us a line. We’d love to learn about your goals and tell you a little more about us, as well.

Who: Kelly Moffat and Laura Moffat
What: Kirrin Finch, a conscientious clothing company that creates menswear-inspired apparel designed to fit a range of female and gender non-conforming bodies.
Where: Brooklyn
When: 2014

Why did you start Kirrin Finch?

“We didn’t grow up wanting to be fashion designers. We were both tomboys, and only really cared about making sure our outfits allowed us to ride bikes and climb trees. But as we grew up, it became obvious that mainstream retailers didn’t cater to us. It was always a hunt to find something that felt right, and we were often forced to make the choice between poorly-fitting menswear and super feminine womenswear. Not being able to find clothes that matched our inner core left us feeling like we were not able to fully be ourselves. And it wasn’t just us. We spoke to countless women, transmen and genderqueer folks who felt the same way. So we decided to quit our jobs (Laura was a pharmaceutical marketing consultant and Kelly was a teacher) and start a clothing company that aimed to fill the gap for gender-defying fashion by creating menswear-inspired apparel designed to fit a range of bodies.”

How did you originally finance your business?

We financed the startup of our business from our personal savings and by doing a Kickstarter campaign. The Kickstarter was in February 2016. Our personal savings helped us with the startup capital, and then we used the Kickstarter to fund our production of our first collection. The Kickstarter was a great way to tap into our personal network of support without any long-term commitment or big financial asks. It was also a great way to test the marketplace before investing a huge sum of money and find out that nobody wanted to buy the product.

How important do you think it is to understand money/finances as a business owner?

Essential, because if you don’t understand the money/finance aspect of it, you will never be able to figure out whether your business will be profitable, what your costs need to be in order to make money and how to make the business sustainable for the long-term. I don’t think you need to be an accountant and get into the nitty-gritty of all the backend accounting, but you definitely need to be able to do calculations that give you an idea of your operating expenses, how much it costs to make your product and therefore what your gross and net margins are.

What do you wish you’d known about money/finances before starting a business?

I wish I had known more about what expectations to have about how much it costs to start a fashion business, what our margins should be and how long we should expect until we become profitable. Also, I think just some basic business accounting could have been helpful such as how to set up QuickBooks, balance sheets, Profit and Loss statements, costs sheets, etc.

Do you think too many people let money get in the way of starting a small business?

I actually think it is more about fear of failure. Yes, money is essential, but I think you can do crowdfunding, enter business plan competitions, get a loan, work part-time while starting your business. Most people I speak to have great ideas, and it is more about the fear of losing stability from a salaried job, which of course is somewhat financial-based, but I also think it is the fear of jumping into an unknown and ambiguous territory.

Which business expenses have you most underestimated?

Sample production can cost a lot if you are trying to make a product that has a unique fit. We spent many months in development for shirts and now pants, and have had many iterations and samples made. Samples typically cost about 2-4 times what a garment will cost in manufacturing, so if you make many samples it can really drive the costs up.

The other cost that was not foreseen was hiring a bookkeeper. Their hours can add up each month and be costly. We wish we could learn how to do it ourselves, so we could save that money each month. But quite frankly, we just decided that neither of us wanted to be the Kirrin Finch bookkeeper!  

How do you cover upfront productions costs without killing your cash flow?

This is very hard in fashion because funding production kills cash flow, and then you have to wait 2-3 months to get it back. It is even harder with e-commerce because you have to wait longer compared to wholesale to get the money back. I think the best way to manage this is to start with smaller production runs and then use to the sales to help expand the size of your future production. A pre-sale model is also something that we’ve seen work for some smaller companies. We used this concept during the Kickstarter and it was a great way to determine what sizes, styles etc to produce. It also helps with cash flow, because you don’t need to produce anything until you have the money in hand.

Is there anything about finance (or a financial concept) that still totally freaks you out (or you just can’t seem to get the hang of)? 

Quickbooks! We really tried hard to do as much “in-house” as possible, but after a 6-week course, and several attempts by both of us, we finally admitted defeat! It is just not intuitive or easy to use. So we hired a bookkeeper because it was sucking our time and felt it was an area we could outsource easily.

What about your business finances/money keeps you up at night?

How are we going to fund our next production run? How are we going to make it to profitability? How can we get our cost of production down? How can we optimize our marketing spend? Should we use sales to entice customers to purchase inventory? If so, how often is the right balance?

Do you have any financial wisdom you’d like to share with other aspiring entrepreneurs?

Know your business inside and out, and that includes the finances. But if you don’t want to get into the nitty-gritty of bookkeeping and accounting, hire someone.

Is there a book you’ve read that has helped you better understand money/ finances?

No books, but I like online courses like Lynda.com or Coursera, and they have lots of resources on understanding basic finances. Also look to your local groups for entrepreneurs like the Small Business Association and SCORE. They often offer free or low-cost courses to help you better understand topics like finances.  

What business person/ entrepreneur would you most like to have lunch with?

I think Sheryl Sandberg. She has defied the odds against women getting to the top in the workplace and continues to be an inspiration to women around the world. 

Looking to Finance Upfront Production Costs?

How to Finance Upfront Production Costs

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