Looking for a fashion design business plan? You're in the right place.
A clothing label asks a lender or investor for money before a single garment has sold. How much inventory must be paid for up front? Which sales channel carries the first year? What happens to cash if a collection misses? A blank template will not show what a sensible answer looks like.
This article walks through a complete sample plan for a streetwear label in Los Angeles, section by section: the executive summary, the SWOT analysis and, above all, the financials from funding to the five-year balance sheet.
What you will take from it:
- The executive summary: see how to put a label, its channels and its funding ask on one page
- The SWOT and competitor table: learn to describe rivals by category when you cannot source their numbers
- The funding table: see how much of a raise goes to inventory, equipment and reserve before the first sale
- The sales plan and marketing budget: follow how paid cost per buyer links ad spend to the orders in the forecast
- The inventory and cash view: see why inventory turns decide how much cash a product brand needs
- The five-year profit and loss, cash flow and balance sheet: trace how each hire and drop shows up in the numbers
- The sensitivity table and lender questions: see which single input, such as returns, repeat orders or cost of goods, the result depends on most
- The downside case: have an answer ready for a 20% sales shortfall, with the steps the founder takes in response
If you are setting up a fashion label, read this before writing your own. The label is fictional, so keep what fits your collection and change the rest.
In this plan
Looking for a clothing & fashion design business plan template? The Toolkit builds yours with your own numbers.
Executive Summary
Urban Stitch is a Los Angeles streetwear label that designs in its own studio, has garments cut and sewn by nearby contractors, and sells through four channels: its own website, independent retailers, limited artist capsules and paid design services for other labels. Founder Taylor Greene owns 67% of the company and an angel investor owns 33%. The label opens on January 1, 2027 in a 1,600 square foot studio and stockroom near downtown Los Angeles, with its first production run cut and sewn in the fourth quarter of 2026.
The label raises $510,000: $90,000 of Taylor's savings, $320,000 from the investor and a $100,000 bank term loan. Of that, $53,000 buys the first production run, $31,000 equips the studio, $51,300 pays for legal work, collection development and the launch, a $9,600 deposit goes to the landlord and $365,100 stays in the bank as a reserve for reorders, slow-paying retailers and a weak sales year.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $545,900 | $944,098 | $1,281,747 |
| Net income after start-up costs | ($124,444) | ($17,265) | $35,875 |
| Closing cash | $248,960 | $186,879 | $182,444 |
Direct sales through the label's own site bring in 66% of Year 1 revenue. Artist capsules in April and October add 17%, wholesale (shipping from June) adds 8% and design services for other labels add 9%. Years 1 and 2 lose money: a label buys inventory and builds a team before it has a customer base. Operating profit is positive in April and in October to December of Year 1, and the first profitable year is Year 3, at a thin 2.8% net margin. Year 5 earns 6.5%.
The model tests itself against a weak sales year. With revenue 20% below plan, the label cuts Taylor's pay 20% from July 2027, starts its main hires late or not at all, trims marketing and development spend from Year 2, doubles its markdown allowance and pays no distributions. Year-end cash never falls below $120,353, but the label loses money in Years 1 and 2 and earns only $9,428 in Year 3.
The label's position is narrow on purpose: premium streetwear cut and sewn in Los Angeles from fabric with a documented origin, priced alongside other made-in-LA labels rather than against fast fashion. Product pages describe where each garment is cut and sewn and avoid an unqualified "Made in USA" claim, which the FTC reserves for products made with all or virtually all U.S. content. Recycled-content claims state the recycled share of the product, as the FTC's Green Guides describe.
Inside Urban Stitch
Legal name: Urban Stitch, LLC, a California limited liability company. Owners: Taylor Greene, 67%; one angel investor, 33%. Premises: 1,600 square feet of light-industrial space near downtown Los Angeles: a design and sample room, a packing area and a stockroom. Start date: January 1, 2027. The spring run is sewn in late 2026, the first capsule drops in April and the first wholesale shipments leave in June. Stage: pre-launch. The spring collection is patterned and sampled, the lease is in draft and the artist for the first capsule has agreed terms.
An LLC keeps set-up costs low. Counsel may advise converting to a corporation before a later priced investment round.
Purpose
Make everyday streetwear designed in Los Angeles, cut and sewn nearby from fabric with a documented origin, and sell it direct, through independent shops and in limited artist editions.
Goals for the first two years
- 3,000 direct orders in 2027, rising to 4,600 in 2028.
- 14 retail accounts by December 2027 and about 26 a year later.
- Five capsules with named artists by the end of 2028.
- A first profitable year in 2029, with the first owner distribution in 2031.
Four ways the label earns
| Channel | How it is priced | Year 1 share of revenue |
|---|---|---|
| Own website | Tees $58, hoodies $140, jackets $235 and accessories $42 before returns; about $120 per order after returns | 66% |
| Wholesale to independent retailers | About half of retail price; first orders from $750 | 8% |
| Artist capsules | Limited editions at a $110 average piece | 17% |
| Design services for other labels | A fixed package of $4,500 | 9% |
Rules the label operates under
A brand that has contractors sew its garments falls within the Labor Commissioner's definition of garment manufacturing, which covers work done for sale or resale by anyone contracting to have it performed, so the label registers before its first purchase order and renews each year. California's Garment Worker Protection Act (SB 62), in effect since January 1, 2022, also sets duties for parties that contract out garment work, and counsel confirms the label's current obligations before the first order. The label uses registered contractors and records each one's registration number on every purchase order. Fiber content, country of origin and a company name or registered number go on every garment label under the FTC's textile rules.
Streetwear in Los Angeles
A small trade
The Bureau of Labor Statistics put the median fashion designer's pay at $80,960 in May 2025 and projects no change in employment from 2025 to 2035, at about 32,700 jobs nationally. The model brings in the pattern maker and production designer late, at $72,000, and draws $72,500 for Taylor in Year 1, below that median, until the label turns a profit. Taylor's pay and the operations manager's $75,000 are set just above California's 2027 exempt-salary floor of $72,384.
Where the label sits
In this plan's view, sustainable labels often sell plain basics, and large streetwear labels sell graphics at volume. Urban Stitch aims between them: an oversized heavyweight tee, a boxy hoodie or a work jacket with a documented fabric source, sewn within a few miles of the studio. Whether enough customers will pay a made-in-LA premium is the question the first two capsule drops are meant to answer.
Who else a customer could buy from
| Alternative | What it offers | Why a customer picks it | How Urban Stitch differs by design |
|---|---|---|---|
| Established basics labels | Plain, well-made staples | Trust, reviews, easy returns | Streetwear cuts, graphics and limited artist drops |
| Large streetwear labels | Trend-led graphics at scale | Familiarity and price | Fabric and sewing origin stated on every product page |
| Fast-fashion and resale apps | Low prices, constant newness | Cost, speed | Fewer styles in heavier fabrics |
| Other Los Angeles independents | A similar local-made story | Community, local press | Wholesale and design services as extra channels |
Competitor names and prices are left out: each publishes its own, and they change often.
SWOT
| Strengths | Weaknesses |
|---|---|
| Founder with eight years in technical design | No brand recognition yet |
| Four revenue lines, so one slow channel does not stop the label | A small number of cut-and-sew contractors |
| Local production allows small reorders | Local labor costs more per piece than imported goods |
| Opportunities | Threats |
|---|---|
| Boutiques that want a local-made line | Rising ad costs for paid social |
| Other new labels that need patterns and tech packs | Large labels copying a capsule style |
| Repeat buyers as the customer base builds | Overbuying inventory for a style that misses |
Who Buys Urban Stitch
The city-dweller who checks where it was sewn
Aged about 25 to 38, living in a large metro area, buying two or three pieces a year at $58 to $235 each. This customer reads product pages for fabric and origin, and returns pieces that fit badly. Direct sales depend on this buyer.
The collector of limited drops
Aged 18 to 30, follows the collaborating artists, and buys on the day of a drop. Some buy once and never return, so capsules serve as an acquisition channel and a revenue line at the same time.
The boutique buyer
An independent shop owner in California and the Pacific Northwest who wants a local-made line with a story and an opening order small enough to test. The buyer is judged on sell-through at 8 to 10 weeks.
The new label that needs a designer
A founder with a concept and no pattern maker. These clients buy a fixed package: pattern, tech pack, one sample round and grading for up to three styles.
What each one asks of the label
Fit that matches the photo. An origin story that holds up to a question. Delivery on the date promised. For retailers, an order that arrives complete and sells through.
How the Pieces Get Sold
Direct
About 3,000 orders in Year 1, at roughly $143 before returns and $120 after the 16% of order value that comes back. Of those, 2,300 are first purchases and 700 are repeats. Year 2 has 4,600 orders (3,565 first purchases, 1,035 repeats) and Year 3 has 6,000 (3,360 first purchases, 2,640 repeats). Repeats are modeled at 45% of all earlier first-time buyers combined, so growth moves from new buyers to returning ones. That rate is the forecast's least tested figure, and the sensitivity section shows Year 3 at a loss if it is 35%.
Wholesale
A line sheet goes to boutiques in spring. A first order starts at $750. Year 1 brings 22 orders from 14 accounts: 14 first orders averaging $1,900 and 8 reorders averaging $2,175, which is $44,000. As accounts reorder and add styles, the average order reaches about $2,900 in Year 2. New accounts pay by card on the first order and net 30 afterward. Taylor sells in Years 1 and 2, with an independent sales representative on a 10% commission from Year 2. The label reaches about 36 accounts by the end of Year 3.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Average active retail accounts | – | 20 | 31 | 40 | 47 |
| Orders per account per year | – | 2.2 | 2.3 | 2.3 | 2.3 |
Capsules
Each capsule is four styles in a run of about 420 pieces in Year 1, growing to 500 to 650, announced three weeks before the drop to a waiting list. The artist receives 7% of capsule sales. About 85% of a run is expected to sell at full price within eight weeks. The rest is marked down, and the weak-year case doubles the markdown allowance to test a miss. Capsules never reorder, so a drop that misses leaves unsold inventory: the sensitivity section writes off 40% of both Year 1 runs at cost, $15,154. The label runs two capsules in Year 1 (April and October), three a year in Years 2 to 4 and four in Year 5.
Design services
A package is $4,500 in Year 1 dollars and takes about 45 hours of design time. Eleven packages in Year 1 take roughly 495 of Taylor's hours, about a quarter of a 2,000-hour working year. Sixteen packages in Year 2 take about 720 hours, 36% of that year, on top of the label's own collections, wholesale selling and management. Overflow goes to freelance pattern makers, whose hours are paid from the sample and pattern line and not from the 18% direct cost, which covers sample sewing and materials at $810 a package. Year 3 brings 20 packages, 900 hours, and the full-time pattern maker does not start until month 32 (August 2029), so January to July of that year is the stretch in which Taylor's time is thinnest. Demand comes from referrals and from emerging designers who see the finished work.
Building the Audience
Marketing spend and what it buys
The Year 1 budget is $89,000: $19,000 of launch costs paid from the start-up funds and $70,000 of running costs. That is 16% of Year 1 revenue, or 12.8% for the running costs alone. Running costs fall to 7.2% of revenue in Year 3 and 5.5% in Year 5. Of about 2,300 first-time buyers on the site in Year 1, about 1,400 come through paid channels at an average of $50 each, the figure used for paid cost per buyer. The other 900 come from capsule audiences, retailers, press and word of mouth.
| Channel | Year 1 spend | First-time buyers |
|---|---|---|
| Paid social and search | $56,000 | 1,120 |
| Creator fees and product seeding | $9,000 | 180 |
| Markets and pop-ups | $5,000 | 100 |
| Capsule audiences | included in drop costs | 450 |
| Shoppers who find the label in a retailer | – | 150 |
| Organic social and referrals | – | 300 |
| Total | $70,000 | 2,300 |
The $19,000 launch budget covers the site build ($6,000), the lookbook shoot ($5,500), creator seeding ($3,500) and a pop-up weekend ($4,000).
Paid cost per buyer rises as the audience saturates: $52 in Year 2 (about 1,690 of 3,565 first-time buyers, from $88,000) and $56 in Year 3 (about 1,640 of 3,360, from $92,000). The unpaid share of first-time buyers grows from 900 in Year 1 to about 1,880 in Year 2 as a third capsule, 20 retail accounts and repeat press add reach. Years 4 and 5 need about 3,050 and 2,680 first-time buyers, with marketing of $98,000 and $106,000. A 25% rise in paid cost per buyer would add $23,000 to Year 3 marketing and cut Year 3 net income to $12,875.
The first-order test
A first direct order averages $120 net. Cost of goods takes about $44. Payment fees, shipping and packaging, and the markdown allowance take about $14. About $62 is left against the $50 paid cost per buyer, so the first order pays back its acquisition cost with about $12 to spare, before payroll and overhead, and repeat orders carry the profit.
Marketing milestones
- January 2027: site live, studio open, first photo shoot done.
- April 2027: first capsule drops, bringing in 30% of Year 1 capsule revenue.
- June 2027: first wholesale shipments.
- October 2027: second capsule; direct sales of $36,000 and rising into the holidays.
- December 2027: 14 retail accounts; $52,200 of direct sales in the month.
From Sketch to Shipment
The studio
1,600 square feet at about $2 a square foot a month ($38,400 in Year 1), a plan figure to be confirmed with a local broker. About 700 square feet is the design and sample room, 600 is stockroom and packing, and 300 holds the office and a photo corner. The landlord holds a deposit of three months' rent, $9,600. The label stays in the space through Year 5.
A season, step by step
Design and sketch, then pattern and tech pack, two rounds of samples, a decision on which styles go to production, fabric purchase, cutting and sewing at a contractor, then delivery to the studio about eight to twelve weeks after the approved sample. The spring run is sewn in the fourth quarter of 2026 and paid at opening, which the model books in month 1. Contractors set their own minimums; the model uses 100 pieces a style and color for core styles and 60 for capsule pieces.
Contractors and mills
The label uses three to five registered Los Angeles contractors, and no single contractor takes more than 40% of a season's volume. Mills may ask for a deposit on certified fabric; those deposits come from the inventory budget, and contractors are paid within a few weeks of delivery.
Fabric and claims
Fabric comes from mills that provide certificates for organic or recycled content. The FTC's Green Guides summary says a recycled-content claim on a product made partly from recycled material should be qualified (its example reads "Made from 30% recycled material") and should cover only material recovered or diverted from the waste stream. Product pages state the recycled share on that basis and avoid unqualified words such as "eco-friendly"; other environmental claims are checked against the guides before they go live. Because fabric origin varies, product pages say where a garment is cut and sewn and make no unqualified "Made in USA" claim, which the FTC reserves for products made with all or virtually all U.S. content. Garment labels carry fiber content, country of origin and the company name under the FTC's textile rules. Artist collaboration contracts assign each artwork's licence in writing, and the label files its trademark before launch.
Inventory and markdowns
Opening inventory is $53,000 at cost. Core styles reorder when about ten weeks of cover remain. Year-end inventory of $98,987 in Year 1 turns about 2.1 times, improving to 3.7 by Year 5. Aged core inventory goes to a January and July sample sale at 30% to 40% off. Markdowns and write-downs are set at 3% of product sales ($14,892 in Year 1).
Orders out and returns in
Year 1 ships about 3,600 orders, 14 a day over 260 shipping days. At about eight minutes to pick, pack and label an order, plus ten minutes for each of the roughly one order in eight that comes back, that is about 545 hours, against about 870 hours from the part-time associate between March and December. Taylor packs alone in January and February, which bring 135 and 150 orders. The busiest months, April and October with the capsule drops and November and December with the holidays, use at most about 86% of the associate's hours. Year 2 needs about 850 hours for 5,671 orders, 82% of one associate's year; if its monthly pattern follows Year 1, November and December each run about 30 hours over what one associate can give, which Taylor and the operations manager cover, and no seasonal help is budgeted. Year 3 needs about 1,090 hours for 7,243 orders, more than one associate can give, so a second part-time associate joins in month 28; the two together cover Year 5's 10,057 orders and about 1,510 hours at 73% of their time. Shipping, packaging and return handling cost $6.60 an order net of shipping fees collected. About 16% of order value comes back; pieces in good condition return to the site and the rest go to the sample sale.
Who does the work
Taylor alone in January and February. A part-time associate from month 3, a production and operations manager from month 10, a second part-time associate from month 28, a pattern maker and production designer from month 32 and a part-time customer care and content coordinator from month 34.
The Studio Team
Taylor Greene, founder and creative director
Taylor spent eight years as a technical designer at Los Angeles apparel labels, the last three as senior technical designer for a contemporary streetwear brand. She has written tech packs for hundreds of styles and managed sample rooms and cut-and-sew relationships. The $90,000 she invests is seven years of savings.
Where the team is thin
Taylor has not sold wholesale, run paid social at this spend or financed inventory. The model covers these with a production and operations manager in month 10, a commissioned sales representative from Year 2, and a monthly review with the investor.
The investor
The angel investor owns 33%, receives a quarterly report and sits as a board observer. The $320,000 values the company at about $970,000 after the investment. Replacing the $100,000 loan with more equity from the same investor at that price would take the investor to about 39%, which is why part of the raise is a loan. The investor works in retail and offers introductions to buyers; none of them is counted in revenue. The investor's return in the model is a $25,000 distribution in Year 5, of which 33% is $8,250; any larger return depends on a later sale or priced round that the model does not forecast.
If Taylor is out
Taylor holds the creative approvals. The operations manager from month 10 can place reorders, and the pattern maker from month 32 can run a sample round. Until then a freelance technical designer is on a retainer list, and the company carries key-person cover on Taylor.
The bank
The lender holds a personal guarantee from Taylor, on top of her $90,000 investment, and a lien on equipment and inventory. It receives quarterly accounts.
What Could Move the Result
Each row below changes one input from the base case, with no management response, and comes from the same engine as the tables that follow. In every row the costs that move with sales (cost of goods at each line's own rate, card fees, shipping and packaging, markdowns, royalties, commissions and bad debt) move with the revenue of the line they depend on. The cost-of-goods row adds three points to every line's rate. The opening-slip row has the studio open on March 1, 2027 instead of January 1: January and February direct sales ($34,200) do not happen, while rent, pay and every other cost run from January 1 and the first production run is already on hand. The returns row lowers direct net revenue by 9.5% (24% of order value comes back instead of 16%), keeps shipping and card fees at the base-case order counts and adds $1.50 an order for return handling. The repeat row holds first-time buyers at plan and lets repeat orders run at 35% of all earlier first-time buyers combined. The capsule row sells 40% fewer pieces from both Year 1 runs and writes the unsold pieces off at cost. The wholesale cost row raises that line's cost of goods from 66% to 71.5% of the wholesale price in every year. The $25,000 Year 5 distribution stays in every row, including rows in which cumulative net income through Year 5 is below it. Cash figures include the $9,600 lease deposit.
| Case | Net income Year 1 | Year 3 | Year 4 | Lowest year-end cash | Year 3 cover |
|---|---|---|---|---|---|
| Base case | ($124,444) | $35,875 | $48,536 | $182,444 (Year 3) | 2.3x |
| Revenue 10% lower in every line and year | ($152,240) | ($24,137) | ($24,649) | $1,753 (Year 4) | -0.5x |
| Cost of goods 3 points higher on every line | ($140,821) | ($2,577) | $1,014 | $54,082 (Year 4) | 0.5x |
| Wages 10% higher | ($138,237) | $6,164 | $8,901 | $87,448 (Year 4) | 0.9x |
| Rent 10% higher | ($128,284) | $31,795 | $44,336 | $170,564 (Year 3) | 2.1x |
| Opening two months late (March 1, 2027) | ($142,091) | $35,876 | $48,537 | $164,615 (Year 3) | 2.3x |
| Returns at 24% of order value, not 16% | ($149,515) | ($17,322) | ($17,215) | $17,422 (Year 4) | -0.2x |
| Repeat orders at 35% of earlier buyers, not 45% | ($124,444) | ($2,652) | ($13,885) | $88,619 (Year 4) | 0.5x |
| Paid cost per first-time buyer 25% higher | ($141,944) | $12,875 | $24,036 | $105,607 (Year 4) | 1.2x |
| Both Year 1 capsules 40% under plan, unsold pieces written off at cost | ($155,052) | $35,876 | $48,537 | $152,253 (Year 3) | 2.3x |
| Wholesale 30% below plan in every year | ($128,338) | $23,042 | $31,141 | $161,068 (Year 4) | 1.7x |
| Wholesale cost of goods 71.5% of the wholesale price, not 66% | ($126,864) | $23,811 | $32,181 | $153,379 (Year 4) | 1.7x |
The result is fragile. Year 3 net income is $35,875 on $1,281,747 of revenue, 2.8%, so a 10% revenue shortfall, three points of extra cost of goods, a 24% return rate or repeat orders at 35% each turn Years 3 and 4 into losses or close to nothing, and wages 10% higher leave Year 3 at $6,164 with cover under 1.0x. Year-end cash stays positive in every row, but the 10% revenue shortfall leaves $1,753 at the end of Year 4 and the higher return rate $17,422, so either case consumes the reserve unless the owner responds as the weak-year case does. The rows the owner would see first are returns and repeat orders, which show in the first two capsule drops and the first holiday season. The opening slip lowers Year 1 closing cash by $14,432, to $234,528, and the reserve covers it.
What a lender would still ask
- The lease: its term against the seven-year loan, any guarantee the landlord asks for, the $9,600 deposit, and whether 600 square feet of stockroom holds $213,973 of inventory by Year 5 or the label adds third-party storage that the model does not carry.
- Written contractor quotes and costed tech packs behind the 37% direct cost ratio and the 100-piece minimum. Three points more cost of goods takes Year 3 to a loss of $2,577, and wholesale at about the unit-cost table's own 71.5% of the wholesale price, not 66%, takes Year 3 to $23,811.
- Evidence for a 16% return rate and for repeat orders at 45% of earlier buyers, from the first two drops and the first holiday season. At 24% returns or 35% repeats the base case turns to losses in Years 3 and 4.
- Signed first orders from the 14 wholesale accounts before the spring line sheet is final, their payment terms, and what happens to unsold inventory at retailers.
- How the bank values collateral that is mostly seasonal inventory. The lien covers $31,000 of equipment and $98,987 of year-end inventory at cost, so Taylor's personal guarantee carries the loan, and debt service cover is negative in Years 1 and 2. The owner would ask for a covenant holiday through Year 2.
- Why $510,000 is raised when the lowest Year 1 reading on the monthly view is about $248,000, and why the label borrows $100,000 at 10.5% while about half of the $365,100 reserve sits unused. The answer is the weak-year case, whose lowest year-end cash is $120,353 (Year 4), and $93,665 if inventory was bought at plan volume.
- The investor's return: $8,250 of a $25,000 distribution in Year 5, no exit forecast, and why an LLC and a 33% stake for $320,000.
- Sales-tax registration and collection for out-of-state website orders, and the California garment-registration and brand-duty requirements, none of which carries a separate cost in the model beyond the software and licenses lines.
- Key-person cover on Taylor, who carries 495 to 900 hours a year of design services alongside wholesale selling until the pattern maker starts in month 32.
- What the owner cuts first, and when, if Year 1 sales come in 20% short: the weak-year case sets out the order.
Financial Plan: Drops, Inventory and Cash
A single five-year model sits behind every table, monthly through 2027 and yearly after that. Inventory is the cost that shapes it: a label pays for fabric and sewing weeks before a garment sells, and the tables below show what that does to cash.
Funding the first season
| Use of funds | Amount |
|---|---|
| First production run: core tees, hoodies and jackets (spring and fall) | $41,000 |
| First artist capsule run and wholesale samples | $12,000 |
| Studio fit-out: cutting table, sample room, shelving, packing benches | $14,000 |
| Sample machines, dress forms, 3D design software seats, computers | $12,500 |
| Photo corner: camera, lighting, backdrops | $4,500 |
| Garment registration, city business tax registration, seller permit | $1,800 |
| Legal: LLC, investor agreement, trademark filing, contractor and collaboration contracts | $9,500 |
| Collection development before launch: patterns, grading, first samples | $21,000 |
| Launch: site build, lookbook shoot, creator seeding, pop-up weekend | $19,000 |
| Lease security deposit (three months of rent, held until the lease ends) | $9,600 |
| Cash reserve for reorders, the wholesale payment gap and a slow first year | $365,100 |
| Total uses | $510,000 |
| Source of funds | Amount |
|---|---|
| Taylor Greene's savings | $90,000 |
| Angel investor (33% stake) | $320,000 |
| Bank term loan | $100,000 |
| Total sources | $510,000 |
Taylor puts in $90,000 of her own savings. An angel investor contributes $320,000 for 33% of the company, which values it at about $970,000 after the investment and leaves Taylor with 67%. A $100,000 bank term loan runs seven years at 10.5%, with interest only for the first six months; it carries Taylor's personal guarantee and a lien on equipment and inventory, and the rate is a planning figure, not a quote. Equity supplies 80% of the $510,000. Spending splits as $53,000 for the first production run and capsule, $31,000 for studio equipment, $51,300 for legal work, garment registration, collection development and the launch, a $9,600 lease deposit and a $365,100 reserve. The deposit is three months of rent, comes back when the lease ends, and stays inside every cash balance shown. The reserve is sized to the weak sales year below, where the lowest year-end cash is $120,353, and to the same year with inventory bought at plan volumes, where it is $93,665. In the base case year-end cash never drops below $182,444, so about half of the reserve sits idle if sales arrive as planned, and the loan costs $10,381 of interest in Year 1 against that idle cash. A lender will ask why the label borrows at all; the alternative is another $100,000 of equity from the same investor, which at the same price would take the investor to about 39%.
Figures behind the forecast
- A direct order averages $120 after returns. Before returns it is about $143, roughly 1.7 pieces at an $84 average: tees at $58, hoodies at $140, jackets at $235 and accessories at $42, on a piece mix of 44% tees, 26% hoodies, 5% jackets and 25% accessories. Returns take 16% of order value, a planning figure that the sensitivity section tests at 24%. Orders are 3,000 in Year 1 and 8,200 in Year 5, and prices rise 3% a year from Year 2. California sales tax collected is outside revenue; confirm its treatment with the state tax agency.
- Of the 3,000 Year 1 orders, 2,300 are first purchases and 700 are repeats. Repeat orders in later years are 45% of all earlier first-time buyers combined, which makes Year 3 2,640 repeats on 6,000 orders. Paid channels bring about 1,400 first-time buyers in Year 1 at $50 each, about 1,690 in Year 2 at $52 and about 1,640 in Year 3 at $56. Years 4 and 5 need about 3,050 and 2,680 first-time buyers on the same method.
- Wholesale prices are about half of retail. Year 1 holds 14 first orders averaging $1,900 and 8 reorders averaging $2,175, shipping from June. From Year 2 the average order is $2,900 in Year 1 dollars, rising 3% a year and a further 2% from Year 4. Active accounts average 20, 31, 40 and 47 in Years 2 to 5, ordering 2.2 to 2.3 times a year. An independent representative earns 10% of wholesale sales from Year 2, a planning figure.
- Capsule revenue comes from 840 pieces in Year 1 (two drops of 420) and 1,500, 1,740, 1,950 and 2,600 pieces in Years 2 to 5, at a $110 average that rises 3% a year. About 85% of a run sells at full price within eight weeks and the rest is marked down. Artists receive 7% of capsule sales.
- Design services bill a fixed $4,500 package in Year 1 dollars, covering a pattern, tech pack, one sample round and grading for up to three styles, with about 45 hours of design time behind each. The label sells 11, 16, 20, 22 and 24 packages over the five years, which is 495, 720, 900, 990 and 1,080 hours. Taylor does the work until the pattern maker starts in month 32, with freelance pattern makers paid from the sample line for overflow. The 18% direct cost, $810 a package, covers sample sewing and materials.
- Cost of goods is 37% of direct sales, 66% of wholesale sales, 41% of capsule sales and 18% of design services. The direct figure comes from unit costs of about $22.50 for a tee, $47 for a hoodie, $102 for a jacket and $14.50 for an accessory, planning figures that blend to 37% of retail on the piece mix and that the label's first costed tech packs would replace. Wholesale carries core tees and hoodies, whose unit costs above run 39% and 34% of retail (36% together at the direct piece mix). The 66% planning figure, 33% of retail, rests on larger core runs bringing unit costs about 8% below that table; at the table's own costs it would be about 71.5% of the wholesale price, and the sensitivity section shows that case. Domestic sewing and certified fabric make unit costs higher than imported goods. The engine applies the Year 1 blended rate of 38.3% to every year, so a separate line carries the difference once wholesale takes a larger share: $18,627 in Year 2 rising to $69,468 in Year 5. Gross margin is 61.7% in Year 1 and 58.8% in Year 3 after that line. Year 1 contribution after payment fees, shipping, royalties, markdowns and wholesale bad debt is $277,966, or 50.9% of revenue.
- Payment processing takes 2.9% of direct and capsule sales. Shipping, packaging and return handling cost $6.60 an order net of shipping fees collected, counting capsule pieces at 1.4 to an order, which gives 3,600 orders in Year 1. Markdowns, sample sales and write-downs are 3% of product sales, which leaves out design fees. Wholesale bad debt is 1.5% of wholesale sales.
- Opening inventory is $53,000 at cost, produced before opening and paid in month 1. The balance sheet adds 22% of each year's engine cost of goods, so year-end inventory grows from $98,987 to $213,973. Cost of goods including the mix line divided by year-end inventory gives 2.1 turns in Year 1, then 2.9, 3.3, 3.5 and 3.7. Payables are 20 days of cost of goods, as contractors are paid within a few weeks of delivery.
- Receivables are 12 days of revenue. Direct and capsule sales are paid at checkout and wholesale is net 30, which alone implies fewer days; 12 leaves room for retailers that pay late.
- On-costs add 27% to wages for payroll taxes, health insurance, workers' compensation and a retirement match, or 15% for part-time staff. California treats a salaried manager as exempt from overtime only above a floor of twice the state minimum wage for 2,080 hours: $70,304 in 2026 at $16.90 an hour and $72,384 from January 1, 2027 at $17.40. Taylor's $72,500 and the operations manager's $75,000 sit just above the 2027 floor, which rises each year with the minimum wage, and the pattern maker at $72,000 is treated as an hourly employee eligible for overtime. The associate's $23,000 is about 20 hours a week at $22 an hour, above the City of Los Angeles minimum of $18.42 from July 1, 2026. Wages are launch rates for Los Angeles and should be confirmed locally before offers are made; overtime for hourly staff in the November and December peaks is not modeled. Pay raises of 3% a year are a separate line from Year 2.
- Rent is 1,600 square feet at about $2 a square foot a month, $38,400 in Year 1 and rising about 3% a year; check current local listings before signing a lease. Revenue per square foot is $341 in Year 1 and $1,194 in Year 5, which is high only because most of the space is inventory and sample room rather than a shop floor.
- Samples, patterns and fit sessions cost $24,000 in Year 1 for about 16 new styles across two seasons and $35,000 by Year 5, including the freelance pattern-making hours. Trade-show costs and line sheets run from $8,000 to $15,000, photography from $12,000 to $17,000 and professional fees from $14,000 to $17,000. Insurance runs from $8,800 to $13,500, a planning figure for general and product liability and property cover on inventory and equipment that a broker would quote. The licenses line holds the California LLC annual tax of $800, the LLC fee that steps up with gross receipts ($2,500 from $500,000 and $6,000 from $1,000,000), the garment registration renewal and Los Angeles business tax; it runs from $4,000 to $10,100. Confirm the fee schedules with the Franchise Tax Board, the Labor Commissioner and the City of Los Angeles.
- The model taxes profit at the 21% federal corporate rate and a California rate of 8.84%, with early losses carried forward. Its tax base ignores the start-up costs and applies no 80% limit on using federal losses carried forward, so the Year 5 tax is approximate. The LLC could elect S corporation treatment, which moves tax to its owners' returns, so the corporate rates are a cautious estimate; confirm the state rate with the Franchise Tax Board.
- The only distribution is $25,000 in Year 5, shared by the two owners in proportion to their stakes ($16,750 to Taylor and $8,250 to the investor). It is below the $66,034 of cumulative net income after start-up costs and comes out of year-end cash of $248,591. The bank loan runs to term.
Revenue by channel
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Direct sales (own website, net of returns) | $360,000 | $568,560 | $763,848 | $944,116 | $1,107,501 |
| Wholesale to independent retailers | $44,000 | $131,428 | $219,362 | $297,370 | $359,892 |
| Artist capsule drops (limited editions) | $92,400 | $169,950 | $203,056 | $234,390 | $321,896 |
| Design and tech-pack services for other labels | $49,500 | $74,160 | $95,481 | $108,180 | $121,555 |
| Total revenue | $545,900 | $944,098 | $1,281,747 | $1,584,056 | $1,910,844 |
| Growth on prior year | – | 73% | 36% | 24% | 21% |
Direct sales are the largest line at 66% of Year 1 revenue and 58% in Year 5. Wholesale grows from 8% to 19% because it carries no ad spend, and capsules hold between 15% and 18%. Design services fall from 9% to 6% as the label's own lines grow. Revenue grows 73% in Year 2, then 36%, 24% and 21%.
Month by month in 2027
| Month | Direct sales (own website, net of returns) | Wholesale to independent retailers | Artist capsule drops (limited editions) | Design and tech-pack services for other labels | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $16,200 | $0 | $0 | $0 | $16,200 | ($22,856) |
| Feb 2027 | $18,000 | $0 | $0 | $0 | $18,000 | ($21,745) |
| Mar 2027 | $21,600 | $0 | $0 | $1,980 | $23,580 | ($18,302) |
| Apr 2027 | $25,200 | $0 | $27,720 | $2,970 | $55,890 | $1,636 |
| May 2027 | $27,000 | $0 | $11,088 | $3,960 | $42,048 | ($6,905) |
| Jun 2027 | $27,000 | $2,200 | $7,392 | $4,455 | $41,047 | ($7,523) |
| Jul 2027 | $25,200 | $5,280 | $0 | $4,950 | $35,430 | ($10,989) |
| Aug 2027 | $28,800 | $8,800 | $0 | $5,445 | $43,045 | ($6,290) |
| Sep 2027 | $32,400 | $8,800 | $0 | $5,445 | $46,645 | ($4,069) |
| Oct 2027 | $36,000 | $7,920 | $27,720 | $5,940 | $77,580 | $15,021 |
| Nov 2027 | $50,400 | $6,600 | $11,088 | $6,930 | $75,018 | $13,440 |
| Dec 2027 | $52,200 | $4,400 | $7,392 | $7,425 | $71,417 | $11,218 |
April brings the first capsule and $55,890 of revenue, and October to December carry the holiday trade and the second capsule: those three months bring in $224,015, 41% of the year, with October the largest at $77,580. EBITDA, the operating result before depreciation, interest and tax, is positive in April, October, November and December and negative in the other eight months. The monthly view spreads costs evenly and holds no inventory purchases, receivables or payables, so it reads high: its December balance is $301,441, against $248,960 on the annual statements. On its own basis, month-end cash less 12 days of receivables is lowest in September, at about $248,000, and the inventory bought ahead of the holiday trade could take a real low somewhat below that. These are approximate readings.
Studio payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and creative director | $72,500 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Studio and fulfillment associate (part time, about 20 hours a week) | $23,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Production and operations manager | $75,000 | Month 10 | 1 | 1 | 1 | 1 | 1 |
| Pattern maker and production designer | $72,000 | Month 32 | – | – | 1 | 1 | 1 |
| Second studio and fulfillment associate (part time) | $24,000 | Month 28 | – | – | 0.5 | 0.5 | 0.5 |
| Customer care and social content coordinator (part time) | $26,000 | Month 34 | – | – | 0.5 | 0.5 | 0.5 |
| Total payroll incl. on-costs | $137,929 | $213,775 | $280,050 | $362,715 | $362,715 |
Taylor works alone in January and February, packing the 135 and 150 orders those months bring. A part-time associate who packs orders and helps in the sample room joins in month 3, and a production and operations manager in month 10, once purchase orders for two seasons need tracking. A second part-time associate follows in month 28, when order volume passes what one associate can pack, then the pattern maker and production designer in month 32 and a part-time customer care and content coordinator in month 34. Each hire waits for the revenue to carry it, which is why payroll is $137,929 in Year 1 and $280,050 in Year 3. Revenue per full-time equivalent is $218,360 at the end of Year 1 and $424,632 at the end of Year 5. Taylor's $72,500 is already inside payroll, so the profit lines are what remains after she is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $545,900 | $944,098 | $1,281,747 | $1,584,056 | $1,910,844 |
| Cost of goods at the Year 1 blended rate: fabric, cut and sew, trims, labels and packaging; sample labor on services | ($209,034) | ($361,510) | ($490,802) | ($606,561) | ($731,693) |
| Gross profit | $336,866 | $582,588 | $790,945 | $977,495 | $1,179,151 |
| Payroll incl. on-costs | ($137,929) | ($213,775) | ($280,050) | ($362,715) | ($362,715) |
| Rent | ($38,400) | ($39,600) | ($40,800) | ($42,000) | ($43,300) |
| Utilities | ($4,200) | ($4,400) | ($4,600) | ($4,800) | ($5,000) |
| Marketing | ($70,000) | ($88,000) | ($92,000) | ($98,000) | ($106,000) |
| Insurance | ($8,800) | ($9,800) | ($11,000) | ($12,500) | ($13,500) |
| Professional fees | ($15,000) | ($14,000) | ($15,000) | ($16,000) | ($17,000) |
| Software subscriptions | ($13,000) | ($15,500) | ($18,000) | ($20,000) | ($22,000) |
| Card and payment processing (2.9% of direct and capsule sales) | ($13,120) | ($21,417) | ($28,040) | ($34,177) | ($41,452) |
| Outbound shipping, packaging and return handling ($6.60 an order, net of shipping fees collected) | ($23,760) | ($38,554) | ($50,714) | ($61,972) | ($74,708) |
| Samples, patterns and fit sessions for new styles | ($24,000) | ($28,000) | ($31,000) | ($33,000) | ($35,000) |
| Product photography and content shoots | ($12,000) | ($14,000) | ($15,000) | ($16,000) | ($17,000) |
| Trade-show costs and wholesale line sheets | ($8,000) | ($11,000) | ($13,000) | ($14,000) | ($15,000) |
| Artist royalties (7% of capsule sales) | ($6,468) | ($11,897) | ($14,214) | ($16,407) | ($22,533) |
| Cost of goods: effect of the sales mix after Year 1 | $0 | ($18,627) | ($37,041) | ($54,599) | ($69,468) |
| Markdowns, sample sales and unsold-inventory write-downs (3% of product sales) | ($14,892) | ($26,098) | ($35,588) | ($44,276) | ($53,679) |
| Licenses, garment registration renewals, Los Angeles business tax and California LLC tax and fee | ($4,000) | ($5,400) | ($9,300) | ($9,700) | ($10,100) |
| Equipment replacement and studio repairs | $0 | ($3,500) | ($4,000) | ($9,000) | ($4,500) |
| Independent sales representative commission (10% of wholesale sales from Year 2) | $0 | ($13,143) | ($21,936) | ($29,737) | ($35,989) |
| Wholesale bad debt allowance (1.5% of wholesale sales) | ($660) | ($1,971) | ($3,290) | ($4,461) | ($5,398) |
| Annual pay raises (3% a year) | $0 | ($6,413) | ($17,055) | ($33,633) | ($45,524) |
| EBITDA | ($57,363) | ($2,507) | $49,317 | $60,518 | $179,285 |
| Depreciation | ($5,400) | ($5,400) | ($5,400) | ($5,400) | ($5,400) |
| Interest | ($10,381) | ($9,357) | ($8,042) | ($6,582) | ($4,961) |
| Income tax | $0 | $0 | $0 | $0 | ($45,593) |
| Net income before start-up costs | ($73,144) | ($17,265) | $35,875 | $48,536 | $123,331 |
| Start-up costs expensed at opening (legal, garment registration, collection development, launch marketing) | ($51,300) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($124,444) | ($17,265) | $35,875 | $48,536 | $123,331 |
Year 1 loses $73,144 before start-up costs and $124,444 after them. Year 2 still loses $17,265, with EBITDA of ($2,507), because the label has paid for the operations manager and a third capsule before wholesale reaches scale. Year 3 is the first profitable year, and a thin one: EBITDA is $49,317, under 4% of revenue, and net income $35,875, with no income tax because the early losses are carried forward. Year 4 earns $48,536 after the second associate, the pattern maker and the care coordinator have all been on payroll for a full year. Year 5 reaches an EBITDA margin of 9.4% and net income of $123,331 after $45,593 of tax. The step up comes from adding no hire after month 34 while revenue grows 21%, so Year 5 is the part of the forecast most dependent on revenue arriving as planned. Marketing is 12.8% of revenue in Year 1 before launch costs, 7.2% in Year 3 and 5.5% in Year 5.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($224,525) | ($50,146) | $8,815 | $24,873 | $97,315 |
| Studio equipment | ($31,000) | $0 | $0 | $0 | $0 |
| Funding received | $510,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($5,515) | ($11,935) | ($13,250) | ($14,710) | ($16,331) |
| Owner distributions | $0 | $0 | $0 | $0 | ($25,000) |
| Net change in cash | $248,960 | ($62,081) | ($4,435) | $10,163 | $55,984 |
| Closing cash | $248,960 | $186,879 | $182,444 | $192,607 | $248,591 |
Year-end cash reads $248,960, $186,879, $182,444, $192,607 and $248,591, with the lowest point at the end of Year 3. The Year 1 operating outflow of $224,525 is larger than the loss because it includes $98,987 of inventory ($53,000 bought before opening and $45,987 built through the year) and $17,947 of receivables, less $11,454 of payables. Inventory keeps absorbing cash as sales grow, but more slowly than revenue. On a cash basis, operating cash flow of $8,815 in Year 3 does not cover debt service of $21,292, so the reserve pays the gap; Year 4 covers it by $3,581 and Year 5 operations produce $97,315. The $9,600 lease deposit sits inside every balance.
Balance sheet with inventory
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $248,960 | $186,879 | $182,444 | $192,607 | $248,591 |
| Accounts receivable | $17,947 | $31,039 | $42,140 | $52,079 | $62,822 |
| Inventory (finished garments and fabric on hand) | $98,987 | $132,532 | $160,976 | $186,443 | $213,973 |
| Studio equipment (net) | $25,600 | $20,200 | $14,800 | $9,400 | $4,000 |
| Total assets | $391,495 | $370,650 | $400,360 | $440,529 | $529,386 |
| Accounts payable | $11,454 | $19,809 | $26,893 | $33,236 | $40,093 |
| Bank loan | $94,485 | $82,550 | $69,300 | $54,590 | $38,260 |
| Paid-in capital | $410,000 | $410,000 | $410,000 | $410,000 | $410,000 |
| Retained earnings | ($124,444) | ($141,709) | ($105,834) | ($57,297) | $41,034 |
| Total liabilities and equity | $391,495 | $370,650 | $400,360 | $440,529 | $529,386 |
Margins, break-even and inventory turns
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -10.5% | -0.3% | 3.9% | 3.8% | 9.4% |
| Net margin (before start-up costs) | -13.4% | -1.8% | 2.8% | 3.1% | 6.5% |
| Payroll incl. pay raises as share of revenue | 25% | 23% | 23% | 25% | 21% |
| Revenue per full-time equivalent at year end | $218,360 | $377,639 | $284,833 | $352,012 | $424,632 |
| Average monthly revenue | $45,492 | $78,675 | $106,812 | $132,005 | $159,237 |
| Monthly revenue needed to cover operating costs | $53,238 | $79,013 | $100,152 | $123,832 | $135,026 |
| Debt service cover (EBITDA / interest + principal) | -3.6x | -0.1x | 2.3x | 2.8x | 8.4x |
Operating costs are covered when average monthly revenue exceeds the monthly revenue needed in the ratios table. Year 1 averages $45,492 against $53,238 needed, and Year 2 $78,675 against $79,013, so both lose money. Year 3 averages $106,812 against $100,152, Year 4 $132,005 against $123,832 and Year 5 $159,237 against $135,026. Debt service cover is negative in Years 1 and 2, then 2.3x, 2.8x and 8.4x. A lender relies on the reserve and Taylor's guarantee for the first two years. Payroll including pay raises is 25%, 23%, 23%, 25% and 21% of revenue.
A weak sales year: revenue 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $436,720 | $755,278 | $1,025,398 | $1,267,245 | $1,528,675 |
| Net income before start-up costs | ($101,673) | ($38,525) | $9,428 | $22,061 | $42,027 |
| Net income after start-up costs | ($152,973) | ($38,525) | $9,428 | $22,061 | $42,027 |
| Closing cash | $230,927 | $155,242 | $130,852 | $120,353 | $126,316 |
This case cuts every revenue line by 20% in every year, and the costs that move with sales (cost of goods, card fees, shipping, royalties, commissions and bad debt) fall with it. By the end of June 2027 the owner sees the shortfall and responds from July: Taylor takes a 20% pay cut, to $58,000, that she keeps through Year 5 (below the $72,384 exempt-salary floor, so from July 2027 she is treated as an hourly employee eligible for overtime, which is not modeled), the operations manager starts eight months late (month 18), the second associate and the pattern maker start twelve months late (months 40 and 44), the customer care coordinator is never hired and no distribution is paid. From Year 2 marketing, samples, photography and trade shows are each 20% lower and replacement spending is halved; Year 1 marketing, samples, photography and trade shows are not cut, and rent, utilities, insurance, software, professional fees and licenses are not cut in any year. Markdowns and write-downs double to 6% of product sales from July 2027; the model books 4.5% for Year 1, the time-weighted average (weighted by sales it would be 4.9%). On those terms the label ends every year with cash in the bank, at no less than $120,353, and below the base case in every year. It loses $152,973 in Year 1 and $38,525 in Year 2 and earns $9,428 in Year 3. Debt service cover is negative in Years 1 and 2, 1.1x in Year 3, 1.6x in Year 4 and 2.5x in Year 5, and equity ends Year 1 at $257,027. The owner would ask the bank for a covenant holiday through Year 2 and a 1.0x test in Year 3, rising to 1.25x from Year 4. If production had been bought at plan volumes and the 20% shortfall left that inventory on the shelves, with year-end inventory held at the base-case figures, the lowest year-end cash would be $93,665. The case spreads the shortfall evenly and shows year-end positions only, so a missed autumn capsule could take cash lower inside a year.
Sources
- Bureau of Labor Statistics, Fashion designers, Occupational Outlook Handbook: median pay of $80,960 in May 2025 and 0% projected change in employment, 2025 to 2035, with 32,700 jobs in 2025.
- California Department of Industrial Relations, Garment Manufacturers (and Contractors): every person engaged in garment manufacturing must register with the Labor Commissioner. The rules and regulations page extends this to work done for sale or resale by any person contracting to have it performed. The Labor Commissioner's application instructions, an edition dated 2016, list manufacturer fees of $750 and $1,000 for the sales bands used here and a $25 examination fee; fees may have changed, so confirm them with the Labor Commissioner before filing.
- California Department of Industrial Relations, New Labor Laws in California (garment industry): the Garment Worker Protection Act (SB 62), in effect January 1, 2022, covers pay and the duties of parties that contract out garment work. The label's specific duties as a brand are a matter for counsel.
- Federal Trade Commission, Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts: fiber content, country of origin and manufacturer identity on labels.
- Federal Trade Commission, Complying with the Made in USA Standard: an unqualified claim requires a product that is all or virtually all made in the United States.
- Federal Trade Commission, Environmental Claims: Summary of the Green Guides: how recycled-content claims should be qualified. The summary is dated 2012, so confirm the current text of the guides before publishing claims.
- California Franchise Tax Board, Business tax rates: 8.84% for corporations other than banks and financial institutions (page last updated September 24, 2025), and Limited liability company: the $800 annual LLC tax and the fee of $900, $2,500, $6,000 or $11,790 by income band.
- Cornell Law School Legal Information Institute, 26 U.S.C. 11: the 21% federal corporate rate.
- California Department of Industrial Relations, Minimum Wage Frequently Asked Questions: $16.90 an hour from January 1, 2026. Office of the Governor, announcement of July 31, 2026: $17.40 an hour from January 1, 2027. Industrial Welfare Commission, Order 1-2001 (manufacturing): an exempt employee must earn a monthly salary of at least two times the state minimum wage for full-time employment.
- City of Los Angeles, Wages LA: $18.42 an hour from July 1, 2026. Los Angeles Office of Finance, Know Your Rates: business tax of $1.27 per $1,000 of gross receipts on retail sales and $1.01 on wholesale sales.
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