Inc.

Budget Boot Camp

National kung fu champion Sarah Carson spends her days making pretty dresses–a onetime hobby she has turned into a $6 million business. But she had to overcome some tight money squeezes along the way
SELF-STARTER An investment banker and martial artist, Sarah Carson taught herself dressmaking—and then started Leota, a company that would produce the kind of dress she loves to wear but couldn’t find.

UNTIL HER FASHION emergency of 2014, Sarah Carson thought business couldn’t be better. In three short years, the self-taught dress designer and founder of Leota had seen sales skyrocket. Customers loved her brightly patterned dresses, and ahead of its spring release, the New York City company was anticipating its best season yet.

So Carson thought it made sense to double her orders for spring dresses from the previous year: “I’d never seen so many polka dots in my life,” she jokes.

It was the wrong decision. Like many first-time founders still getting a handle on their company’s business cycles, Carson had failed to plan for the delay from when she made her products to when she could deliver them—or, more crucially, get paid for them. She didn’t realize her mistake until after the fabric had been ordered and the dresses made, creating an inventory pileup. The department stores that are

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