How to Begin a Clothing Business
If you’re unsure how to start a clothes business, look no further: we’ve put together a comprehensive guide to assist you.
You’ll find all the information you need on how to start a clothing company here, whether you want to build a brick-and-mortar store, open an internet store, or design clothes and sell them wholesale.
Step 1: Make a business plan for your clothes line
First and foremost, you’ll require a business plan
The concept of developing a formal business plan might be frightening; it can feel like you’re sitting down to write a novel.
But it doesn’t have to be that way. Your business plan doesn’t have to be elaborate depending on the type of investment you’re looking for (we’ll get to that in a minute).
You can definitely get away with a lean business plan if you’re not looking for bank or investor funding.
Determine how you’ll fund your company
When it comes to launching a clothes business, you’ll most likely have to rely on bank loans, investments from friends and family, or your own money, crowdfunding, and generally bootstrapping your venture.
Others chose to bootstrap their clothes business, relying on money from a number of sources. Sara Duke explains, “All the money has arrived in modest amounts as the firm has virtually funded itself.”
“I went to Ryerson and obtained all of the necessary machinery for my own personal tailor business as a student, and when I left my industry job, I had already scheduled my first custom project, for which I received a deposit,” she explains. For the first few months, this and some holiday compensation (maybe $800) kept me afloat. Then, when I launched the collection a few years later, I spent less than $200 on fabric, and it all grew from there.”
One thing is certain: you will not receive venture capital funding, as venture capital firms typically only invest in enterprises that have the potential to generate a large return on investment in a short period of time. Angel funding is also uncommon, as angel investors expect a quick (and large) return on their investment; finally, while small company loans are feasible, they are not very prevalent for new apparel businesses.
Don’t despair if you don’t have as many funding choices as, example, a traditional tech startup. What’s your best bet? Crowdfunding, personal income or loans from family and friends, and bootstrapping are all viable options.
Make market research
For whom are you launching a clothing line? What does your target market look like, and who is your ideal customer?
“Defining your clientele and your line is the most crucial stage to not overlook,” says Amy Olson, designer and owner of Kuhfs.
“Who are you targeting, who are you making these clothes for (they aren’t for everyone), where do you think your line will hang in department stores or boutiques, what is your customer’s price point threshold, what is your line about (everyday style, high end, preppy), what is your line about (everyday style, high end, preppy),” she advises. You must know who your customer is and for whom you are designing these garments.”
Concentrate on growing your brand
Similarly to establishing your market, describing your brand is an essential component of starting a clothes business.
The total image of your apparel firm will be greatly influenced by developing a brand. It’s all well and good to design clothes, but you need to make sure your branding is solid from the start.
Decide if you’ll sell retail or wholesale
Do you want to open your own store (whether online, in a brick-and-mortar location, or both), or will you solely sell wholesale to other retailers?
This will, of course, be primarily determined by your objectives. Do you wish to manage and run a physical store? Do you only want to sell online? Do you have any plans to expand your apparel line into additional boutiques? These questions will assist you in making this decision.
Step 2: Make it legal
What kind of business do you intend to start?
If you’re establishing a clothes business on your own, you’ll most likely form a sole proprietorship, but if you’re working with a partner, you might want to consider forming an LLC or a partnership.
Choose a name for your clothes business
You could have have a name in mind for your clothing line, but don’t worry if you don’t—not it’s uncommon for a business name to require some brainstorming.
Apply for a Reseller Wholesale License, a Business Tax Wholesale Number, and a Tax ID Permit
The particular licence you’ll require may differ depending on whether you’re operating a retail-only or wholesale firm.
Furthermore, the licensing you’ll require will differ by state; in Oregon, for example, company licenses act as a substitute for a sales tax ID because there is no sales tax. For further information about your individual state, go to the website of your local Secretary of State.
Decide how you’ll deal with any intellectual property issues
Is the name and logo you’ve picked for your company something you’d like to trademark?
Make sure you’ve looked into intellectual property and determined whether you need to file for a trademark or copyrights before moving on with your clothes business.
Step 3: Make a list of potential manufacturers and suppliers
Decide whether you want to keep production in-house or outsource it to another country
While locating manufacturers in other countries is typically less expensive, it can be more difficult due to potential language and cultural obstacles.
Georgia Mae adds, “Finding a manufacturer was simple after I realized that making it locally was important to me.” ”Too much production has moved overseas, and I wanted to do everything I could to help the nearly extinct manufacturing sector here in the United States.”
Laurie Elyse of Laurie Elyse Design echoes this sentiment. “Manufacturing enterprises are frequently overlooked by people. “It’s just too simple in today’s ‘faster, cheaper, more society’ to tolerate horrendous working conditions,” she argues.
“Many persons attempting to create lines are wanting to do things as cheaply as possible, and unfortunately, they are never aware of the agony that this causes.”
“To identify reliable sources, search closer to home and spend extra on quality materials and manufacturing,” she recommends. Visit the factory or workroom, collect references, build your own workroom if funds allow, or conduct rigorous background checks.”
Visit a trade expo
Lisa Chu, owner of Black N Bianco Kids Apparel, suggests going to a trade show to see who could be interested in manufacturing your clothing line. “Attending a trade event like MAGIC sourcing will be the first step in locating a manufacturer who will meet your requirements,” she explains. “For attendees who are new to the apparel sector, they provide a matchmaking service.”
Make a lot of research
There is no other way to say it: Finding a manufacturer will take a lot of time and effort.
What kind of clothing line you’re designing, where you’re based, where you’d like your manufacturer to be located, what your price range is, and so much more will determine who you choose.
Step 4: Locate a suitable place
You’ll need to choose a place for your clothes company if you plan to create a brick-and-mortar store.
Make sure to do plenty of research on where your target market prefers to buy, as well as what you can afford, before deciding where to open shop.
Step 5: Selecting a payment method
Create a merchant account with a bank
A merchant bank account is a specific type of bank account that is in charge of receiving and keeping monies from your clients after they have paid for their purchases before transferring them to your account.
If you want to open a merchant bank account, your present bank most certainly has a solution for you. It’s worth mentioning, though, that you can use a service like PayPal to completely avoid the necessity for a merchant bank account.
Select a point-of-sale (POS) system and/or an online shopping cart
If you’re starting a retail firm, all you have to worry about is picking a physical POS (point of sale) system. However, if you’re like most people, you’ll be selling your things both online and in-store—or even entirely online.
Do your homework to figure out what kind of POS system and online shopping cart is best for you; there are a lot of alternatives, and your decision will be based on the amount of transactions you’ll be processing.
Step 6: Selecting a shipping method
If you’re thinking about opening an online store (more on that later), you’ll need to figure out which shipping service you’ll utilize for your clothes business.
When it comes to choosing a shipping option, there are several factors to consider: the pricing, where you’ll be sending (are you exporting your products internationally? ), and the size and weight of the products you’ll be shipping will all influence your selection.
Step 7: Recruiting workers
If you want to open a brick-and-mortar store, you’ll need to hire people. Even if you don’t want to create a physical store, depending on the size of your clothes business, you may find that you need to hire more employees.
Step 8: Market your company and create an internet presence
This final phase is a continuous one: you’ll be working on creating a website (if you haven’t already), setting up social media accounts, and deciding where you’ll focus the most of your marketing efforts.