A line of clothing is sold either at physical locations or online and is generally designed with a particular target audience in mind. Those who enter the clothing industry and create a clothing line, are thinking about a variety of factors like setting up their company, putting together the design for their products, choosing materials, and, of course, securing a process by which these clothes will be manufactured.
With all of that in place, considerations need to be made for where this clothing line will be made available for sale. That means securing stores and digital marketplace locations to offer their attire.
If you are passionate about clothing and are looking to provide another option for a particular audience, as well as a great idea for a clothing line, then starting one may be something you are considering. Setting up a clothing line business is more than registering it, as there are numerous other aspects to consider. We have put together this 10-step process to help anyone looking to get their own clothing line off the ground.
HOW TO START A CLOTHING LINE
Step 1: Planning A Clothing Line
Every entrepreneurship, regardless of industry and nature, needs to start with a solid business plan. It is good to think of it as a map for a trip. Much like knowing where to go, the map reveals not only the specifics of the venture but also its unknowns. Most importantly, a business plan addresses a business’s start-up and operating costs, its target audience, the price point for offered products, and the business’s name. Now, let’s take a look at how some of those aspects apply to establishing a clothing line.
What Are The Start-Up Costs Of A Clothing Line
The start-up costs for a clothing line depend overwhelmingly on the style of clothing you are designing, and even more pertinently, your volume of production. If you want to sell some hand-painted shirts through an online store, you may be able to get started with less than $1,000, assuming you have a computer and a sewing machine. However, if your aspirations are grander, your initial investment will be more along the lines of $500,000 or more, and that is for a small line of clothing.
That amount would cover the costs of designing the clothes, branding, incorporation fees, marketing, the setup of a manufacturing facility, and a litany of other expenses. If you are going up against other established clothing brands, that price tag is certain to grow significantly.
What Are The Operating Expenses Of Starting A Clothing Line
The operational costs entail the continuous manufacturing and production of your clothing products, marketing efforts, design revisions, and modifications, as well as securing additional outlets to sell one’s clothing.
Who Is In The Target Market For Clothing Lines?
The target audience is likely the most vital component of a clothing line as it requires an answer to the questions of who the clothes are for. Is the line intended for wide distribution to a particular segment of customers, should your products be on racks of all major department stores, should they be geared for bargain outlets geared for customers of modest means, or is it geared for wealthy people and requires the production of only a handful of product pieces monthly?
Before any production gets rolling, it is imperative to know this information and determine if you will be making just a handful of products, or hundreds of thousands.
How Does A Clothing Line Generate Revenue?
Every piece of clothing sold will cost some amount of money to produce. In order to make revenue, it needs to, at the very least, make the money from production costs back through retail sales. For larger clothing lines this means a bulk creation of shirts, shorts, or jeans through a mass manufacturing effort. This could be in the form of wide distribution or in the form of catering to a specific, wealthy clientele through specialty boutiques in fashion markets like Paris or Hollywood.
How Much Can Customers Be Charged?
This aspect is highly dependent on a ton of factors, but generally, if you are selling a t-shirt with a fun graphic or amusing text, it can go for anywhere between $8 and $30. If, on the other hand, you are crafting a one-off designer gown for a red-carpet gala event, the price can be as high as $10,000 or more. In other words, the customer you sell your clothing product to and how much they are willing or able to pay will determine what you charge for your products.
Can A Clothing Line Be Profitable?
When you sell your clothing items in top national retailers, your price point will typically be just a bit over production costs. Even if it’s a little higher, after fees and such, you are likely to see a profit of $1 or $2 for each item sold. A Fifth Avenue tailored suit, however, would likely draw a profit of around $1,000. In other words, the combination of the product type and volume sold will determine the final profit.
Naming Your Clothing Line Business
Choosing the right business name is critical to your company’s healthy start. If you have not yet come up with one, then consider using an online business name generator. If you want to name your clothing line, there are online name generators for those as well. One thing you want to avoid is naming either the business or the clothing line after yourself, especially if you are operating the business as a sole proprietor.
You will need to register your business’s name, but before you settle on anything, no matter how committed you are to it, make sure that you review state and federal trademarks to make sure the name isn’t taken yet. You should review your state’s business records and scour social media for that name potentially already in use. You will also need to verify that a web domain is available for your desired name. If it is, don’t wait to register it so that you get it first.
Step 2: Make Sure All Legalities Are In Order
While you have options regarding the business structure of your clothing line company, most owners opt to establish either an LLC or corporation because it adds a level of liability protection in the event that your clothing line company is sued. LLCs are not expensive to register, even if you pay an LLC service to do so for you.
Step 3: Tax Registration
Operating your clothing line business should be preceded by registering for a host of federal and state taxes. For this, you will need to acquire an EIN, a unique identifier for your company in the eyes of the government. This is the number that will be associated with our taxes and it can register for free in multiple places, including the official IRS website.
Your business structure choice will have other implications as well, including how your business will be taxed. For instance, LLCs benefit from being taxed as S corporations. Your state may have additional, specific guidelines relating to the nature of the clothing business.
Step 4: Setup Business Bank Account And Credit Card
An important way to safeguard your business assets is by setting up a bank account and credit card specifically for your business. Mixing business and personal assets is dangerous because if your business is sued, your personal assets, including your home, car, and other valuables at risk. By separating the two, you are “piercing the corporate veil” and protecting your personal assets in case of a loss. That is before even mentioning that it makes accounting and taxation much easier.
When you learn how to build business credit, you can understand how to secure additional credit lines for your business, rather than to your own name. This will get you higher credit lines, better interest rates, and several other perks. Credit cards specific to a business allow owners to use them to cover expenses specifically for their company while building credit history, which is useful for securing future loans.
Net-30 accounts are very popular, especially among start-up entrepreneurs because they permit a business arrangement in which the company can acquire assets when they do not have sufficient cash on hand, and then have 30 days to pay the vendor for those products. These accounts also get reported to all the major credit bureaus (Experian, Equifax, etc.) so a business’s credit history is tracked and allows for additional credit lines, should they be necessary, in the future.
Step 5: Business Accounting
If you run a business, understanding its financial health is absolutely imperative. By keeping a detailed and accurate account of all expenses and revenue intakes, owners can have a finger on the pulse of their company’s financial performance, while simplifying their annual tax filing at the same time.
Step 6: Permit And Licensing Acquisition
One of the most important aspects of setting up a business is to research and acquire all of the necessary licenses and permits. The results of not doing so will have a negative impact on your operations, resulting in either significant financial penalties, or worse, your company’s demise. Some states require more permits and licenses than others to operate a clothing line. You can learn about these on the SBA reference.
Owners are encouraged to check with the county, town, or city clerk’s offices for additional licensing information, or consult the directory of Small Business Associations.
Clothing in particular is easy to imitate, so business owners need to take precautions in protecting their brand, design, product, and concept. To do so, all of those should be registered with the appropriate copyrights and trademarks. This will have the law on your side in someone’s attempts to push a knockoff of your brand’s products, siphoning away your potential revenue.
Step 7: Insure Your Business
Licenses and permits will ensure that your operation is run legally, but most states require that the business also be insured for its own safety. Obtaining business insurance is essential because if your company suffers a loss, the insurance will protect your finances (to an extent). Insurance policies will vary based on different business structures, types, and how much risk each might incur.
Owners may not be certain what types of risks are associated with clothing lines, so a safe bet is to insure their companies with General Liability insurance, the most common coverage for small businesses.
Another important insurance consideration is Worker’s Compensation insurance if your business has employees. If you are running a clothing company, it is virtually impossible for this not to be the case. In almost every situation, the state of the business’s operation will require that your company is insured with this type of insurance.
Step 8: Defining Your Brand
Your brand is your company’s face and corporate persona. It is generally communicated by a logo. The idea of a brand is to communicate to the public what your business stands for, how it should be perceived, and how it can stand out from its competitors. If you are not sure what your logo should be you can console a beginner’s design guide to provide helpful advice on how to put one together.(you can use Fiverr or Canva)
Marketing & Promotion
To sell your clothing products, people need to know about them. This requires promotion and marketing efforts. Before customers will buy your clothing, they will want to see the designs. For that to happen on a large scale, you will need to invest in photo shoots, then take out full-page ads in large publications, especially those associated with the fashion industry, such as fashion magazines. This will help to get the word out about a new look that your clothing line offers.
You should also leverage social media to create a buzz about your brand. When you communicate with other social media users, try to insert your brand’s name into most conversations. Television ads are also very effective at getting your brand’s name out, so it’s worth investing the money that it takes to air ads for your business during peak television viewing hours for your particular target audience.
Customer Retention
Beyond anything, your clothes have to look great and appeal to consumers. If they like your brand’s style, they will gravitate to try the clothing out by picking it up at stores. At that point, they will form an opinion about the products’ construction and performance. If they approve, they will likely purchase more products from your line.
Step 9: Creating Your Business’s Website
An essential step in defining your brand and putting your logo forth is to set up a business website. Many owners hesitate to create one, fearing they are not technologically apt enough to do so, however, website-building tools have come a long way and even a novice user can simply create a website with WordPress, WIX, Squarespace, Shopify, Weebly, GoDaddy, or a number of other great website building tools with a website building guide in under 3 hours.
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Step 10: Set Up A Business Phone
One of the best ways to keep your business and personal life separate is to set up a phone system specifically for your business. Aside from privacy, it will also help to automate your business, legitimize it, and give it authority. That will mean that it will make contacting you easier for prospective clients as well. There are even companies that can come in and, for a reasonable fee, set everything up for you.
Is The Clothing Line Business Right For You?
A person who starts their own clothing line should certainly be passionate about fashion, viewing clothing as a way of personal self-expression. Typically, those who start clothing lines have an artistic vision and want to utilize their clothing as a medium to express themselves, believing that attire is a method of self-expression for others as well. If you are such a person then you might be a good fit for starting a clothing line of your own.
What Is A Typical Day Of A Clothing Line Entrepreneur Like?
Those involved in the production of a new clothing line have a litany of potential responsibilities including:
- Design or review the forthcoming season’s newest looks
- Using apparel design and color, determine your target demographic
- New designs that provide a look and feel that the target demographic desires at a price point they are willing to pay
- Setting up a brand and marketing it fiercely to generate optimal ROI
- Determine whether the manufacturing process will yield the best result with materials used when generated by a dedicated crew in your inhouse facility or through work at a large production facility
- Keep tabs on designs of industry competitors
- Perpetually research upcoming designs in order to prepare for future years’ styles
- Figure out the price by balancing it with production expenses to assure that profit is generated
What Skills Are Possessed By Someone Who Builds A Successful Clothing Line?
While the clothing line owners may not be solely responsible for handling or aspects of a business, someone working for or with the owner will need to be able to:
- Create fashionable, useful apparel, then convert your design into a pattern to use in the production process
- Know the market needs in detail for each item of clothing you are adding to your collection
- Effectively leverage social media for marketing it
- Drafting a robust business plan that outlines all start-up costs and realistically projects expenses for the next 5 to 10 years.
- Determining whether the clothing line will be sold via a boutique approach or through large-scale retail
- Perform thorough accounting
- Network and retain industry contacts to introduce your clothing line and build buyer awareness of it
- Keep up on changing fashion trends, then adjust the styles of your apparel to meet the newest demands
- Stay ahead in planning by at least a year in order to stay tuned in with the fashion industry
Does A Clothing Line Have Growth Potential?
The growth potential of a clothing line is limitless. Expert designers that craft unique looks and engage in correct marketing strategies, can make millions with their clothing line on an international scale. A more realistic outlook, however, is that a successful clothing line’s items will be featured in the company’s online store and will be found on retail store racks across the nation.
What Is The Next Step?
If everything is in place, you might be wondering what your next step is.
Business Mentor
Any entrepreneur can always benefit from a quality mentor to be their guide and resource for knowledge and advice. When you are new to something, especially as competitive as the fashion business, you need to be able to receive helpful tips, and more importantly, establish a support network when your business faces struggles.
Women’s Business Resources
Many resources geared specifically at women entrepreneurs are available through helpful outlets like the Startup Savant series by Women In Business. These offer women entrepreneurial guidance in terms of funding, support, events, etc. on both personal and professional levels.
What Are Some Good Insider Tips For Those Starting Their Clothing Line?
The key to selling your clothing product is recognition. One of the biggest factors in terms of being recognized and admired is your company’s brand. You likely have noticed that some of the most successful brands are endorsed by famous athletes and Hollywood celebrities. That is because they are known names that are admired by many, so if their name is tied to a product, people are more likely to recognize the brand that they are familiar with.
Using a popular location is another helpful way to advertise your brand name. The key is to start planting the seeds of your brand into people’s minds, regardless of the method, before the first piece of apparel is even available in stores.
Building A Team
Before you produce a product, and even prior to purchasing fabric for your first round of production, it is imperative to have a design team fully put together. At the start, your marketing team should be secured first as they will start the testing of early apparel pieces and getting your brand name out there. As you work on building your brand’s name, you can start putting your manufacturing team together in preparation for the clothing line’s initial run.
Frequently asked questions:
how to start an equestrian clothing line?
Starting an equestrian clothing line requires careful planning and execution. Begin by researching the market and identifying your target audience. Develop a brand identity and create a business plan that includes budgeting, design, manufacturing, and marketing strategies.
how to hire models for your clothing line?
To hire models for your clothing line, start by deciding on the look you want to achieve and the demographics of your target audience. Next, you can reach out to modeling agencies or directly contact freelance models through social media platforms.
how to start a golf clothing line?
Starting a golf clothing line involves researching the market and identifying a unique niche, creating a brand and designing quality golf apparel, and building relationships with suppliers, manufacturers, and retailers. You may also need to obtain licenses and permits and establish an online presence and marketing strategy to promote your brand and products to potential customers.