Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 27, 2022 Updated on November 10, 2023
$3,550 - $8,800
$78,000 - $390,000 p.a.
Time to build
1 – 3 months
$31,000 - $156,000 p.a.
Fashion is big business, and fashion design is the dream field of countless creative types. The global apparel industry is massive and projected to expand by more than two-thirds by 2030. If you’ve got an eye for design, you could launch your own clothing brand from the comfort of your own home and, with a bit of luck and hard work, build your company into a household name.
But before you start pencilling designs, you should understand how to launch a business. Fortunately, this step-by-step guide has you covered with all the information you need to start a successful clothing brand.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Average level of education –The average fashion designer has a bachelor’s degree.
Average age – The average fashion designer in the US is 38 years old.
How much does it cost to start a clothing line business?
Startup costs for a clothing line range from $3,500 to $9,000. Costs include a computer, clothing design software, and samples of your clothing from the manufacturer.
To keep your costs low, you should find a white label manufacturer that offers drop shipping. They will produce your clothing orders on-demand and ship directly to the customer, cutting your inventory costs to near-zero. The manufacturer may also have tools to help you create tech packs, which are basically specifications for all your clothing products.
If you want to hone your design skills, you can take online fashion design courses on sites like Udemy. You’ll need a handful of items to successfully launch your clothing line business, including:
Clothing design software
Setting up a business name and corporation
$150 - $200
Business licenses and permits
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
$800 - $1,400
$200 - $300
Clothing samples from the manufacturing
$1,000 - $3,000
$3,550 - $8,800
How much can you earn from a clothing line business?
Clothing prices have a huge range. Your prices will depend on the materials used and your brand identity – high end, affordable, or somewhere in between. These calculations will assume an average item price of $50. Your profit margin after the cost of manufacturing should be about 40%.
In your first year or two, you could sell 30 items a week, bringing in $78,000 in annual revenue. This would mean $31,000 in profit, assuming that 40% margin. As your brand gains recognition, sales could climb to 150 items a week. With annual revenue of $390,000, you’d make a fantastic profit of $156,000.
What barriers to entry are there?
There are a few barriers to entry for a clothing line. Your biggest challenges will be:
The clothing design skills needed to create appealing styles
The massive competition you’ll face from other clothing lines
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a clothing line, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research clothing lines in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a high end clothing line for plus sizes, or a fashion brand with sustainably made yet affordable clothing.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as cocktail dresses, yoga wear or fitness apparel.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your products or services
You can design a variety of products to sell, for men or women or both. You can specialize in a certain item of clothing or design a variety of items.
How much should you charge for clothing?
Clothing prices have a huge range. Your prices will depend on the materials used, and your brand identity – high end, affordable, or somewhere in between. They will also depend on your costs from the manufacturer. After your costs, you should aim for a profit margin of about 40%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will depend on your clothing designs. If you want to focus on clothing that will appeal to younger people, you should market on sites like TikTok or Instagram.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Clothing Line Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “clothing” or “fashion”, boosts SEO
Name should allow for expansion, for ex: “EnVogue Apparel Co.” over “Bohemian Chic Clothing”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Clothing Line Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A brief summary outlining the core elements and objectives of the clothing line business plan.
Business Overview: An overview providing key details about the clothing line business, including its mission, vision, and the problem it aims to solve in the market.
Product and Services: Clear descriptions of the clothing products and additional services offered, emphasizing unique selling points.
Market Analysis: In-depth research and evaluation of the target market, including demographics, trends, and potential opportunities for the clothing line.
Competitive Analysis: Examination of competitors in the clothing industry, highlighting strengths, weaknesses, and positioning strategies to gain a competitive edge.
Sales and Marketing: Strategies for promoting and selling the clothing line, encompassing advertising, branding, and sales tactics.
Management Team: Introduction and background of key individuals responsible for managing and driving the clothing line business.
Operations Plan: Detailed insights into the day-to-day operations of the business, covering manufacturing, supply chain, and logistics for the clothing line.
Financial Plan: A comprehensive outline of the financial aspects, including startup costs, revenue projections, and profit margins for the clothing line.
Appendix: Additional supplementary materials such as charts, graphs, and supporting documents to provide more depth and context to the clothing line business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to clothing lines.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your clothing line will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a clothing line business. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your clothing line business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use clothing design software, such as Adobe, tailornova, or CLO, to organize your designs, track orders, handle inventory and more.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
For your clothing line, the marketing strategy should focus on highlighting the unique style, quality, and ethos of your brand. Emphasize the design process, the inspiration behind your collections, and how your clothing stands out in the fashion market. The goal is to establish your brand as a distinctive and sought-after choice for your target audience, whether it’s for everyday wear, luxury items, or niche markets like eco-friendly apparel.
Professional Branding: Ensure your branding reflects the style and values of your clothing line, from your logo to your tagline and packaging.
Direct Outreach: Network with fashion influencers, stylists, and bloggers who can help promote your brand and reach a wider audience.
Digital Presence and Online Marketing
Professional Website and SEO: Create an attractive, easy-to-navigate e-commerce website showcasing your collections with high-quality images. Implement SEO best practices to optimize your site for relevant fashion and style-related search terms.
Social Media Engagement: Use platforms like Instagram, Pinterest, and TikTok to share your designs, fashion tips, and behind-the-scenes glimpses into your brand’s world.
Content Marketing and Engagement
Fashion and Lifestyle Blog: Share blog posts about the latest fashion trends, your design inspirations, and style guides featuring your clothing.
Customer Style Stories: Showcase how customers style your pieces in their everyday life, encouraging a community around your brand.
Interactive Campaigns: Create engaging social media campaigns, such as style challenges or user-generated content contests, to involve your audience.
Experiential and In-Person Engagements
Pop-Up Shops and Fashion Events: Host pop-up shops or attend fashion events to give customers a tangible experience with your brand.
Collaborations with Fashion Shows: Participate in local or national fashion shows to gain exposure and credibility in the fashion community.
Collaborations and Community
Collaborations with Influencers and Designers: Partner with well-known influencers or designers to create limited-edition collections or endorsements.
Community Involvement: Engage in community events, sponsor local fashion-related activities, or collaborate with charities that align with your brand’s values.
Customer Relationship and Loyalty Programs
Exclusive Previews for Loyal Customers: Offer loyal customers early access to new collections or special discounts.
Referral Programs: Implement a referral program that rewards customers for bringing in new business.
Promotions and Advertising
Targeted Advertising: Use digital advertising on fashion and lifestyle platforms, as well as on social media, to reach potential customers.
Email Marketing: Keep your audience engaged with newsletters featuring new collections, fashion tips, and exclusive offers.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your clothing line meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your clothing line business could be:
Bohemian fashions for the urban lifestyle
Make them green with envy with our bold cocktail dresses
The next big thing in fashion – luxury clothing for all sizes
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a clothing line business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in clothing lines for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in clothing lines. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a clothing line business include:
Pattern Makers – create patterns for clothing
Seamstresses – sew sample clothing to test designs
General Manager – scheduling, accounting
Marketing Lead – SEO strategies, social media
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Clothing Line – Start Making Money!
The apparel industry is worth nearly $2 trillion and growing fast, which means now is a great time to follow your dream and get in on the action. If you have an eye for style, you could start your own clothing line from home and build a global fashion empire!
Now that you know what’s involved in starting a business, it’s time to start designing your future as a fashion mogul.
Clothing Line Business FAQs
Can I start a clothing line from home?
Yes, you can start a clothing line from your home. You’ll need a computer and some clothing design software, and then find a white label manufacturer to produce your clothing.
How should I price my clothing line?
Clothing prices have a huge range. Your prices will depend on the materials used, and your brand identity – high-end, affordable, or somewhere in between. They will also depend on your costs from the manufacturer.
How many clothes do I need to start a clothing line?
To keep your costs low, you should find a white label manufacturer that offers dropshipping. They will produce your clothing orders on-demand and ship directly to the customer, cutting your inventory costs near to zero.
How to start a fashion brand with no money?
You can’t start a fashion brand with no money, but you can keep your costs to a minimum by finding a white label manufacturer that offers dropshipping.
What type of clothing line is the most profitable?
Luxury women’s brands are the most profitable. Dresses in particular are very popular and profitable.
How to Start a Clothing Line
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Clothing Line Name
Create a Clothing Line Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Clothing Line Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Clothing Line - Start Making Money!
Clothing Line Business FAQs
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