How Much Money Do You Need to Start a Clothing Line?

You love fashion so much that you have decided to start your own clothing line, Congratulations! I know you have a lot of questions, like how much money are you going to need to get started. Look no further than this article to answer that question!

You need anywhere from $500 to $50,000 to start a clothing line.

There is no doubt that starting a clothing line business is a big deal. It is growing but there is also a lot of competition. You have to know how to build your business and how much it is going to cost in order to compete.

Before we get into the cost, we are going to discuss how to start the business from the beginning. This will give you an idea of what the cost will contribute to. So, don’t stop here, keep reading!

Table of Contents

How to Start

You have had a dream to own your own clothing line business and you finally got up enough courage to step out of your comfort zone or fear and do it. Now you have a lot of questions I am sure. Let’s get some, if not all, of those answers.

Let’s discuss some things that you need to know. An idea is great, but now what? It is not enough to just know how much it is goin to cost you to start your business. You need to know what the cost covers and exactly what you need.

This article will help you make a checklist!

A Business Plan, EIN, License and Registration

Let us start with a few easy steps and then work into the business plan.

You have come up with a name for you company, now there are a few steps to take before you an get started selling your clothes.

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Business Entity Type

You will want to select your business entity type. There are several types to consider. This will determine your federal EIN for your tax purposes. A few options are: (You can look up the differences on irs.gov or Google.)

sole proprietorship
LLC
S Corp

EIN

First, go to irs.gov and get a free EIN (Employer Identification Number).

Business License

Then depending on your state requirements and if your business is strictly online or has an office or store, will determine if you need a business license those fees differ from state to state. You can find all the information for searching business license for your state by going to your states government website page.

Registration

Depending on your state you may have to also register your business.

Business Plan

Now here is where it will take you some time. You should write a business plan. There are seven parts to a business plan.

Executive Summary
Company Description
Products and Services
Market Analysis
Strategy and Implementation
Organization and Management Team
Financial Plan and Projections

We are not going to discuss how to write your business plan in this article, but we will discuss why it is important and why you need one.

The business plan is the roadmap and outline of your business objectives for the next several years, usually the first five years. If you you are wanting to look for grants and investors, you will need a business plan because they will ask for one before giving you any money.

Find Your Niche and Understanding Your Market

Now that you have your plan, you need to find your niche. This will determine your audience for marketing and advertising. Your audience also includes the demographic that you are looking to sell to.

For example, is your niche for the middle class, lower income class, or the rich and famous? Do you wan your line to be affordable for everyone? These are questions that you will need to ask yourself. Once you determine your target market, then you know what to produce, how to advertise your merchandise, and even costs of materials.

Design and Source the Clothes

Now that your business is all set up, it is time to design your clothes!

Finding the right material is a huge decision. It can depend on your target market. That doesn’t mean you want to buy the cheapest material, but you don’t want the material to cost more than your sell price based or your audience. It is the cost verses the quality that makes all the difference in your decision and remember to look at your budget as well.

When you are deciding what to use to create your clothes, one more than to consider is your goals and mission for your line. This will also help you decide if it is worth sacrificing your target price-point for quality materials.

Partner with a Manufacturer

Well, you have got your business name, your business is registered, and you have decided on the materials you are going to use. Now it is time to find a manufacturer to sell your line.

There are a few things you should consider their minimum order requirements, quality, cost and reputation. You can even search for overseas manufacturers.

Don’t worry about how many pieces to designs. You don’t need a lot, just start with a few.

Price Products

It is time to price you line! You should come up with a price between an affordable price for your target market and a price that allows you to make a profit.

Decide Where to Sell

Now comes the time where you want to sell your clothing line.

You can start your own e-commerce website, sell on Amazon, Etsy, eBay, social media, open an boutique or find a boutique to sell your line in. You can even choose to sell your clothing line in a large retail stores, you would just need to find out how.

Marketing

What’s the next step after deciding where to sell your clothes? Now it is time to market them.

Social media is your biggest outlet and it is free. Take some good pictures of items, pick good tag lines, and add how or where people can purchase your clothes.

How Much Does it Cost to Start

It is time to discuss your biggest question, how much money is it going to cost you to start your clothing line business. There really is no set cost. There are a list of things that will determine your start up costs. Several we’ve discussed above in the ‘what do you need to do to start your business’.

Those determine factors include: manufacturing costs, product sourcing and material costs, designing and delivery costs, website and marketing/advertising costs, and distribution costs.

This gives a wide range between start up costs. You start up costs could be anywhere from $500 up to $50,000 depending on the size of the clothing line. The size of the line will determine the costs of the above factors.

But there is a bright side and that is your profits! You can literally make anywhere from $21,741 to $140,935. The national average of profit is $51,000. Just remember that there are still determine factors that will come into play to determine your profits. They are your location, merchandising costs, material costs, quantity, marketing and advertising, design costs, license and permits, website costs, and payroll to along with the ones we talked about already. Marketing and advertising we are going to talk about again in a little more detail.

Quantity

We have all heard of buying in bulk. When it comes to manufacturing your clothing line the more you have the factory to make, they charge you less per piece, just like buying in bulk.

However, when starting out you don’t want to buy too much on the beginning until you build clientele.

Location

Location of your manufacturer can help you save money. It depends on what part of the world you want to use.

Marketing and Advertising

Marketing has changed through the years with technology. Social media has made marketing and advertising a lot easier and less expensive. You can post for free and you can even create ads a low cost. But you also should remember that it is a competitive world for clothing lines and if you want to be competitive, then you should consider paying more for your marketing.

Payroll

Payroll can be expensive depending on how many people you have employed and how much you are paying them. If there is more than you, then you need to think about these costs in your startup costs.

One thing is for sure, there maybe a lot of decisions to be made, but once you make those decisions, then it will determine how much it will take you to start your clothing line. Go for it and good luck!

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