When it comes to starting any business or fashion line it is important to remember that there are many factors beyond money to consider. Similar to any other business you will need sweat equity, you will face several challenges, and it can take time for your brand to catch on and become well-known. While there are hundreds of different fashion companies, brands, and clothing lines throughout the world, the fashion industry is dominated by about twenty of the top companies.
So, how much is needed to start a fashion brand?
Five hundred dollars to twenty-five thousand dollars is needed to start a fashion brand. Smaller brands tend to fall on the lower end of the range while larger brands with higher aspirations tend to fall towards the higher end of it. It all comes down to where you are hoping to begin and how you are planning to scale your business.
At this point, you may be wondering why so much money or equity is needed to start even a medium-sized fashion brand. We are going to break down several factors that impact this estimate to better explain the number to you and where it comes from. From the initial business plan and thought process to production and finally getting the items distributed to your customers.
The Business Aspects
When you decide to start a fashion brand, many items and actions will be taking place behind the scenes regarding the business aspect of everything. This includes but is not limited to a business plan, finding a need or niche in the market, spending time to create the designs or finding someone who can, figuring out who you want to target, and more.
The business aspects of the brand can take months or years within themselves to figure out and plan. This includes researching trends, ideas, demographics, regional preferences, and the list goes on. The whole process tends to be quite costly, especially when you are just starting and planning everything as not everyone has investors at this stage.
Other items that come into play are needing to create a brand name, a logo to go along with it, a marketing plan, and a market profile. These will be the items used to sell the brand to potential consumers. Logo design alone can cost a pretty penny depending upon the intricacy of it, the number of revisions needed, and the number of differentiations desired.
While the idea of a fashion brand may seem fun in theory, and it does tend to be fun later on, you do need to be aware of time frames and budgets throughout the process. The beginning stages can be the most expensive due to the timelines as proper research and execution now will pay off in the long run. However, long-term delays can also be detrimental so planning it properly is key.
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Creating The Fashion Pieces
As the business aspects of the brand begin to fall into place and come together, you can begin to move on to the fashion pieces themselves. Important questions need to be answered early on such as, will you be designing the items yourself or hiring a team of designers to do it for you?
Once that question is answered the design process can begin. This usually includes three to four rounds of revisions and can include even more later on depending upon the material chosen for each piece and how it stretches or lays.
Next comes the fabric selection and process. Finding fabrics that go with your chosen designs in materials that you want can be a tedious process as you source and pick through samples. This means that you have to go through catalogs, select your picks, wait for them to be shipped, then decide on which one you want to use, and order it once you do. Then each fabric has to be sourced and shipped, which again takes time and costs money.
You will also need to decide on a manufacturer to produce the final pieces unless you are planning to create them yourself. Manufacturing comes in different forms depending upon each brand’s individual needs. Smaller brands may decide to produce their items in the house originally to save on costs and inventory space.
As you decide on a manufacturer and factory to use
You also need to consider the distribution and sales goals that you want to achieve. These goals will help you to determine the factory size you need and what production numbers you need to aim for to meet the intended demand. This is why premarketing is essential to having your launch be successful. No one can buy from your brand if they have no idea that it exists.
One way in which companies can produce more products in-house is to find a local brand to screen print their logo on their final products. This allows them to do more simple designs and patterns when starting without having to worry about long shipping times or storing items in bulk, which tends to require a larger location or warehouse.
Otherwise, brands can choose to outsource their manufacturing. The majority of the time, this means that the pieces will be made and shipped from outside of the United States, resulting in possible delays and longer wait times. This means that products should be ordered in bulk and earlier on to prevent any delays or late launches.
Smaller brands are typically unable to visit the manufacturing facilities in person to vet and inspect them due to the traveling requirements and budget constraints. However, it is advised to do so. Meetings over Zoom or email are acceptable though as long as thorough reports are submitted and inspections are up-to-date.
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Try A Soft Launch
If you are funding your first launch on your own, chances are you do not have a few thousand dollars just lying around, which does not mean that it’s impossible. You will just need to begin with a soft launch, which will act as proof for any investors or partners that you may try and pitch your brand to later on.
Soft launches are quite popular for smaller business owners or people just beginning their entrepreneurial journey as they have no current proof of how the brand will do. It’s similar to a house loan, in theory, you have to provide the loan officer with bank statements and tax documents to prove that you can afford the monthly loan payments. People will not invest in you without proof, which is why businesses on a budget begin with this type of launch.
After you sell X number of units and have physical proof that people enjoy your brand and products you can begin to approach more serious investors and pitch them your brand. Ideally, no one wants to share their profit or company but it is required to get many brands started.
Remember Your Employees
You will need to hire a team to bring your vision to life. This includes potential designers, an assistant or two, a graphic designer for logos and social media posts, and a marketing director to name a few people.
With each person, you hire the final amount will continue to add up, especially if you are hiring them part-time or even full-time rather than as independent contractors.
That is why most brands will need between five hundred to twenty-five thousand dollars to start a fashion brand. It depends on the brand’s needs, the approved timeline, the number of employees hired, the manufacturing option chosen, and the type of launch needed. The more you want to begin with the more expensive the brand will be.
Related Questions
Is it possible to create a fashion brand at a lower cost?
Yes, you can definitely create your brand for less than a few thousand dollars, that is just a general estimate for brands. This cost could be reduced though if you are only doing a few clothing items to start, your timeline is strict and followed to a tee, and you do not require many items to begin selling them.
Is it common for fashion brands to outsource their clothing production?
Yes, many popular brands outsource their clothing production, however, most of the time this will result in your items being made in another country such as China or Bangladesh. If you outsource your production it is recommended for you to visit the factory beforehand to check out the working conditions and conduct a vetting process.
How can someone find an investor for a fashion brand?
When in doubt, you can start your search by talking to people within your network. Other entrepreneurs you may know, any fashion students or professionals that you may be friends with, and so on. This can allow you to get an idea of where to begin looking further and continue your search, however, you will also need to create a pitch to prove to them why your brand deserves their time and money.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Meet Shawn Chun: Entrepreneur and Fashion Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a designer or boutique owner at a craft fair, farmers market, retail location or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Fashion Business Boss: I want to help fashion business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.