How Much Should You Invest In Your Clothing Line

How Much Should You Invest In Your Clothing Line?

by

Getting down into budget crunching time when you start your own business can feel overwhelming, but it doesn’t have to be. Starting your own clothing line is a creative process, and it can remain that way—all you need to know is what goes into a clothing line business budget and how much you should invest in your business. 

You should invest $10,000 in your clothing line if online. For a physical storefront you should invest $30,000 at a minimum. Any additional investment is at the discretion of the business owner. 

What goes into your budget to start a clothing line? What line items do you need, and how do you decide what stays and what goes? Is it cheaper to start an online store, or do I need a physical store front? Read on to find out more. 

What goes into the budget for a clothing line?

Before you consider just how little or how much you want to invest in your clothing line, you need to know how much money it will cost for you to get started. 

Your main cost will be your inventory—whatever product you decide to sell, you will need to either purchase it from a manufacturer or create it yourself. Whatever your process is and whatever your supplies needed, these costs can vary exponentially. You may have to work with a manufacturer to produce your clothing, or you can produce it yourself, but you will need the knowledge and supplies to do so. Because those costs vary so much, you should spend the bulk of your budget on inventory at around $4,000 for your initial buy.

Your next most important part of your business is your point-of-sale system. This could vary, depending on how you set up your shop. Selling online is your more inexpensive way to go—your point-of-sale system could be something as simple as setting up a shop online. If you’re going with a physical location, you will need a device and a cash register in order to take payments. Usually, this costs about $500 to set up. 

How Much Should You Invest In Your Clothing Line

The next expense is your marketing expense. If your customers don’t know about your product, whether you’re in a shop or online, they can’t purchase your products. It’s important with your marketing that you start with your website, and if you’re selling online, you should already have that set up. You can work through a designer, or you can set one up by yourself on Wix or WordPress. These costs can be much lower if you set it up yourself, coming in at $250 and above. If you’re looking to advertise in other ways, you can do so for free on social media, or you can purchase advertising locally or on social media—and that will increase your costs. 

Next is your insurance and possibly your building permits. This depends on what kind of business you’re building—whether you have your clothing line under your own physical shop or whether you’re selling out of your home, it doesn’t matter, you will still need insurance to cover both you and your business. If you decide to set up your shop online, you should still have liability insurance and insurance that covers your home. Your business should be covering part of your insurance, as your business is also using that building. You may need to make changes to your existing policy. While the cost usually starts at around $1,500, you should talk to your lawyer to see what changes you need to make for your insurance. 

To get your items to sell online or share your products on social media, you’ll need images. Next up on your budget is photography and modeling. You don’t need to break the budget for these—you can even talk to up and coming hobbyists or those trying to break into the market—but you do need quality, high end photos of your products to display online. Cost starts at around $1,500 for photography and modeling. 

Next is your staffing. While it could just be you running the business, you still need paid. You could also be hiring out freelancers to help you do your job—so this cost varies depending on how you organize your business and how you make your decisions. 

Finally, how are you planning on getting your items to your shoppers? If you’re selling online or in a store, it doesn’t matter—you need bags and packing materials. This number is hard to estimate, as if you’re shopping online, you may offer free shipping to your customers. That means your item costs must include the price of shipping. 

How Do Fashion Designers Make Clothes?

What does that number come down to? Here’s the breakdown:

  • Inventory: about $4,000
  • Point-of-sale system: about $500
  • Marketing: about $250 for a website, all other costs determined by business owner
  • Permits and Insurance: starting at $1,500
  • Photography and Modeling: starting at $1,500
  • Staffing: variable cost
  • Delivery and Packaging: variable cost

Total: about $10,000 including variable cost estimates

That’s just to start out your business from home. If you’re looking to create a business in a storefront, you’re looking at almost $20,000 on top of that cost just for the building, permits, furniture, staffing, etc. 

How much should you invest in your clothing line?

While the cost itself varies between $10,000 and $30,000, your investment is what you want to put into your shop. It also depends on how much you have for your investment; if you don’t have the $30,000, stick with the online shop to start. You can always open up a physical storefront as you make a profit. Don’t be afraid to start smaller and continue to grow as you gain more profit to invest back into your business. 

How Much Should You Invest In Your Clothing Line

If you’re looking for additional investments, there are ways to get help. The Small Business Administration has a wealth of information for new and upcoming businesses at their website, SBA.gov. You can they do provide loan options, along with information on educational programs and even loan counseling. Many of these loans do not need collateral. 

You can also apply for grant funding. While this can vary from government to government, check with your local offices to find out what grants are available to you. The smaller grants can typically be less competitive, and many local communities like to see their small businesses grow, so receiving local grants can be easier. 

If you’re looking for more investment, you can also secure investments through a bank business loan or with family or friends. With both, make sure you have a business plan ready and a contract drawn up to make it above board, official, and honest. 

You can also sell assets to get cash. While you don’t necessarily want to sell your high dollar items of a personal nature just to fund your business, this should be your last resort. 

You can always cut down on your budget. There are ways to make your initial budget work for you—create your website yourself, work with students on modeling and photography, and start with only you as your staff. Keep your marketing low by posting free posts on social media. Make sure you know your industry and plan ahead. Making a profit is only possible if you know what you’re doing. Create a marketing plan so you can make sure you’re spending your money and your time in the right places—market to your niche. Posting is free on social media, but make sure you’re reaching your target demographic in what you post. Limit the cost of your inventory to keep those initial costs down. You can start your business with a low investment, which means you could make enough profit to invest more in your business in days to come. 

How Much On Average A Small Online Boutique Makes

RELATED QUESTIONS

How do I choose a clothing manufacturer?

While it all comes down to personal preference, choosing a clothing manufacturer doesn’t have to be complicated. Find a business that uses quality materials and creates sustainable fashion for less cost. One factor that you should consider as you are starting your clothing line is manufacturers that allow for minimum order quantities, which means you can order a low number of inventory and keep your costs low. 

Why do clothing lines fail?

How Much Should You Invest In Your Clothing Line

In most cases, failure of a clothing line comes from poor planning, poor supplier choices, pricing inventory incorrectly compared to the target demographic’s needs, and having too much initial stock. 

Is a physical store better that an online store?

There are advantages and disadvantages to both the physical store and the online store when creating your business. While a physical store allows people to walk in, you will have the costs of having that location. While an online store does not allow people to browse in a physical store, it is much cheaper to start. 

To learn more about how to start your own fashion clothing line check out my startup documents here

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.