Gaining the capital needed to start your own business can be difficult, but what if that doesn’t have to be an option altogether? What if you can start your business with the lowest amount of money possible? Is it possible to start your clothing business with little to no money? The answer is yes!
How to start a clothing business with little to no money:
- Utilize Small Business Administration resources.
- Apply for grants.
- Secure investments through friends and family or get a bank business loan.
- Sell your assets to get cash.
- Cut down on items in your budget.
How much money does it take to start your own clothing store? What are the basics of starting that business, and what can you do when you don’t have the funds? Read on to find out more.
How Much Money Does It Take?
First, it’s important you know how much money it actually takes to start your own clothing business. While you can start you business with little to no money, you will need to start collecting capital at some point—and here’s where you’ll need to spend the money.
- Your product. The most important part of your business, you’ll need some sort of product to sell before you even consider opening your doors. Whether it’s handmade or purchased through a manufacturer, it doesn’t matter—you need at least a small inventory of clothing. While costs can vary, having the proper inventory can cost about $4,000.
- A point-of-sale system. One of the easiest ways to start your own clothing business is by selling online—a physical storefront can cost upwards of $50,000. So how do you sell online? Through your own website and a point-of-sale system integrated into that website. These usually cost about $500.
- Marketing. Remember that website you needed? This is where it falls into your budget. That, and social media—if you’re looking to keep costs down, it’s important to create your own website and social media pages to utilize free marketing. Make sure you’re using the right social media apps to cater to your target demographic, and be sure to create a posting schedule and make sure every post is on brand. This can usually cost about $250 for your website creation.
- Insurance and business permits. No matter what you do, you’ll need insurance and permits. All businesses, even online ones, should receive business permits to make sure they are on the right side of legality—business licenses make your business legitimate, and can help save you in the long run. Costs are usually about $1,500, especially if you seek out legal help.
- Photography and modeling. This doesn’t have to break the bank, but especially if you’re selling online do you need high quality photos of your items. They don’t need to be perfect photos—just good enough to showcase your items and how they look on the model. This can cost about $1,500.
- Staffing. Make sure you’re prepared to pay yourself for all your hard work! This varies from business to business.
- Delivery costs. Since you’re working out of your home, you don’t have the costs of a physical location—but you will need a way to ship your items. This cost is hard to determine at the start, but you can get free United States Postal Service Priority Mailboxes for free from your local post office.
Licenses You Need To Start A Clothing Line
Starting Your Business With Little to No Money
Now that you know what your budget should look like, it’s important to start considering your options. While you don’t need capital to start with your idea, you will need funding to start—so how do you get that funding?
- Utilize Small Business Administration resources.
If you’re looking to start your own business from scratch, there are resources out there for you. The Small Business Administration exists to help all businesses start from the ground up. While they do not often provide actual funding for their businesses, they do provide funding opportunities through loans and information on grants.
When it comes to loans, the Small Business Association provides several options, like 504 loans, 7(a) loans, and microloans, which provide less than $50,000 for the opening of a small business. Some of the benefits include loan counseling and education, competitive terms, and other benefits you would not get through another loan opportunity. You also do not need collateral to receive such a loan, which, if you’re starting your business with no money, is a priority. Find out more about the funding opportunities at SBA.gov.
- Apply for grants.
While grants are available through many different organizations, if you are a member of a minority group, a woman, or a senior citizen, you may be eligible for additional grant opportunities. The Small Business Administration has information regarding grants, while smaller communities can also have opportunities. Contact your local chamber of commerce or development agency for information on how you can apply to local grants.
- Secure investments through friends and family or get a bank business loan.
While grants are competitive and you may not receive them in time to start your business, you can secure funding through a bank or your trusted family or friends. This can be some of the most stable options when starting your business, but note that you will need a business plan and a budget before you approach any bank for a loan.
When it comes to friends and family, make sure they are both trustworthy and honest. While they are more likely to have lower interest rates than a bank loan, you should approach them with the same budget and business plan so they know that you’re serious about this venture. You should also get your loan in writing, regardless of the amount that you end up receiving from them as a result.
- Sell your assets to get cash.
While this should be the last option you consider, you can still sell some of your personal items for quick cash. This can be very stressful, though, and have a lasting impact on your psyche—selling jewelry or a car might be easy, but make sure you’ve exhausted all your other options first.
- Cut down on items in your budget.
With that budget outline, there are ways that you can cut down those costs even further. Not overspending is going to be your best option on keeping that tight budget. When it comes to your product, make sure you’re only purchasing the sizes and styles that you need. Consider creating a waitlist for your items so you know the exact number of pieces, or have people pre-order your items.
You can also save money on marketing by simply using the free options through social media. Website creation can be as simple as making it yourself, and that cost can be lowered if you look for a provider that has sales on their premium websites and URLs.
While you shouldn’t skimp on insurance and business permits, it’s possible to keep those costs down. You can talk to a trusted friend with experience in the business, or find out what other business owners are doing so you do not have to incur the costs of talking to legal counsel.
Photography and modeling are a great place to really lower your costs. Talk to friends and family to see if you know any aspiring photographers or models, and give them the opportunity to get experience in the industry. Make sure when you’ve found your success that you do compensate them in the future!
You can reduce your costs when it comes to staffing by being your only employee at the start. That being said, make sure you do use some of your profits to support yourself during this process.
In terms of delivery, your best options are to keep costs low by using free options provided by the United States Postal Service.
Your best asset in starting your own business will always be other business owners. Regardless of whether they’ve started their own clothing line or not, small business owners have a wealth of knowledge that you can tap into. See if they have advice for you as you’re just starting out, and know that if you have questions, many will answer.
While it does “take money to make money” it’s important to know that you do have options. Build relationships in your community to get additional advice, work with social media to market your items, and make sure you stick to your budget. Keep good records so you know where the money is going and where you need to invest your profits later. It’s possible to start your own business with little to no money—it just takes some focus and grit.
Tips on How to Design Your Own Clothing Line
RELATED QUESTIONS
How do I find a reputable clothing manufacturer?
Finding a reputable manufacturer is key if you are not hand making your items. Look for a manufacturer who allows for minimum quantity orders like those at Maker’s Row, Common Objective, Sqetch, and Kompass. You’ll find quality manufacturers for lower prices at any of these databases.
How much can a clothing line business owner make?
The average clothing line owner can make about $51,000 a year. That number can vary, though, between $24,000 and $140,000 depending on success, profits, and location.
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.
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.