How To Start A Fashion Business With No Money!

While deciding to start your own fashion business is a hard one to make, it’s even harder when you consider the capital you need to create that business. If you’re starting from scratch, you might find yourself scratching your own head as you try to figure out where you’re going to get the money to even start—so what resources are out there for you?

To start a fashion business with no money:

  1. Use the Small Business Association for guidance and for their resources. 
  2. Search for and apply to grants both online and in your local community.
  3. Get a loan from family or friends. 
  4. Get a loan with competitive rates through a bank.
  5. Sell assets for quick cash. 

If you’re just starting out, you’re not going to need an extreme amount of money for your business, but it is important to understand how much you’re considering. What is your basic budget, and how can you get those funds? Read on to find out more. 

The Initial Budget Breakdown

When it comes to starting your own business, it’s extremely important to have your budget sorted out before you take a single step. What needs to be done, and what money are you going to need to get there? Your budget should include:

How to start a fashion business with no money.
  • Enough money to manufacture your product and create inventory. Without inventory, you don’t have a business. Depending on how you create it, this cost could vary—if you’re making it in house, it could be much more inexpensive than manufacturing it elsewhere, but you will still have the costs of making it and all materials needed. If you’re just starting out with a small inventory of manufactured clothing, the cost will be around $4,000. 
  • A way to sell your items through a point-of-sale system. What is your business without a profit? Whether you’re selling in a store or you’re focusing your business online, it doesn’t matter—your point-of-sale system usually costs around $500 to begin with a monthly subscription rate, depending on what you choose. This system can be integrated into your website for easier shopping online. 
  • Advertising for your clothing brand and your clothing line. They are separate things! Your clothing or fashion brand is your overall brand, while your clothing line is each collection you sell in each season. In your advertising budget, you should be focusing on creating social media pages and a website, especially if you’re selling completely online. Your website is now your storefront, so make sure it’s easy to navigate, has plenty of photos, and touts your business message and your branding. Your social media pages are a great way to utilize sharing and reposting as free marketing. Just make sure you’re working with your target demographic and create a consistent posting schedule. A website costs about $250 to create on your own, and all other marketing costs are up to you. 
  • Insurance and business permits. You want to make sure your business is legal, even if you’re not using a physical storefront. These licenses will run you about $1,500. 
  • Photography and modeling. Especially if you’re working online, you need to have fantastic photography of your items—if you don’t have a storefront, they can’t come in and physically see your items, so they have to know what they’re getting when shopping online. While you can usually find amateurs willing to do it for experience or lower prices, this can usually cost about $1,500. 
  • Staffing. Whether you’re hiring on people or it’s just you, make sure you’re paying yourself, even though this cost varies. 
  • Delivery costs. If you’re selling online, which many clothing stores do, you’re going to need to have the supplies and initial funding to ship your items. This can vary depending on what you decide to do, like free shipping, but note that the United States Postal Service provides packaging materials for their Priority Mail service for free.

So you’re looking at about $10,000 in an initial investment for a small, online fashion business. But where can you get that kind of money? There are avenues that you can explore, and not all of them will leave you with high levels of interest to pay back. 

How To Promote Your Fashion Boutique In 5 Quick Steps

Use the Small Business Association for guidance and for their resources. 

How to start a fashion business with no money.

The first stop you should be considering when you’ve created your own small business is always the U.S. Small Business Administration. They are created in order to help you, the small business owner, make sure you have all the resources you need to start a successful business. Not only do they provide funding opportunities and information on potential grants, but they have information about all parts of the business creation process that could help you in the long run. 

There are several loan options that the Small Business Association lists on their website, including a 504 loan, 7(a) loans, and microloans. For your purposes, a microloan is what you should be considering—it’s a loan less than $50,000, intended for use in starting a small business. But they’re not just going to leave you in the cold on your loans—they’re going counsel you and educate you on what would work best for you. They also have competitive terms on their loans, and you do not need to provide collateral. Find out more at SBA.gov. 

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Search for and apply to grants both online and in your local community.

While you should be careful looking for grants online—some try to take advantage of those looking for grant funding—there are grants available for you to start your own business. Find reputable grants through the Small Business Association, or consider looking for grant opportunities locally. Your Chamber of Commerce, local government, or development agency often will have grant funding available to those starting up a new business in their community. If you are part of a protected class like being in a minority group, you may also be eligible for other grant opportunities.

Get a loan from family or friends. 

But make sure they’re going to be fair about it first! Find a family member or friend (or multiple) that you can trust and are honest, and work up a contract with them on repayment, any stipulations, and even interest rate, if applicable. Treat it like you would any other bank loan, and you’ll be able to use that capital without regret or feeling like you’ve taken their money.  

Get a loan with competitive rates through a bank.

While this one is the choice many avoid due to the rates, it is still an option. When you’re considering going for a bank loan, make sure you have your entire business plan ready, along with your budget. They are not the easiest to get when you’re just starting out, and you may need collateral, so this may be a lower choice on the list if you’re starting out with no money. 

Sell assets for quick cash. 
How to start a fashion business with no money.

This is the last option on the list because it should be your last option. Selling your personal items for quick cash shouldn’t be the first option for you—selling jewelry or a car or even a house simply to start your business may not be worth it. Make sure you exhaust your other options before you attempt this one. 

Starting your fashion business with no money doesn’t mean you have to struggle. There are ways that you can get enough funding to begin, and while it isn’t going to be easy, you have guidelines to your success. Start by creating your business plan and your budget—it will give you a better idea of just how much money you’re going to need and will give you something to shoot for as you explore any funding options. As you do, make sure you keep a record of who you’ve asked, where you’ve searched, and who you’ve been in contact with. When considering grants, make sure to keep a timeline of when those are rewarded and if rewarded, what information you will need to provide to them in order to receive that funding. You can start your own business with no money as long as you have the ability to plan ahead and ask for help. 

How To Start A Fashion Business From Home In Ten Easy Steps!

Related Questions

What’s the difference between a grant and a loan?

The difference between a grant and loan is whether you have to repay it. A grant is technically a gift—you’re receiving the money without having to repay it. A loan, on the other hand, means you have to pay it back. Loans are easier to receive, but you have to pay it back. Grants are no risk and you do not have to pay them back, but they are harder to receive. 

How much on average does a small online boutique make?

According to Forbes, a small online boutique that focuses on selling clothing can make about $6,000 of net revenue per month. The net revenue is the profit for the boutique and does not take out all other expenses including inventory, staffing, marketing, and insurance. 

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.