When you’re just starting out with your idea for a small business, it’s important to consider your budget. You may be limited in your cost, but not limited in your ideas, so how much money do you need to start your own clothing line? Is $10,000 enough to follow your dream of your own clothing store?
Is $10,000 enough to start a clothing line?
Yes, $10,000 is enough money to start your own clothing line. While it does not include the cost of a physical space, you can start your business at home with an online presence, using social media for free marketing.
How do you start your business with only $10,000, though? How do you move forward with that capital to create your own clothing line, and how can you make enough money to earn that initial investment back, and then some? Read on to figure out how to determine your budget and how you can make money out of your clothing line.
Determining Your Budget
The most important aspect of your business as you determine whether $10,000 is enough to start is determining your budget. So what items do you need to spend your money on, and where can you cut costs to make sure you make that $10,000 mark?
Here’s what you will need to start your clothing line:
- Some sort of product. Nothing can happen without your inventory, so make sure this is your priority. It doesn’t matter whether you’re making it handmade or purchasing through a manufacturer—you will either need to spend money on supplies to make these items or pay the manufacturer themselves. Costs can greatly vary depending on where you buy them, what you buy, and who you buy them from. Cost: depending on how much you’re buying and what you’re doing, this should cost about $4,000.
- A way to sell your product. Whether you’re selling online or in a shop, you need a way to collect money. In most cases in the modern age, this usually means some sort of app on a handheld device and a cash register if you are in a store. Online, this means a plug-in on your website that will collect credit card payments. Cost: a point-of-sale system can usually cost about $500.
- Marketing. Without marketing, your potential customers remain that—potential customers. If they don’t know about you, they can’t purchase from you, so making sure you market to the right demographic is key to bring them into your shop, online or otherwise. For many businesses, marketing on social media is free or inexpensive based on what you decide to do. Anything you post can drive traffic into your business, so make sure you set a schedule and post on brand. Cost: creating your own website on Wix or WordPress will cost about $250, plus any other marketing expenses you incur.
- Insurance and business permits. Regardless of how you set up your business, you will still need to take care of some legal items. Setting up shop online—which is the best way to go if you have a lower budget—means having liability insurance and home insurance. If you are running your business out of your home, that means you should be covered enough on your business side too, so talk to your home insurance provider to see if you need to make any changes to your existing policy. When it comes to business licenses, talk to legal counsel to determine what licenses you may need to start. Cost: about $1,500 on the low end.
- Photography and modeling. While you don’t need to go to the highest extreme when photographing your items, you should make sure you have enough to showcase your product for your online store. This is what makes people decide to purchase your clothing, so while they don’t need to be runway ready, make sure they accurately depict your items. Cost: about $1,500, depending on your photographer.
- Staffing. If you’re just starting out at a lower budget, this may just include you! You still need to get paid, so make sure you budget out a fair salary. Cost: dependent on your decisions.
- Delivery costs. Working out of your home means sending your items to your customers, so make sure you are prepared for the shipping costs. Whether it’s included in the cost of the item, an extra cost to you, or an extra cost to the customer, it doesn’t matter—it still needs included. Make sure you have shipping labels, packing material, and boxes, too. Cost: dependent on business decisions; you can get free United States Postal Service mailboxes from your local post office.
Why isn’t a physical storefront on this list? Firstly, it’s not necessary in our internet age. Secondly, this can jack up the price of your business exponentially—almost $20,000 for an all-inclusive package alone.
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Increase Your Profits
That budget may be frightening to some, as starting a business with only $10,000 can be terrifying. So how can you take that money and turn it into something more? There are ways to invest your money that will make your business take off in the long run.
- Understand what you’re getting into—research the clothing industry. Make sure you know the industry before you even start your business. Know the niches you’d like to focus on, along with your target demographic—knowing this information can help you not only focus your investment, but sort out exactly where you want to market your clothing. You can make your business decisions based on the buying patterns of your chosen demographic, and you can market specifically to that niche—spending your time researching will only help you make better and more targeted business decisions.
- Create a business plan. This is key to your success. A physical storefront isn’t the only business that requires a business plan—even online businesses should have one on hand. Consider any and all business decisions you may have to make, including budget, staffing, business licenses, etc. The more you consider in this plan, the less time you’ll spend considering it in the future.
- Don’t overspend. With a lower budget, this may be hard to complete, but only purchase the things you need, like inventory and a way to sell your items. Marketing and inventory are your most important aspects of selling online, but don’t spend too much in either. Marketing can be done at a low price, and so can completing your inventory—don’t have too many items that end up not selling. If you have trouble estimating this, have one item on hand to take photos and take pre-sales in order to get a better handle on how many of one item you may need.
- Don’t trademark your items at the start. Trademarking your clothing may seem like a good idea, but it can be a waste of money. Waiting until your clothing line gets more popular is your best bet before you consider whether there are copycats stealing your designs, but that should not be an issue when you’re first starting out.
While $10,000 doesn’t seem like a lot of money, you can make it work when it comes to starting your own clothing line. Focusing on limiting your inventory, selling strictly online, managing your demographic, and using free social media posts as your primary marketing source is key to keeping your initial costs low. As you grow, you can make decisions to increase your investment in other areas, like increasing your inventory, trademarking your items, purchasing more marketing, hiring on more workers, or even finding your own physical space—but it is possible to start your line with only $10,000 capital.
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RELATED QUESTIONS
What should I look for in a clothing manufacturer?
When you’re investigating clothing manufacturers for your business, it’s important to find a business who uses quality materials. This is a question you need to ask yourself—are you looking to create more sustainable fashion, or are you interested in less costly alternatives? Especially when you’re starting out, look into the minimum order quantities of your manufacturer. These businesses allow you to purchase a lower quantity of inventory, which means you can keep your costs low, as well.
Which is better, a physical store or an online store?
More and more businesses are shifting to an online model, and while there are advantages to having your own physical storefront, you can lose the cost of a lot of overhead that you would in a physical store. You don’t have rent, insurance, staffing, etc. costs from that physical location—but that does mean it lands on you, as the homeowner, to front those costs. If you’re looking to start a small business with a smaller budget, online will be your best bet.
How many choices do I need to start my clothing line?
If you’re just starting out with a limited budget, it’s important to have choice without spending too much of your initial capital. Ten to twelve styles for your first collection is the widely accepted range of choice for your clothing line.
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.