A clothing line business designs and sews a collection of apparel for a target demography or market. These clothes are sold in retail locations and/or through online stores. In essence, it will be right to say that a clothing line is any business that designs clothes, selects materials, and sells finished products.
A recent report published by Statista shows that the global apparel market is projected to grow in value from 1.5 trillion U.S. dollars in 2020 to about 2.25 trillion dollars by 2025, showing that the demand for clothing and shoes is on the rise across the world.
The demand for apparel is expected to stay mostly consistent between 2015 and 2020, although the Asia Pacific region had the highest level of growth at four percent. The three world’s largest apparel markets are the United States, China, and Japan in descending order.
Steps on How to Start a Clothing Line Business
Table of Content
Conduct Market Research
The first step in the market research process for your clothing line is to develop market-based research questions in line with your overall business goals and objective. In this regard, you should source information that will help you maximize your business, give you reliable data of what your potential market will be looking for from a clothing line, the designs, and styles that people will spend a premium on.
a. Who is the Target Market for Clothing Line?
If you are thinking of opening a clothing line, then you should make target demographics all-encompassing. It should include boutiques, clothing stores, corporate executives, socialites, students, migrants, entrepreneurs, business people, celebrities, sportsmen and women, every adult in your neighborhood, and of course on the internet.
b. Is Clothing line a Profitable Business?
Yes, the clothing line business is profitable but it is important to note that while absolute numbers are steadily climbing, worldwide revenue growth—as represented by compound annual growth rate—is slowing: down from 15.3 percent in 2018 to 7.6 percent by 2022.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to clothing lines, and here are some of them;
- Sport clothes
- Bridal Wears
- Casual Wears (Jeans, Tee Shirts, Polo, Shorts, et al)
- Children and Baby Clothes
- Robes and Uniforms
- Cultural/Native Attires
- Corporate Clothes (Shirt, Pants, Jackets, Suits, Blazers, Ties, et al)
- Underwear
- Female Dresses
- Male Dresses
- Costumes.
d. Who are the Major Competitors?
- Inditex – Zara, Massimo Dutti
- Nike
- LVMH – Louis Vuitton, Givenchy, Dior, Marc Jacobs
- TJX Companies – TJ Maxx, Marshalls
- Hermès
- H&M
- Richemont — Cartier, Chloé, Net-a-Porter
- Ross Stores
- Adidas
- Kering — Gucci, Alexander McQueen, Balenciaga
- L Brands — Victoria’s Secret, Pink
- Pandora
- Fast Retailing — Uniqlo, Theory
- Next (British clothing company)
- VF Corporation — The North Face, Vans, Lee
- Luxottica
- Michael Kors
- Gap
- Hanes Brands
e. Are There County or State Regulations or Zoning Laws for Clothing Line Business?
Yes, there are county or state regulations and zoning laws for clothing line businesses, and players in this industry are expected to work with the existing regulations governing such business in the county or state where their business is domiciled.
f. Is There a Franchise for Clothing Line Business?
Yes, there are franchise opportunities for a clothing line, and here are some of them;
- fab’rik – Investments: $113,700 – $190,800
- Copper Penny – Initial Investment – $189,850 – $414,900
- Kid to Kid – Initial Investment – $301,763 – $484,763
- Big Frog – Initial Investment – $114,501 – $244,800
- Winnie Couture – Investment – $299,000 – $550,000
- Children’s Orchard – Investment – $115,600 – $197,000
- Pro Image Sports – Initial Investment – $155,500 – $536,700
- Hometown Threads – Initial Investment: $165,000
- Klein Epstein & Parker – Initial Investment – $135,617 – $241,467
- Style Encore – Initial Investment – $264,200 – $398,400.
g. What Do You Need to Start a Clothing Line Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Production Facility and Showroom
- EIN (Employer Identification Number) / Federal Tax ID Number.
- A Corporate Bank Account
- Equipment, Machines, and Raw Materials
- Employees
- Startup and Working Capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a clothing line business are;
Creative Clothing Line Business Name ideas
- Loveth® Clothing Line, Inc.
- Tine and Tyler® Clothing Line, Inc.
- Clothe Nation® Clothing Line, Inc.
- Ted Capstone™ Fashion Brands, Inc.
- Esther Lane® Clothing Line, Inc.
- Al Baroness® Clothing Line, Inc.
- Lady Annie® Online Clothing Line Company
- Macron Martins® Clothing Line, LLC
- High End® Clothing Line, Inc.
- Nelly B® Clothing line, Inc.
- Maria De La Rosa® Clothing line, Inc.
- Stacy McRib ™ Clothing Line, LLC
- Bridget Decoster™ Clothing Line, Inc.
- Broadway™ Clothing Line, LLC
- Mark Fernand Clothing Line, Inc.
- Jacinta Borrow® Clothing Line, Inc.
- Eyes of Beholder© Clothing Lines, Inc.
- Georgina Paulson™ Clothing Line, LLC
- Jill Noel™ Clothing Lines, Inc.
- Madonna Whyte® Clothing Line, Inc.
Register Your Business
a. What Type of Business Structure is Best for Clothing Line?
Even though there are several options when it comes to the business structure for a clothing line, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Clothing Line?
- General Business License
- Seller’s Permit
- Fire and Safety Permit (Fire certificates)
- Federal Export Licenses
- Zonal Permits
- Signage Permit
- State Occupational Licenses
- Operational State Facility Inspections (Building Permits)
d. What Type of Certification is Needed to Open a Clothing Line?
You don’t need any certifications to open a clothing line.
e. What Documents are Needed to Open a Clothing Line?
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a clothing line, you may need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to have cause to challenge anybody in court for illegally making use of your company’s intellectual properties especially as it relates to your designs or logo et al.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Clothing Line?
When it comes to starting a clothing line business, the startup costs vary and it can range from $10,000 to over $500,000.
b. What are the Costs Involved in Starting a Clothing Line
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the clothing line in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- Cost for hiring a Business Consultant – $2,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
- Cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $53,300.
- Cost for facility remodeling (construction of racks and shelves) – $5,000.
- Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for equipping the production factory – $45,000
- The cost for start-up inventory (materials, sewing supplies and packaging materials et al) – $25,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- Cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
- The cost of Launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Clothing Line?
- The size of the clothing line
- The choice of location
- The required licenses and permits
- The type of clothing line business
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the clothing line business
- The cost for furnishing and equipping the facility
- The cost for insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms for your employees
- The cost for the grand opening of the clothing line.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Actually, it is not compulsory to build a new facility for your clothing line, but, if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility for your clothing line will give you the opportunity to come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Clothing Line?
- Rent and lease
- Supplies and inventory (materials, sewing supplies, and packaging supplies)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Maintenance of machines
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief Executive Officer (President) – $40,000 Per Year
- Factory Manager – $30,000 Per Year
- Merchandise Manager – $29,630,000 Per Year
- Fashion Designers – $29,000 Per Year
- Accountant (Cashier) – $28,500 Per Year
- Marketing and Sales Executives – $28,000 Per Year
- Tailors – $26,100 Per Year
- Customer Service Executive – $26,000 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Clothing Line
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and your friends.
Write a Business Plan
a. Executive Summary
Broadway™ Clothing Line, LLC is a standard clothing line business that will be located in an industrial area in Fort Wayne, Indiana. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of a long-term renewal on terms and conditions that are favorable to us. The facility has government approval for the kind of business we want to run and it is easily accessible.
b. Products and Service
- Casual Wears (Jeans, Tee Shirts, Polo, Shorts, et al)
- Children and Babies Clothes
- Robes and Uniforms
- Corporate Clothes (Shirt, Pants, Jackets, Suits, Blazers, Ties, et al)
c. Mission Statement
Our mission is to build a highly successful clothing line whose brand will be known all around key cities in the United States of America and the globe.
Vision Statement
Our vision is to be among the top 3 clothing lines in the whole world.
d. Goals and Objectives
The goal and objective of a clothing line are to produce clothes for the general public.
e. Organizational Structure
- Chief Executive Officer (President)
- Factory Manager
- Merchandise Manager
- Fashion Designers
- Accountant (Cashier)
- Marketing and Sales Executives
- Tailors
- Customer Services Executives
- Security Guard
Marketing Plan
a. SWOT Analysis
Strength
- Ideal location for a clothing line
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Excellent customer testimonials.
- Unique design and styles
Weakness
- Financial Constraints
- The new business will be competing with well-established clothing brands.
- Inability to retain our qualified employees longer than we want
Opportunities
- A rise in people who want to join fashion trends
- Online market, new services, new technology, and of course the opening of new markets
- Increase of the numbers of the human population within our target market area.
Threats
- The arrival of a new clothing line within our market space
- Unfavorable government policy and regulations
- Economic uncertainty
- Liability problems
b. How Do Clothing Lines Make Money?
Clothing lines make money by selling a wide range of clothes.
c. Payment Options
- Payment via bank transfer
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Place adverts on both print (newspapers and fashion magazines) and electronic media platforms
- Sponsor relevant community-based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- Contact corporate executives, students, entrepreneurs, business people, celebrities, sportsmen and women, tourists, and every adult in the neighborhood where your clothing line will be located informing them about your business and the products you retail
- List your clothing line in local directories / yellow pages
- Advertise your clothing line on your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your clothing line is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are well branded with your company logo et al.
Financial Projection
a. How Much Should You Charge for your Product?
Generally, the price of clothes depends on the type, size, and brand of the product.
b. How Much Profit Do Clothing Line Owners Make a Year?
It depends, but available reports show that the national average earnings for clothing line owners are approximately $51,000 per year. Clothing line profits can average between $23,751 and $140,935, depending on your location, line specifics, expenses, marketing efforts, and company size.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the clothing line
- The location the clothing line is covering
- The management style of the clothing line
- The business approach of the clothing line
- The advertising and marketing strategies adopted by the clothing line.
- The number of years the clothing line is in business
d. What is the Profit Margin of a Clothing Line Service?
Typically, clothing lines gain a handful of profit on all the products. Margins usually range from 20% to around 60-70%. So, the revenue you would be making will be based on monthly sales.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $240,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $480,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Clothing Line?
- The demography of the location
- The demand for clothes in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of clothing lines and other fashion outlets in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Clothing Line?
- Las Vegas, Nevada
- Los Angeles, California
- Chicago, Illinois
- Boston, Massachusetts
- Silver Spring, Maryland
- Rowland Heights, California
- Portland, Oregon
- New York City, New York
- Atlanta, Georgia
- Dallas, Texas
c. What Equipment is Needed to Operate a Clothing Line?
- Industrial sewing machines
- Pattern makers for crafting designs
- Women and men dress forms used for garment building
- Scissors
- Hole punchers
- Straight and curved rulers
- Pencils
- Measuring tapes
- Notchers for marking seams.
- Pins
- Slopers
- Dotted pattern paper.
- Sewing machine needles
- Hand sewing needles.
- Threads
- Sketching books.
- Drapings tools.
- Dressmaking Stickpins
- Muslin
- Style tapes
- Fabric shears
- Soft lead pencil
- Marking pen
- Pattern plotter.
- Pattern-making software.
- Computer
- CAD tools for designs
- Digital drawing tools
- Digitizer board for pattern scanning.
- Heat transfer machines for T-shirts.
- Print tables.
- Racks
- Slat wall
- Mannequins
- Hangers
- Labels and Tags.
- Packaging materials
- Industrial pressing irons
- Supply of fabrics
Hire Employees
When it comes to hiring employees for a standard clothing line, you should make plans to hire a competent chief executive officer (president), factory manager, merchandise manager, accountant (cashier), marketing and sales executives, tailors, fashion designers, customer service executives and security guard.
Launch the Business Proper
No clothing line opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the clothing line, you will be able to officially inform people in your city that your clothing line is open for business.
a. What Makes a Clothing Line Business Successful?
- Choose a good location and showroom facility to launch the business
- Make sure your clothes and unique and the finishing is topnotch
- Throw a party before officially opening the clothing line
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your clothing line business
- Leverage on all available online and offline platforms to promote your clothing line
b. What Happens During a Typical Day at a Clothing Line?
- The production factory is open for the day’s work
- The facility is cleaned and well-arranged
- Factory swings into action (production of clothes)
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Clothing Line?
- Good fashion design sense
- Excellent tailoring skills
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining and bidding skill
- Work experience in a clothing line environment
- Experience in managing people
- Experience in business administration.