How to Start a Clothing Business

Everything you need to know about starting a clothing business – in one place!

Research & Refine your Business Idea

Want to start your own clothing business but don’t know how and what’s needed? Continue reading and find out all of the answers to your questions. This article will explain everything from refining your business idea, setting goals, planning finances, marketing your business, to legal requirements for starting a clothing business.

You have your amazing business idea in mind, so what’s next? You need to do research and refine it. Think in details about every segment required for your business so that you make your way to success easier and smoother.
First, choose a niche – a specified, narrowed market that falls under the umbrella of clothing, which is the broad market. Imagine that your clothing shop sells all kinds of attire. This will make people confused, and they wouldn’t be sure what to look for in your shop. Otherwise, having a niche will help you target and attract a specific audience which will usually lead to having loyal customers.

Hence, deciding on a niche is very important. For example, you may narrow your market and determine if you’d sell children’s clothes, either man’s or woman’s clothes, or maybe both but in a specific style like casual, sophisticated, vintage, rocker, sports, or any other fashion style.

Choosing a location is what you should think of next. Opening a clothes shop in a mall sounds terrific, but it is quite expensive. So, if your budget is tight, you’d better look for an area of potential growth, somewhere with lots of cafes, restaurants, offices, i.e., a place where people usually hang out or work. Make sure you also study the competition in that area. Visit some shops and try to understand what your competition is doing well or bad so that you can do it better.

Creating your Business Website

Apart from having a physical store, you should also create a website for your clothing business. Nowadays, online presence is one of the most important factors for running a successful business in any industry. When people want to find a shop, they first do their google search, and then they actually go to the physical store.

Setting up a website isn’t as hard as it may sound, in-fact, many hosting providers have tailored their service around small businesses who may not be tech savvy. We suggest going with BlueHost to host your website, they’re service is simple and easy to use/setup and they’re currently offering 60% off hosting, including free domain registration.

Additionally, creating a blog on your website is also a great way to attract organic traffic and expand your business. Checkout our full guide on the best and easiest way to setup a WordPress blog here.

Your website should also feature a landing page which will present your new season (spring, summer, autumn, winter) designs or some special offers or discounts. Plus, include a Google map so that potential clients, who don’t know where your business is located, find your shop easily. And, make sure to include your clothing items with a description and maybe reviews.

Some Google tools can also come in handy. For example, you can use Google Analytics for tracking the traffic on your site and for having detailed insight into your audience demographics.

Get Ideas for your clothing business name!

Marketing Your Business

When running a brick and mortar business, the scope of marketing strategies you can apply is enormous. The traditional, but still effective and necessary, is window display. Use your creativity and design your shop windows with different textures, materials, colors, and of course, your clothing items. But, don’t forget to change it frequently and use proper lighting.

Using visible signs and print marketing is yet another effective way to attract customers’ attention. This is crucial if your business isn’t in a shopping mall or in a well-known shopping street.

Print brochures, catalogs, or flyers, and put them on bulletin boards infamous coffee shops, business centers, bookstores, universities, or anywhere else you can think of or pass out your business cards containing your logo, name, address, and website URL. If you have a good budget, you can also advertise your shop in newspapers or send out a marketing postcard campaign.

And, since we all know that people love saving money, you can use sales and special promotions and coupons to give your business a little boost when there isn’t much work. Make your sales even better by offering customers some drink or sweets during pre-determined special hours. Thus, you will increase traffic and liquidate clothing that is leftover.

You should also consider social media marketing and create profiles for your clothing shop on different social networking platforms. By sharing your items and offers online you will target and attract a diverse audience rather than just people who live or work in your neighborhood or pass by your shop.

Setting Goals and KPI’s

Key performance indicators are measurements that demonstrate how effectively a company is meeting its business goals. If you keep track of such metrics, you will be able to determine which areas of your business need improvement and set new objectives and goals to achieve. The typical KPI’s for a clothing shop are the following:

  • Average Time on Shelf
  • Shrinkage (spoilage, shoplifting, and damaged merchandise)
  • Sales per sq ft-trend
  • Store lease of revenues
  • Conversion of foot traffic to sales
  • Sales per representative
  • New customers directly after a promotion
  • Customer concentrations
  • Profitability of different brands
  • The link between buying patterns and position in the store
  • Gross revenue per employee
  • Gross profit per employee
  • Time-of-day patterns

Don’t forget to try our clothing business name generator!

Plan your Finances

The truth is that starting a clothing business, as well as any other type of store, requires having a solid budget. There are many on-going expenses that will accompany you such as shop rental fees, utility, employee, marketing costs, etc.

So, if you are short on budget but have a viable business idea in mind and your company is creditworthy, you can turn to banks. Banks will usually offer two types of finance – loans, and overdrafts. Regarding the first, you may choose to have a fixed or variable rate of which the first one is usually more convenient since you’ll know the exact amount of money you need to pay every month and when your load will be repaid.

On the other hand, an overdraft gives you more flexibility but less security. To be more precise, you’ll be only charged for what you borrow, but the bank can demand you to repay at any time.

Peer to peer (P2P) lending, also referred to as crowdfunding, is an alternative finance method that’s growing its popularity. In this type of finance, small businesses get money from private lenders through an intermediary network. The lender can also become an investor and buy equity in the business. P2P is often cheaper than bank lending. However, most crowdfunding platforms charge a flat fee on money invested.

Regardless of the type of finance you choose, bear in mind that you should plan your finances wisely and always know how much your monthly expenses will cost. And, think about saving some money for the rainy days, so that you are prepared if something unexpected happens.

Adopt an Entrepreneurial Mindset

Coming up with a brilliant business idea won’t make you successful overnight. Instead, you should train your mind, adopt an entrepreneurial mindset, and act towards activities and outcomes. Once you embrace it, you’ll be drawn to opportunities, innovation, and value creation.

Accept that constant learning goes together with growing, i.e., if you want your business to grow you should seek knowledge and invest in yourself and your skills. For example, you need to work on your marketing skills if you want to increase traffic to your shop.

Luckily, there are plenty of books that can help you embrace an entrepreneurial mindset such as:

  • Crushing It: How Great Entrepreneurs Build Their Business and Influence-and How You Can, Too by Gary Vaynerchuk
  • Startup Opportunities: Know When to Quit Your Day Job by Sean Wise and Brad Feld.
  • The Power of Broke: How Empty Pockets, a Tight Budget and a Hunger for Success Can Become Your Greatest Competitive Advantage by Daymond John.
  • The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries.
  • The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz.

Plus, there are also certain podcasts dedicated to the fashion world which may inspire you and help you improve. Some of these include:

Other things to consider when starting your clothing business

Legal Requirements
The first thing you should consider when starting any kind of business, including clothing, is the business structure. There are five common forms you should choose from including Sole Proprietorship, Partnership, Corporation, Small Corporation, and Limited Liability Company (LLC).

However, for the fashion and clothing industry, the best options are Sole Proprietorship and LLC because both of them are start-up friendly and beneficial for small business owners.

Accounting & Bookkeeping:

The second legal requirement you should think of is whether your city requires business registration. In general, most cities demand that business owners register to do business in their city. Plus, you should get a Federal Tax ID Number. If you have employees, Employer Identification Number is needed for the IRS.

Hiring Employees:

And, of course, you’ll need to hire employees. Search for someone representative, organized, and positive. Make sure that they will consider customer service their number one priority and that they will work hard towards achieving your business objectives.

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