By Katie Lundin
Are you a fashion designer or an apparel entrepreneur?
If you are ready to start a fashion business, here are 5 steps for starting a successful clothing brand or clothing line from scratch.
1. Develop Your Clothing Brand Identity
When you start a new clothing brand, you must first develop your brand identity.
Before you sketch your first rendering, ask yourself these questions:
• What identity do I want my clothing brand to project?
• Who will want to wear my clothes?
• What can customers get from my clothing brand that they can’t get anywhere else?
• What makes my clothing unique? Is it high-end?
• What is the most important part of my customer’s experience?
Your answers to these questions (and others like them) will build the core of your brand.
Your future branding decisions should expand on these ideas. Your company name, your logo design, and your website design should all grow from the concepts you laid out here. For more on building a strong brand identity, take a look at 2019 logo design trends.
2. Fill in the Business Blanks
Once you define your brand identity, you can begin to think about the vitally important details of actually starting and running a clothing company.
First, you will need to choose the legal structure for your new apparel business.
After you determine your business’s legal structure, you’ll need to file the necessary paperwork.
The U.S. Small Business Administration has the info you need to find out what license or permit you’ll need to start a business in your state.
Legal details squared away? Then it’s time to think about the specifics of your business.
Consider creating a simple business plan.
Your plan should include (at minimum) a statement about your clothing brand, a general description of your products and a strategy for how you plan to sell them.
For more information about how to create a business plan, the Small Business Administration has you covered.
3. Crunch the Numbers
For a fashion business, you’ll want to track your sales and profits, but there’s so much more to think about.
Start at the beginning – with your start-up costs. For a clothing line, these costs will include:
• your brand design (logo, business cards, and website)
• any license or permit fees
• deposits and rent for a physical work location if you plan to lease your own workspace
• basic infrastructural costs like phone and internet service, invoicing software, etc…
• marketing and advertising costs
• sewing or design tools (sewing machines, scissors, rulers. fabric printing accessories, etc)
• materials for your first collection (fabrics, notions, and embellishment decor)
• hourly wages to cover your design and construction time
If you plan to hire any employees, you’ll want to budget their wages into your start-up calculations as well.
Once you know how much it will actually cost to get you started, compare that with the funds you actually have. Then plan how you’ll make up any difference.
If you’re starting a Cut-and-Sew line, you’ll need to get in the habit of calculating how many yards of fabric are needed to make your garments so that you can buy enough, but not too much. If you’re planning to work with pre-made wholesale garments, you’ll want to shop for the best prices at your quality point.
Setting Your Prices
To create a smart and effective pricing strategy, you have to start by knowing how much it costs you to produce your clothes – also known as cost-per-unit or “CPU.”
But, the CPU is only a starting point. It’s important to bake the cost of running your business, (and some profit!) into your clothing prices as well. Otherwise, it will be difficult to sustain your business over time.
Toby Nwazor of Entrepreneur magazine recommends that you aim for prices 30% – 50% higher than your expenses in order to ensure a profit. Profit is, after all, essential to your business’s success.
Once you’ve done the math, it’s time to start considering the less-tangible aspects of pricing – competitor pricing and perceived value.
Your potential customers are shopping for more than just your clothes. They’re shopping with your competitors, too.
And, they know how much those clothes cost. Consciously or not, they are gathering data about what they think a product like yours should cost.
That means you need to be aware of what your competitors are charging, too.
You might feel that your products are worth more, or that you want to charge less, than your competitors. And that’s okay.
But, if you’re completely unaware of what your competitors charge, you may miss the mark entirely – either costing you profit if you charge too little or sales if you charge too much.
Perceived value is the amount that a customer thinks a product is worth. And, your competitor’s prices are a part of that perception. But, not the whole picture.
The appearance of your clothing plays a role. A cheaply made shirt that looks fancy may have a higher perceived value than a beautifully made simple shirt. Most customers have no idea how much time, money or effort actually goes into making a particular garment.
Your branding can influence how your product is perceived, as well.
A classy logo and high-end brand positioning will lead to a higher perceived value than discount brand positioning.
So, remember to consider your brand and your competitor’s pricing when creating your own pricing strategy.
4. Build a Web Presence
Your website is one of your clothing line’s most important ambassadors.
Start by ensuring that your website design truly embodies your brand. Visitors should be able to understand who you are and what your brand is about as soon as they arrive.
Your website’s visual design and marketing copy should project your brand’s voice and identity. Here are some suggestions:
• Use your brand’s colors.
• Prominently feature your logo.
• Write copy with your target audience in mind.
• And, showcase your fashion design aesthetic.
In addition to serving as a brand ambassador, your website is also a great venue for showing off your clothing designs to a wide audience.
Consider sharing an online lookbook featuring your fashions, as well as traditional product shots. This will allow your audience to see the styles in action, provide inspiration, and give customers a chance to relate to your designs.
Finally, a strong website design will lend credibility and legitimacy to your business. To learn more about great website design, check out Grow Your Small Business With These 7 Website Design Best Practices and 7 Modern Web Design Trends for 2019.
5. Find the Right Help
Eventually, if all goes well, you’ll hire many employees. But employees must be paid. So, at first, you should only hire for positions that will provide the most immediate benefit to your business.
There’s no one right answer for what those positions might be – every business is different. But when thinking about what positions to hire for, consider what aspects of the business are posing the greatest challenges. And, consider your own limitations.
Hire an employee who is an expert in those areas in which your business is currently lacking. Building a strong, well-rounded team will create a stable foundation for your business.
The Legal Stuff
Of course, hiring staff for your apparel business means that you’ll have to deal with all sorts of the legalities and paperwork. This isn’t an area where you should really “wing it.”
So, we went straight to the source. The hiring experts at Indeed recommend that you:
• Get an Employer Identification Number (EIN) by applying on the IRS website (you’ll get your number immediately after applying!).
• Register with your state’s labor department.
• Fill out paperwork to withhold federal taxes from your employee’s wages.
• Set up workers’ compensation insurance if it is required in your state.
You’ll also need to decide whether you’re hiring full or part-time employees.
Part-time employees cost less. So you may want to start with part-timers. As the business grows and you can afford it, you can expand their hours.
Full-time employees also require more paperwork to get set up. To gain more complete insight into the hiring process, read Indeed’s step-by-step guide, “How to Hire Employees.”
And if you need help with employment or contractor agreements or agreements with your vendors, take a look at Quickly Legal, which offers entrepreneurs, small businesses and startups an easy and inexpensive way to create, sign and manage legal contracts and agreements.
Before you hit the catwalk…
There’s a lot to think about when you’re starting your own clothing line – not the least of which are the clothing designs themselves.
Following these recommendations will help set your business off on the right Jimmy Choo clad foot.
[Katie Lundin is a Marketing and Branding Specialist at crowdspring, one of the world’s leading marketplaces for crowdsourced logo design, web design, graphic design, product design, and company naming services. She helps entrepreneurs, small businesses and agencies with branding, design, and naming, and regularly writes about entrepreneurship, small business, and design on crowdspring’s award-winning small business blog.]