Setting Up Your Clothing Line
A passion for design – but business too
Having an entrepreneurial spirit is a great quality, and starting your own business is an exciting venture. If you’re passionate about aesthetic and design, then starting your own clothing line is something you might be considering.
Becoming a business owner in the fashion and textiles industry brings great opportunity. After all, UK consumers spend close to £45 billion on clothing. However, there is aggressive competition in the industry, with 34,045 businesses operating in the sector in 2020.
This means that you need to be prepared for multiple challenges and risks, and work hard to achieve your goals. These goals won’t be reachable if you don’t understand how a business works, who your competition is, and what your target market looks like.
That’s where we come in to help.
Your clothing line business plan
The road leading up to your launch will be lengthy, but before you begin your journey, you need to have an airtight business plan (with room to adapt as you grow, of course). Some elements in your business plan might include:
- Your business’s concept (test these ideas through an online survey to your potential target audience)
- Thorough market research on your competitors and target market
- A SWOT (strengths, weaknesses, opportunities, and threats) analysis
- What your marketing plan will look like
- What your pricing strategy will look like
- Recruitment (if applicable)
- Budgeting (planning) and financial forecasting (predicting)
Setting a realistic timeline before you start
As ambitious as you might be, starting a sole proprietorship takes time. You need to have a solid foundation to support you, and it will take a while to set up this foundation.
We recommend setting a 6 and 12-month milestone to achieve specific objectives, with a buffer in case there are unforeseen circumstances. This will ensure that by the time you are up and running, you’ll have funding in place, a location (if applicable), a marketing strategy and a team (if necessary).
Register your small business
You can register your business on the UK Government website, regardless of if you are a sole trader, limited company, or partnership. It is also relatively cheap to register your small business, costing between £12 and £100 depending on the process you take.
You can also register a limited company using Tide, which offer a streamlined process and assist you in opening a business bank account.
The costs involved in starting a clothing line
It is possible to start a clothing line with minimal financial resources, as materials and equipment can be relatively cheap – especially if you’re only online. However, you’ll need to have cash reserves to cover stock, marketing efforts and overheads as you grow. According to Make It British, 50% of start-up brands spent more than £15,000 to launch their business.
The true amount of what it would cost to start a clothing line will vary, but you’ll need to consider the cost of:
- Prototyping
- Stock (including materials, manufacturing)
- Shipping costs
- Marketing (including advertising and building your website)
- Legal fees and insurance
If you’re planning on pursuing a brick-and-mortar direction, then you’ll need to consider:
Cost of renting a shop
This will vary depending on where your location is. The average cost to rent a retail space in London (West End) is £14,355 per square metre annually. London City is £1,898, Manchester is £1,545, and Cardiff is £1,030.
You can also consider renting out a space for a short amount of time (for your product launch, for example) using Storefront.
Cost of buying a shop:
You may have enough saved up to buy a retail space for your clothing line. Like renting a space, the cost of this will depend on your location, the size of the premises, its facilities, permissions, and security.
It’s possible to find a commercial property for less that £100,000 in London. It’s also possible to find a commercial property for less than £50,000 in Manchester.
Cost of hiring a team:
If you’re planning on launching your clothing line on your own and purely online, then it is likely that you will fill most of these roles yourself. However, it’s worth understanding what some common roles are for a fashion brand, and what an annual average salary is for each role (this will change depending on individual experience and skills). Your team may consist of:
Marketing manager: £35,000 - £40,000
Sales manager: £35,000 - £40,000
Market researcher: £23,000 - £30,000
Fashion Designer: £19,000 - £36,000
Production manager: £36,000 - £40,000
Photographer: £20,000 - £30,000
Retail store manager: £25,000 - £28,000
Find out more: Need funding? Check out our guide on small business grants.
Your pricing structure
A clothing line falls into an industry with aggressive price competition, so it is important to implement a pricing strategy that will gain an advantage in a competitive industry, but also take into consideration your cost per unit (CPU).
Your CPU will include costs like production, shipping, storage fees and rent (if applicable) – amongst other variables. Of course, your selling price will need to ensure you make a profit.
To determine your pricing strategy, you can use a keystone or absorption pricing method.
Keystone method
This method is most common, taking the cost of the product and doubling or tripling it to sell to a retailer.
Absorption method
This method is more technical, as it includes a formula that adds manufacturing costs to overheads and administrative fees – divided by how many units you’ve produced. This ensures you receive a solid profit margin.
There are other pricing strategies you can consider for your small clothing line, and your method will depend on your objectives, target market and production capabilities.
Are there any clothing line regulations you need to know?
The United Kingdom doesn’t have strict laws in place for the clothing industry, but you will need to make sure you comply with certain trading Acts, like the Sales of Goods Act, the Supply of Goods and Services Act, and the Sale and Supply of Goods Act.
You’ll also need to do your research on labelling. In the United Kingdom, there are certain laws that you’ll need to abide by when it comes to clothing labels.
There are common elements of labels that most apparel companies include (which you’ve likely seen before), but some of these aren’t legally required in the UK. Nonetheless, some things you’ll need to consider are:
- Care labels (how to wash an item of clothing)
- Fibre content (like cotton, polyester, wool etc.)
- Flammability
If you are planning on designing your apparel by yourself and sourcing local materials to do so, we recommend including a ‘Made in Britain’ label. This not only has a positive impact on consumers, but also promotes authenticity.
Tax obligations
Taxation – including employment tax if you hire employees – is a crucial element of any business. As an entrepreneur wanting to start your own clothing line, you’ll be self-employed, so you’ll need to register with HMRC and do some research on self-assessment tax.
Insurance
Insurance is an important product for anyone, especially small business owners. If a customer makes a complaint against you, insurance can protect you if – especially if it is a legal complaint.
Some insurance products you’ll want to consider include:
- Public liability insurance
- Products liability insurance
- Employers liability insurance (if you plan on employing people)
- Cybersecurity insurance (this is crucial if you plan on growing into an ecommerce platform)
- Insurance to protect your stock in terms of shipping and damages
Trade marks
Trade marking is an important action if you want to protect your brand and take legal action if someone uses it without your permission. You can register a trade mark on the UK Government website.
Getting funding to start your clothing line
Obtaining capital to start and grow a business is a pain point for many entrepreneurs. Not everyone has access to large sums of money, and a solid cashflow can be difficult to maintain for small businesses.
However, there are avenues you can research for financial support. You can consider small business grants, which offer funding that does not need to be repaid, but will require a rigorous application process.
Alternatively, you can consider different loans to buy a business, which may be more manageable and accessible, but this will need to be repaid with interest.
You can also consider angel investors - individuals with access to significant capital. They invest this capital in start-ups with potential, in exchange for equity or convertible debt.
The Design and Manufacturing Stage
Of course, designing, sourcing suppliers, and manufacturing your product is a significant step. After all, you won’t have a clothing line without clothes.
As an enthusiastic designer, conceptualising and bringing your ideas to life may be the part you’ll look forward to the most! But researching suppliers and manufacturers may be an arduous task depending on your model. You’ll need to conduct appropriate research (either through directories, forums, social media, or friends) to find out what your best option would be.
Some models you may consider are:
Doing it yourself
If you are planning on running a small, home-based business where you design and make the items yourself, you’ll still need to find someone who supplies the materials to your specifications.
This option will become time-consuming and difficult to manage the more your business grows, so you may need to consider finding a manufacturing and distribution partner.
Bulk production through a manufacturer
As your business grows, you’ll need to delegate responsibilities so you can prioritise other elements of your business.
You may need to find a credible manufacturer that can produce your clothing for you. If you do this, you need to decide if you want CMT (cut-to-measure) or FFP (full package production) services.
Make it British offers a directory of UK manufacturers, so be sure to explore your options.
For both options, you need to have a detailed tech pack so you can generate samples and bulk products. A tech pack includes every nuance about the item you want to produce, including measurements, colours, materials, care and packing instructions and more.
If you are not confident in producing a tech pack on your own, it may be useful to invest in a tech pack session – like a lecture – where you can bring your ideas to life with the support of experts.
Generating Awareness – Why Marketing is Important For Your Clothing Line
Without a marketing strategy, you will not own a successful business. Every clothing company, not matter how small, needs to generate awareness of its product to reach consumers.
Before you begin marketing your clothing, you need to know what your brand represents. Your brand will be defined by your target market (e.g., gender, age, behaviours, psychology), so it is important to incorporate a logo, colours and creative elements that reflect this.
Most importantly, your branding needs to be consistent, from labels, to your website, to emails. Modern consumers expect a seamless shopping experience, so this is particularly important if you plan on creating an ecommerce store.
Effective multichannel strategies are increasingly becoming a prerequisite for successful online clothing brands, so we recommend conducting a bit of research on it.
Your online and offline presence
Regardless of if you choose to operate solely online or in a brick-and-mortar setting, you need to have a presence online and offline.
Of course, you’ll need to have a website. Whether the website is solely for promotion, or you want to sell products through it is entirely up to you. The good news is that you don’t necessarily have to spend thousands of pounds on coding your own website. You can use website builders like:
If you plan on building a website on your own, you can expect to pay between £13 and £220 monthly. If you plan on outsourcing these services, expect to pay between £200 to £10,000 for the project.
Of course, you can consider selling your products on online marketplaces, which is a popular method for most small business owners. Some popular ecommerce platforms you can consider include:
- BigCommerce
- Etsy
- Amazon
- Facebook Marketplace
You can also consider marketing your products in department stores, markets, or boutiques. This offline marketing will generate a significant amount of exposure for your brand, and it will also give you the opportunity to meet some of your shoppers.
Social media – a building block to success
Your social media presence is extremely important. If you want to run a successful clothing business, you need to be active on at least two to three social media platforms. Instagram, TikTok, Pinterest, Twitter, Facebook - the choice is yours!
However, having a profile with a few images, videos and hashtags is not enough. Social media marketing is a giant on its own, and there are entire agencies dedicated to managing a company’s social media presence.
Be consistent with your post scheduling, invest in high-quality images and rich media, and use the tools that each platform gives you (like highlights and product tagging for Instagram, TikTok Shop, or Pinterest Shop). This may be a headache in the beginning, but once you’ve optimised your strategy, you’ll see your sales increase exponentially.
Trade shows
Another important part of your brand positioning to consider is attending tradeshows. Tradeshows are crucial to developing relationships, and allows you to network with industry experts, suppliers, designers, manufacturers, and agencies.
Some clothing and textile tradeshows you should attend are:
There are many more tradeshows around the United Kingdom. You can explore them here.
Find out more: Need more advice on this sector? Read our sector-specific articles.
Conclusion
If done right, starting a small business brings multiple rewards, but this is not always the case. Business development is not easy, and for some, it can become a miserable experience. Therefore, many entrepreneurs choose to buy an existing business instead of building one from the ground up.
There are several advantages to buying an existing clothing shop: the business structure has already been established, a customer base exists, and the business’s brand might already have a strong presence. If you’re considering buying a clothing shop, you can browse through opportunities on our site.
While buying an existing business may not afford you the excitement and fulfilment of creating your own business entity, it still has many advantages. It is up to you to decide what option will suit your capabilities and financial situation. Whatever route you choose, you still need to educate yourself on how to run a clothing business.
We hope that this guide has offered you a practical and well-rounded breakdown of how to start a clothing line, and we wish you a successful business journey. If you have any questions, or you’d like to connect with someone from the team, feel free to contact us.