George Harrison
If you have a passion for fashion and an eye for design, then launching your own clothing line is a great way to put those skills to good use. Starting your own fashion business not only means embarking on a creative and hopefully fulfilling venture – you’ll also get to become your own boss, call the shots, and join a growing and rapidly innovating industry.
Starting a fashion business may seem daunting, but with our simple five-step guide we’ll show you how to get your vision off the drawing board and on to the runway.
Why start a fashion business?
There are many reasons why you might want to launch your own fashion business:
- Creative career: Designing your own clothing line will require vision, dedication, and creativity. This could potentially make for a very rewarding career – particularly if you are a creative person with a longstanding interest in fashion.
- Growing market: The fashion industry is worth £21 billion annually to the UK economy. Fashion is the UK’s 15th largest industry, and the sector is growing and innovating all the time – so there is technically a lot of room for your business to grow too.
- Sell your products online: The internet has been revolutionary for fashion businesses. More and more people are now buying clothes online, and the internet has made it easier than ever to sell clothes through existing ecommerce sites.
- Be your own boss: Many people dream of working for themselves, and if you set up your own fashion business you’ll be your own boss. This means you’ll have complete control over the direction of your fashion business, deciding everything from what to sell to how much you’ll charge.
Start a fashion business in 5 steps
1. Research and choose your market
The objective of market research is to find out more about your potential customers and competitors, a process that will leave you better prepared to make a success of your fashion business. The fashion industry is extremely competitive, so thorough market research is an essential first step.
Your fashion business will stand the best chance of success if you can find a niche to occupy. This means paying close attention to what other fashion brands (your competitors) are already offering. See if there are any groups of people whose needs are being overlooked by existing fashion brands. If you can identify – and occupy – this gap in the market, then your fashion business is more likely to stand out and, ultimately, succeed.
You can manage market research in several ways, including conducting online research, talking to industry customers and competitors, or going to rival stores and locations to check out the competition. Since so many clothes are sold online, you can use the internet to look at popular fashion brands. Pay attention to the clothing lines already on offer, noting materials, prices, and the cost and speed of delivery.
With market research of this kind, the two most important questions are:
- Is there demand for my product?
- Which customers am I targeting?
You should also use this research to decide what type of fashion business you want to create. Do you want to launch a high-end line of formal clothing, or would you rather run a fashion business selling leisurewear, gym gear, or casual apparel?
It’s also important to decide how you want to market your fashion business. This means deciding on a brand name – something your customers will recognise you by. You’ll probably want to choose a name that stands out yet says something about your business: who you are and who your fashion line is for.
Another key consideration when starting a fashion business is whether you wish to design and manufacture your own clothes, or whether you would rather outsource some business operations to a supplier. Fashion companies generally follow one of three business models:
- Buy clothes from wholesalers and sell them on to customers.
- Design their own clothes and have them manufactured elsewhere.
- Design their own clothes and make them themselves.
Try to play to your strengths when you decide which kind of fashion business you’d like to launch.
Regardless of which fashion business model you choose, the more market research you do, the better you’ll understand the fashion market. And a clearer picture of the fashion market will enable you to make all these big decisions with confidence.
» MORE: How to Start a Dropshipping Company
2. Create a budget for your fashion business
Creating a business plan and budget will help give you a better idea of exactly how much money you need to launch your fashion business. Writing out a plan may also help you to work out if your ideas can realistically be turned into a business. Also, a business plan will normally be required if you apply for a start-up loan or business loan.
For a more detailed guide, read our article on how to write a business plan.
How much money you need up front will depend on your business model. Bear in mind that you may also wish to set aside some money for marketing your fashion brand.
If you plan to make your own clothes, you’ll need to buy materials and equipment – such as a sewing machine and fabrics. If you plan to print T-shirts or tops, you can also do this at home. You’ll need a screen-printing kit, specialist ink, and T-shirts. Wholesalers may sell blank T-shirts for as little as £1 per unit.
If you start small, and begin by producing clothes at home, you’ll save yourself from paying large sums for warehousing or production. You can then expand your operations as your business grows.
For a more detailed guide, explore our five-step guide to creating a small business budget.
3. Register your fashion business
Before you start up your fashion business, you will need to choose a business structure. Then you’ll be ready to take one of your first official steps: registering your business. You should take your time and research which business structure will best suit your needs:
- Sole trader: A sole trader is the exclusive owner of a business. If you become a sole trader, you’ll get to keep all post-tax profits. But being a sole trader also means there is no separation between you and your business – making you personally responsible for any losses your business makes. If you go down the sole trader route, you will need to register for self-assessment, so you can pay HMRC the tax due on your income.
- Partnership: A business partnership is when two or more partners share the responsibilities, risks, profits and losses of a business. The three main types of partnerships are general partnerships (also known as business partnerships), limited partnerships and limited liability partnerships. You will also need to register for self-assessment if you are the ‘nominated partner’ – the person responsible for sending the partnership tax return. Partners will also need to complete their individual tax returns.
- Limited company: Incorporating as a limited company makes you legally and financially distinct from your business. As a limited company, you will have shares and shareholders and can keep any post-tax profits. You will need to register as a limited company at Gov.uk. Limited partnerships and limited liability partnerships will also need to register their business at Companies House.
» MORE: Should I register as a sole trader or limited company?
There are no specific licensing requirements to sell clothing in the UK, so you are unlikely to encounter any regulatory hurdles in setting up your fashion business. The only exception is if you plan to sell clothes at a market stall, in which case you will need a market stall licence. Visit Gov.uk for more information and to apply.
Any products you sell will have to comply with the Consumer Rights Act 2015. The Consumer Rights Act obliges you – as the seller – to ensure your products are described accurately to customers, are fit for purpose, and are of satisfactory quality. A breach of the Consumer Rights Act will allow your customers to return any faulty or defective product for a full refund up to 30 days after they bought it or it was delivered. From 30 days to six months, you do have the option of offering to replace or repair the faulty item before offering a refund.
It’s also important to ensure any clothes you sell are accurately labelled. Your fabric supplier or manufacturer should be able to provide you with the necessary information for your labels. This includes fabric content, country of origin, flammability, and care instructions.
You may also wish to consider trademarking your clothing line, which may protect your fashion business from any legal disputes later on.
4. Fund your fashion business
It may be possible to launch a fashion brand in the UK for as little as a few hundred pounds. But while you don’t have to break the bank to get your fashion business off the ground, bear in mind that any business needs money to get going and before trading actually starts.
Once you have created a budget and registered your fashion business, you are ready to seek funding. You may need to combine the various funding options below in order to get your fashion business off the ground.
- Personal savings: Using personal savings to start your fashion business means you will keep full ownership of the business. Just be careful not to endanger your financial health in the process.
- Friends and family: Borrowing money from friends and family can be tricky. It’s generally best to draw up a written agreement before you borrow any money in order to avoid any disagreements in the future.
- Small business grants: There are a range of non-repayable and partially repayable start up business grants across the UK, as well as those based in Scotland, Wales and Northern Ireland.
- Government business loans: Different government business loans may be available for your fashion business, depending on where you are in the UK.
- Business loans: A traditional small business loan might be difficult to secure when starting up a fashion business, but it is not impossible. Consider the range of loans on offer and which would suit your business best.
- Angel investors: Angel investors tend to be wealthy individuals looking to invest in new businesses in exchange for equity or convertible debt.
- Crowdfunding: This involves securing funding from more than one source in exchange for things like equity or early access to products. Crowdfunding often takes place through an online campaign.
You will also need somewhere to put the money you’ll use to start your fashion business and keep it running.
While sole traders and general partnerships can continue to use a personal bank account for business transactions (if the bank allows), the moment you incorporate as a limited company or partnership, you need to keep your business finances separate, so opening a business bank account is a good idea. You may also find it easier to keep business funds and transactions in their own separate account, no matter what your business structure is.
5. Find your first fashion customers
If you’re planning to sell directly to customers, consider whether you want to use an online marketplace like Amazon or Etsy to make your products visible to a wide audience. If you also want your fashion line to be stocked on the high street, then consider which retailers to approach.
If you’re planning to sell through an existing ecommerce site, then you’ll need to set up an online storefront on one of these platforms. You may also want to set up a website for your fashion business to raise your profile and draw customers to your products. All of this can be addressed by writing a marketing plan.
When putting together your marketing plan, it’s important to consider the competition. How do rival fashion brands reach their customers? What distribution and marketing channels do they use? See if you can learn from your competitors and adapt your strategy accordingly.
You may also want to consider advertising your fashion brand online. Social media can be a powerful tool for reaching new customers. Paying an influencer to promote your products (known as influencer marketing) may also be a viable way to promote your fashion business and get your clothes in front of potential customers.
How much do fashion businesses charge?
Any two fashion businesses may charge drastically different prices based on the type of clothes they sell. As such, it’s very difficult to put a number on how much fashion businesses in the UK charge. You can buy a T-shirt from a fast fashion company like Primark for as little as £2.50, while designer dresses at the top end of the market may retail for many thousands of pounds.
For fashion retailers, the buying margin for a typical fashion product has been estimated by multiplying by around 2.7. This means that if a retailer paid £100 for a dress, they would seek to sell it for 2.7 times that price – £270, in this case. Others have estimated that a 2.2x to 2.5x mark-up is typical in the wider fashion industry.
If you plan to sell clothes online, you’ll also need to consider charging a delivery fee. Prices vary from business to business, but most UK fashion brands charge between £3 and £4 for domestic delivery.
If you’re selling clothes online, you may also decide to charge a return fee. In 2022, roughly 17% of online purchases were returned – which is why some online businesses choose to charge fees for returns. Fashion brand H&M charges £1.99 for customers to return items bought online – unless you’re a member of its rewards scheme, in which case, returns are free. Zara charges £2.95 for returns at package drop-off points.
Image source: Getty Images
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