How to Start a Business: Opening a Clothing Company by Stephanie Morrow

How to Start a Business: Opening a Clothing Company

How often do you answer the "wow, where did you get that" question? When you see yet another celebrity launching a new clothing line, do you think "that should be me?" And how many times have you watched episodes of Project Runway you've Tivo-ed? If you're obsessed with fashion, you probably have the dream of all budding designers: to open your own clothing company. With a little know-how, you can be on your way.

by Stephanie Morrow
updated October 12, 2021 ·  5min read

How often do you answer the "wow, where did you get that" question? When you see yet another celebrity launching a new clothing line, do you think "that should be me?" And just how many times have you watched episodes of Project Runway you've Tivo-ed? If you're obsessed with fashion, you probably have the dream of all budding designers: to open your own clothing company.

Just like any business, you need creativity, drive and some solid business knowledge. After all, Coco Chanel went from a little hat shop in Paris to international superstardom. With the right combination of talents, you too may be the proud proprietor of your own clothing company. Continue reading for tips on how to start a clothing company.

Learn About the Clothing Industry

How well do you know the industry? And more importantly, do you have any work experience? One of the best ways to reduce your business's risk of failure is to learn practical ways to make your business succeed. A good way to do this is to take some fashion merchandising and/or business classes, read books about starting a clothing business or work in a store similar to one you'd like to open.

You know your style, it's what inspired your business in the first place, now it's time to name it. Decide upon a brand name that reflects you and is one your customers will remember. Once you've got the name, design a business logo. Your logo should reflect everything all together - your name and your style. Logos are shorthand for your business identity. If your budget permits, hiring an outside design firm to design your logo and accompanying business materials can be a very effective investment.

Target Market

When deciding on your target market, start with the basics. Whom are you trying to dress? Are you designing women's or men's clothing? Are you specializing in adult, children, or both? Do you see yourself selling high-end fashions that would compare to Bloomingdales and Barney's, or is your merchandise more sporty and casual, like Target and Old Navy? What are today's trends and "must-haves" for your target market? Knowing your customers is the first step to running a successful clothing store.

Write a Business Plan

Develop a business plan and use it as an outline for your company. This plan should include - but is not limited to - your overall ideas and logo; specific financial information and projections; a description of your target market; your business policies (hours of services, policy on returns, etc.); employee details; an advertising and marketing plan; and a potential exit strategy.

Determine Startup Costs

Some experts say as little as $50,000 is a good start to opening a clothing company, while others claim as much as $250,000 is the recommended dollar amount. Your business plan can help you allocate how much up-front costs you will need. Start by approximating your yearly rent, cost of goods sold and operation costs. If these numbers are still vague, talk to other business owners who have opened shops similar to yours.

Establish Operating Policies

Running a clothing company isn't a 9-to-5, five-day workweek. One way to keep an out of control lifestyle under some control is to establish operating policies for your company. Determine such facets as store hours, pricing, return policies, and layaway. Consider e-commerce or credit card acceptance, special orders, gift wrapping, and anything else that comes to mind. Operating policies will help guide you in your daily business decisions. Write these policies down and make them available, upon request, to customers.

Choosing a Location

Your store location can make or break your company. When looking at several locations for your site, investigate the surrounding community - is it large enough to support your business? Is it comprised of your target market? Is the economy stable? Does the location have adequate parking? All of these questions should go into your location decision. In addition, make sure your monthly rent is in line with your business plan's projected profit. Nearly all clothing store landlords allocate monthly rent to the square footage of their properties. Make sure the size of your location and the accompanying monthly rental amount is compatible with your business plan projections.

Hire Employees

Hiring employees for a clothing store is different from hiring for other businesses. Like other companies, your employees are a reflection of you and your product. But in the apparel business, your employees' personalities should also reflect your company's image and style. The number of employees will vary depending on your store hours and customer traffic, but the basic rule is one full-time and one part-time employee for a 1,000 square-foot store.

Choosing Suppliers

Without your merchandise, your company will never be in the black. If you are new to the supplier-side of running a clothing store, get recommendations from other business owners who sell similar product, or visit Web sites such as the National Register of Apparel Manufacturers at


After you choose your target market, structure your advertising plan around it. Advertising and marketing your business is the key to getting and retaining customers. Not only do you have to get your name out so that customers will walk through your door, you want to convince them you have something unique that your competition doesn't offer. A comprehensive advertising campaign will help you accomplish this.

If your budget permits, traditional advertising, such as billboard, newspaper, television and radio, will always help get your name out to potential customers. But remember, using coupons, special sales, and in-store promotions (such as a fashion show and buffet in your store), will also spread the word. You can even use yourself as a walking billboard. Wear your own fashions whenever you're out, carry business cards, and ask others what they think about your clothing. You'll be surprised as to how many new customers will come in because of an inexpensive, grassroots campaign.


Attend business expos and fashion shows. Not only will this help you establish your business and publicize your name; you can get great advice regarding financing, networking, and other important aspects of your business. Reading fashion magazines and trade publications is another great way to keep up with the latest trends. Trade associations are another excellent source because they can give you specific information about your particular market niche. Visit the American Apparel and Footwear Association's Web site at for more information. And as with any new business venture, it is important to discuss business options with an attorney.

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Stephanie Morrow

About the Author

Stephanie Morrow

Stephanie Morrow has been a contributor to LegalZoom since 2005 and has written about nearly all aspects of law, from ta… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.