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Open a Company To Start a Clothing Business

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Category : > New Business Setup
Posted On : Fri Sep 23rd,2016

How to Open a Clothing Company?



An Ultimate Guide to Starting a Clothing Business


Clothing business; What you need to know:

Starting a clothing business could be both fun and a great deal of responsibility. There is a vast range of options if you want to start clothing venture. You will have different choices of retail, wholesale, online sale of clothing business. Just like while starting any other business, you need to have passion, interest, creativity and you should be fashion driven.

As fashion designer driven by change and innovations, you need to have thorough knowledge and understanding of changing trends in the market and industry know how.


Basic factors that you should consider while entering into clothing venture:

Know how of fashion & clothing industry: As mentioned earlier, a good knowledge and interest in the same field can help you in the start up. You should analyze how well do you know the market trends, the changing fashions, your target audience preferences or whether you should start with the retail or wholesale. All these things can be summed up in making a business plan. Visit the necessary government websites/offices and grab a list of the permits, fees, laws etc required to get your business off the ground.

Get in touch with the people who can help you comply with the requirements for your business. They can include accountants, contractors, government officials, etc.


Identify the target audience: Many business strategies are based on the marketing approach or the marketing concept, which is that the aim of a business entity is to deliver products or services to customers in a way that meets customer needs better than competitors Make a trip to your preference area where you want to start your business from, identify the choices and preferences of your potential customers. You should take into consideration the age group. The values, attitudes and beliefs of customers and the ethnic structure of society.

Resources/ Cost involved: You cannot start without making a cost benefit analysis that is what you are going to put in the business in terms of money and resources and what benefits and profits you are going to achieve over a period of time. Figure out how much a product is going to cost by getting in touch with potential suppliers via directories and events. Then, find out how much you can sell it for by looking at the pricing of other retail stores.

Analyze the competitors: Customers buy products or services for a reason. When they can choose between two or more competing products, there is a reason why they choose one product instead of another. Research the market to understand the strength of your competitors. Are you planning to operate in the same kind of clothing segments where your competitors are already making good money.


What could be the right choice to start a clothing business:

Now its time to decide on the choice of clothing business like whole sale, retail, fashion/ opening a boutique or selling clothes online. Decide whether you want to sell your products retail or wholesale or if you want to sell clothing online, by mail or at a clothing store.


Wholesale Clothing Business:If you want to start a wholesale clothing business, you need to have some experience in sales and purchase. Establish your contacts with manufacturers by evaluating his credibility, reputation in the market. Further analyze your manufacturers in terms of prices offered and good credit reputation. You can start wholesale business from home and can keep your daily expenses costs low.  You will have to find a retailer who can sell your inventory. Contacts and connections are very important in wholesale business as you will be needing a manufacturer who would supply you inventory as well as a retailer you would be interested in selling your inventory. You can simply incorporate and register your business depending upon the choice of business structure like sole proprietorship, limited liability or corporation.


Retail Clothing Business:Retail clothing business choice is one of the profitable business venture. In retail business, you don’t need to specialize in market trend. You can simply pick up targeted audience and offer clothes for them. You can start by establishing an own retail store or buy a franchise from an established store. Find a wholesale or manufacturer supplier for you clothing products. Decide on the location of your store, its rent that should be affordable. Stock up your store with inventory depending upon the needs of your target audience. You can go to the National Association of Wholesaler-Distributors website at Call the main office and ask them to send you a list of clothing wholesalers.


Fashion designs / Boutique:Opening a fashionable boutique could be a profitable business. All you need to do is to have interest in fashion and know the latest trends and are aware of the changes in the growing fashion market. You must be willing to work passionately because now you are opening your own boutique and are responsible for the outcome of your business. Obtain a vendor’s license, choose a suitable location having reasonable rent, stock up your boutique with latest fashion trends clothing. Make a list of all types of clothing you want to sell. Visit your competitors boutique and note the price they charge. Purchase necessary equipments for your boutique like mirrors, display units, cash registers, lighting etc.   

Online Clothing Business:Starting an online clothing business has an advantage that you don’t need to have a location on rent and properly equipped it. All you need to do is to select your target audience which age group or type of clothing you want to sell online, advertise your online business and make a website to promote your business. There are several online trading auctioneers websites and blogs where you can market your products. Source out a supplier for your clothing and arrange your inventory properly. Make a website and display your entire clothing inventory on it, offer your clothing on internet or print a catalog. Open an account to accept credit cards payments.


Registration of Name and Logo of your clothing Business: Before you begin the process of registering a trademark for your clothing line, you need to make sure of a few things. First, your name and logo should be unique and secondly they are in use at the time you apply for the registration.

Register your business name

Whether you start your business as sole proprietor, corporation or limited liability, you will be needing a business  permit. This is a requirement for boutique owner to start their business. Business name files with the Secretary of State, Division of Corporations or Coutny Clerks Office.

Resale permit:

This is used by the business owners to purchase inventory from wholesalers and sell them to retailers or ultimate consumers. It registers either with the division of taxation and Finance or the Department of Revenue.


Federal Tax ID:
Also known as an Employer Identification Number, a Federal Tax ID is used to identify a business entity.


Sales and Use Taxes:

If you are opening a boutique in the state that collect sales tax, you must have a sales and use tax permit. You will be fined if you fail to collect tax and submit it to the relevant authority.


Non US Resident Opening a US Company

A Non US Resident can open a clothing company in the USA without a social security number.


The Author of this article is a CA (Chartered Accountant Finalist) and APFA (Associate Public Finance Accountant).

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