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How To Start A Sewing Business

How To Start A Sewing Business

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How To Start A Sewing Business

How To Start A Sewing Business

There’s something so satisfying about repairing a damaged garment so that it looks new or creating your very own custom garment from scratch. It’s a skill that few people have today, but it’s a valuable skill to have. Starting a sewing business allows you to turn your creative talent into a rewarding entrepreneurial venture.

If you’re thinking of turning your hobby into a business, you’ll need more than just being handy with a needle and thread. The good news is that you’ve come to the right place. This guide aims to walk you through the process, from understanding the business landscape, steps to getting started, and answering common questions.

Business Overview

Sewing businesses can take on many different forms. Some of these businesses provide services to other businesses in need of products or samples, creating items to spec. Other businesses specialize in selling the garments and goods they design and create. Many home-based sewing businesses are run entirely by the business owner, while other businesses expand to hire multiple employees for larger volume work.

In addition to sewing, businesses may branch out into other areas like pattern design and production, garment tailoring and repair, embroidery, furniture upholstery, sewing machine repair, handmade product retail, and more. Some businesses specialize in hand sewing, while other businesses may be equipped with multiple sewing machines, embroidery machines, and other tools.

Industry Summary

The sewing business is a subset of the broader textile and apparel industry, which is vast and varied. Custom tailoring and alteration services have always been in demand, but the sewing industry is experiencing renewed interest as consumers value homemade, artisanal, and customized items.

A few trends to be aware of before starting a sewing business:

  1. Sustainability: With increased awareness of the environmental impact of fast fashion, sustainable, and ethically-made clothing is becoming more popular.
  2. Personalization: In an era where uniqueness is valued, offering personalized or bespoke services can set you apart.
  3. Online shopping: The internet is a powerful tool for reaching a wider audience. Many sewing businesses are expanding their operations online to capture more market share.
  4. DIY fashion: The “maker movement” inspires people to create DIY projects and turn hobbies into businesses. The rise of platforms like Pinterest and Etsy shows that people are interested in unique, handcrafted items. This creates an opportunity for you to offer not just finished products but also sewing patterns or kits.

Steps To Start A Sewing Business

Step 1: Market Research

In the world of business, passion is essential, but it’s not the only ingredient for success. Even with passion, the most important question you should be asking before starting a business is whether there is enough demand for the products and services that you want to sell. To answer this question, you’ll need to dig into some market research. Conducting market research can help you determine whether there is demand for another sewing business in your area and what services and products you should offer.

Start by evaluating the local market for sewing businesses. Visit existing sewing or alterations shops, fabric stores, and tailors in your area. Look at their websites, services, pricing, and marketing strategies. Check their website traffic and social media following to gauge their popularity. If you are selling online, marketplaces like Etsy can also provide valuable insights by looking at the top-selling sewing products to assess the demand for handmade sewing goods.

This will help you identify gaps in the market or areas that are already saturated. If there are numerous sewing businesses in your location, it doesn’t necessarily mean that the market is oversaturated. You just need to find something unique that sets your business apart from competitors.

Next, research the demographics and consumer profiles in your area. Factors like age, income levels, and fashion interests can affect the type of sewing services that will be popular in your area. For example, a high-income area might have more demand for custom-tailored clothing, while a younger demographic might be interested in unique, handmade fashion items.

All this information will come in handy when it’s time to define your services and products clearly. Knowing your customer is key to any successful venture. So whether you’re targeting busy professionals, brides looking for that perfect fit, or parents interested in unique kids’ clothing, your market research will guide you in setting prices, planning your marketing, and, ultimately, succeeding in your business.

Step 2: Write a Business Plan

The next step is to put together a business plan. Think of a business plan as your roadmap; it outlines where you’re starting, where you want to go, and how you plan to get there.

A few of the key sections in your business plan include:

Market analysis: This section provides research on your target customers, competitors, and the overall industry outlook. For a sewing business, this might include information about the demand for sewing services, popular types of sewing products, and major players in the industry. If you need funding, lenders will want to see your understanding of the market for your business.

Products and services: Here, you’ll describe what you’re actually going to offer. Will you specialize in custom garments, alterations, or perhaps a unique line of hand-sewn accessories?

Financial plan: This might be the most important section of the business plan, not only for lenders but you too. You’ll need to provide estimated start-up costs, revenue projections, and expense forecasts, along with pricing models and funding needs. This section helps estimate whether the business is going to be profitable, and lenders want to see that the numbers add up in a way that makes the loan a low-risk proposition.

Related: How to write a business plan

Step 3: Secure Funding

Starting a sewing business is an exciting journey, but before you can cut that first piece of fabric, you need the funds to get everything off the ground. Raising capital can be a challenging process, but you have several avenues to explore.

Personal savings: The most straightforward way to fund your business is through your own savings. Take a good look at your finances to see what you can realistically set aside for start-up costs. Using your own money eliminates the need to pay interest or deal with investors, but be cautious not to empty your savings entirely in case the business doesn’t initially go as planned.

Loans: Whether it’s a small business loan, a personal loan, or a line of credit, banks and other lenders can offer you the funds you need. However, make sure to shop around and compare interest rates and repayment terms. Loans come with the obligation to pay back both the principal amount and the interest, so make sure you understand the terms before you sign on the dotted line.

Friends and family: While it might feel awkward, close friends or family members may be willing to invest in your business. If you go this route, setting up a formal loan agreement specifying the repayment terms is essential. Clear communication is crucial to maintaining a good relationship while mixing finances and personal connections.

Credit cards: Business credit cards can help cover initial purchases required to start your sewing business. They can offer rewards, cash back, and allow you to build credit. However, credit card debt can be expensive if not managed properly. Be sure to make payments on time to avoid high interest charges.

Microloans: If your funding needs are relatively small and traditional loans aren’t an option, consider a microloan. These are small, short-term loans offered by local economic development organizations, often geared toward new or underserved entrepreneurs. Some of these programs even offer business training alongside the funding, giving you both financial and educational support.

Raising money to start your business is a serious task, but you have options. Each funding route comes with its own pros and cons, so consider your needs carefully.

Related: Finding the money to start a business

Step 4: Register the Business

Starting a sewing business is more than just setting up a sewing machine and getting to work; it also involves legal steps to make sure your business is properly registered and compliant with local, state, and federal laws. While the requirements can vary from one state to another, there are some common steps you’ll likely need to follow.

Business structure: One of the first decisions you’ll need to make is choosing the legal structure for your sewing business. The four main types are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

  • A sole proprietorship is the simplest form of business structure. It’s easy to start and has lower costs. However, the owner is personally liable for all business debts.
  • A general partnership involves two or more people sharing the profits, losses, and management of a business. Like a sole proprietorship, partners are personally liable for business debts.
  • A corporation is a separate legal entity owned by shareholders. This means the corporation itself, not the shareholders, is legally liable for the actions and debts the business incurs.
  • An LLC combines features of corporations and sole proprietorships/partnerships.

For most small sewing businesses, a sole proprietorship or LLC is common due to their simplicity and flexibility. A sole proprietorship is easy to start and involves fewer costs, making it a popular choice for individual entrepreneurs. An LLC offers some liability protection, meaning your personal assets are generally protected if your business incurs debt or is sued.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming a sewing business

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: Depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a local business license, seller’s permit, and Employer Identification Number (EIN).

Related: What licenses do sewing businesses need?

Step 5: Set Up the Workspace

After getting the funding in place and the required business registrations, the next major phase is setting up your operations.

The first thing you’ll need to decide on is where you’ll operate your sewing business. You have a few options here. A home-based operation is a popular choice because it’s cost-effective and convenient. However, you’ll need to ensure you have adequate space and can meet any local zoning requirements. Another option is to lease a commercial space, which can give you more room and a professional setting but comes with higher overhead costs. If your focus is online sales, an e-commerce website will be essential. Platforms like Shopify make it relatively easy to set up an online storefront where you can showcase and sell your creations.

Once you’ve settled on a location, the next step is to identify and purchase the equipment and resources you’ll need. At the core of your sewing business is, of course, a quality sewing machine. In addition, you’ll need essential supplies like thread, needles, and embroidery supplies. Ready-made patterns can be a big time-saver, and computer software for design and accounting could also prove to be invaluable. While it’s tempting to go all out, start with the basics and invest in more specialized equipment as your business grows.

By taking the time to properly set up your sewing business operations, you’re laying a strong foundation for your future success. The location you choose and the resources you invest in will play a significant role in how your business functions day-to-day. It’s worth spending time to get it right, as a good operational plan will allow you to focus on what you do best: sewing and creating products that your customers will love.

Step 6: Create a Marketing Plan

Starting a new sewing business is exciting, but even if you provide the best sewing services in town, without a solid marketing strategy in place, they may never find you.

First and foremost, you need to define your target audience. Understanding the demographics, interests, and needs of your ideal customers not only helps you tailor your products but also focuses your promotional efforts. Once you know who you’re trying to reach, you can work on building your brand. Your business name, logo, slogan, and color scheme are all elements that make up your brand identity. Consistency across all platforms, from social media to your website, will make your brand more memorable and trustworthy.

A portfolio showcasing your best work can act as a silent salesperson. Whether custom garments, alterations, or unique embroidery work, a portfolio gives potential customers a tangible sense of your skills and style. Collaboration can also be a potent tool in your marketing arsenal. For instance, partnering with local fabric stores can not only expand your reach but also add a layer of credibility to your business. Such partnerships could include special promotions or discounts to customers who buy fabric from these stores, creating a win-win situation.

Don’t underestimate the importance of planning. Developing a schedule and budget for your marketing activities keeps you on track and ensures you’re allocating adequate resources for promoting your business. It might seem like a lot to manage, but each aspect plays a crucial role in attracting and retaining customers. With the right approach, your sewing business will not just survive but thrive.

Related: Low-cost ideas to market a new business

Step 7: Prepare to Open!

As you approach the launch of your sewing business, there are several additional steps that you should consider so you’re fully prepared for the journey ahead. Each business will have unique needs, but these are some of the most common loose ends you’ll want to tie up:

Business insurance: Insurance isn’t just a good idea; it’s often essential for protecting your investment and livelihood. Different types of insurance you might need include liability, property, and even business interruption insurance. These can shield you from various risks like theft, accidents, or other unforeseen incidents.

Setting up bookkeeping: Good financial management starts with reliable bookkeeping. You can do this manually, but using accounting software like Wave Accounting (FREE) or Quickbooks can make the process much easier and more accurate. Regularly tracking income, expenses, and taxes will help you keep a clear financial picture of your business.

Opening a business bank account: Separate your personal finances from your business by opening a dedicated bank account. This makes it easier to manage funds, pay bills, and track transactions related to your business.

Accepting credit cards: If you plan to sell products directly to customers, you’ll want to have a credit card processing system in place. Point-of-sale systems like Square or Stripe allow you to easily accept and process payments.

Joining industry associations: Networks can be invaluable for business growth. Consider joining industry-specific associations like the American Sewing Guild or the National NeedleArts Association. These organizations offer opportunities for networking, professional development, and staying updated on industry trends.

Preparing for the grand opening: As your launch date approaches, plan an event or promotion to attract initial customers. This could be a special discount, a small party, or even a sewing class to engage with your community.

Greg’s Tip: Before starting your sewing business, get advice from those who already own established sewing businesses (preferrably not from your local competitors).

Greg's Business Tip

Common Questions When Starting A Sewing Business

How much does it cost to start a sewing business?

One of the great benefits of starting a sewing business is that there are minimal startup costs involved. It’s possible to start this business right out of your home, saving you on rental costs. Plan to spend between $2,000 and $5,000 to get the business up and running; you can then expand the business later on.

Common startup costs include:

Sewing equipment: Expect to spend $800 to $1,500 on a high-quality sewing machine, serger, iron, scissors, sewing notions, storage, and organization.

Workspace: If working from home, $500 to $1,000 for furniture like cutting tables, chairs, lighting, and storage solutions. Renting retail space will likely cost an additional $2,000 to $4,000 for the first month’s rent and security deposit.

Business licensing: $50 to $100 for permits, sales tax ID, and licenses required in your state and city.

Insurance: $300 to $500 for general liability insurance to cover property damage or bodily injuries at your workspace.

Marketing: $500 to $1,000 for branding, brochures, business cards, website, social media setup, and initial online advertising campaigns.

Initial inventory: $500 to $1,000 for fabric, supplies like thread, and notions to fill first orders.

How profitable is a sewing business?

When starting a sewing business, it’s important to research industry statistics to develop a realistic estimate of potential revenue and expenses. According to reports, the average revenue for a sewing business falls between $30,000 to $60,000 annually.

Assuming you price your services competitively at $20 per hour and work 30 billable hours per week, you could generate around $31,200 in annual revenue (30 hours x $20 per hour x 48 working weeks).

Material costs may range from 20-30% of total revenue, approximately $6,240 to $9,360 for purchasing fabric and notions. Then, there would be overhead expenses like marketing, website, and office expenses that we will estimate at $5,000.

With $31,200 in potential revenue, subtracting estimated material costs of $7,800 (25%) and overhead expenses of $5,000, the approximate annual pre-tax profit would be $18,400 for a new sewing business following industry averages.

Of course, this is a simplified example, and actual profits can vary significantly based on the scale, location, and efficiency of your business operations. Seasonal demands, special orders, and other variables could also affect profitability. But the math gives you a baseline idea of what you might expect.

What skills are helpful in running a sewing business?

Starting a sewing business doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this business.

Sewing experience: Plenty of sewing experience is a must when starting this type of business. A business owner needs to be knowledgeable in sewing concepts, machines, fabric properties, and more.

Attention to detail: Detail is so important in sewing, and a business owner with an eye for detail will be able to produce quality goods and use quality control to ensure that all of their products represent the business well.

Troubleshooting skills: Problems and challenges will arise in the sewing industry, whether working with uncooperative fabric or identifying an issue with a pattern. Any business owner will benefit from troubleshooting skills.

Creativity: A creative nature can be beneficial in this business, from developing new products to choosing great looking color schemes.

Awareness of fashion trends: A business owner needs to be aware of the changing fashion trends to select appropriate fabrics and products to create.

Customer service skills: Experience in working with customers, addressing concerns, and fixing problems can help a business owner earn a strong reputation.

Equipment repair skills: An understanding of mechanics and the ability to perform basic sewing machine repairs will be an advantage and can save the business owner some repair bills.

What is the NAICS code for a sewing business?

The NAICS code for a sewing business is 315210.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

Resources:
American Sewing Guild
Association of Sewing & Design Professionals
Custom Tailors and Designers Association

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

    View all posts

How To Start A Sewing Business

How To Start A Sewing Business

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