How to Start a Clothing Business [4 Step-by-step Tips]

The UK fashion industry is changing in real time. Interest in sustainable fashion is growing quickly. Streetwear is still dominating youth culture. More shoppers are turning to secondhand options. At the same time, new technology is helping smaller brands compete with big players by improving design, logistics, and marketing.

This guide breaks down the process of starting a clothing business in a step-by-step manner. You will learn how to study current trends, choose a business structure, find ethical suppliers, design clothing that reflects your vision, build a brand with a clear message, and launch online with the right tools. By the end, you will have a comprehensive plan for creating a clothing business that aligns with the market and resonates with today’s customers.

Overview of the fashion market in the UK in 2025

Before you design anything or search for fabric suppliers, you need to understand the space you are entering. Clothing businesses that succeed in 2025 are the ones that pay attention to what people actually want, not what used to work five years ago.

Sustainability is now a basic expectation

Sustainable fashion is growing at a much faster rate than traditional retail. 

In 2024, the UK market for sustainable clothing was valued at around $261 million. 

That number is expected to reach over $1.7 billion by 2033. Consumers, especially younger ones, are actively looking for brands that are honest about their materials and working conditions.

Shoppers are reading fabric labels. They are checking where products are made. They want to see proof that your business respects both people and the environment. This shift is not limited to niche markets. It is becoming part of the mainstream.

If your brand has a clear sustainability plan, you are more likely to earn attention and loyalty. This could mean using organic or recycled fabrics, avoiding overproduction, or offering clothing take-back schemes.

Women’s clothing remains a strong opportunity

Women’s apparel is still the largest segment in the UK clothing market. Spending growth has slowed due to inflation, but long-term demand remains steady.

• Women aged 35 and above continue to invest in clothing that is versatile, well-made, and comfortable.
• Younger women are also shopping, but their habits are changing. Many are now purchasing from second-hand platforms (eBay, Vinted, Etsy, and Depo) or opting for brands that prioritise circular fashion. 

This creates two very different types of opportunities. You can build a brand that serves working women looking for reliable wardrobe pieces, or you can target Gen Z with limited edition drops and upcycled materials.

Both strategies can succeed, as long as you focus on what your audience values most.

Streetwear continues to lead among young shoppers

Streetwear has evolved into one of the most influential styles among young consumers under 25. Nearly three out of four streetwear buyers are in this age group. Most are buying at least one new item each month. Sneakers, hoodies, oversized jackets, and graphic t-shirts remain top sellers.

Style alone is not enough. Almost half (46%) of Brits say it’s important for brands to have missions/values that align with their own, and 36% primarily buy from brands whose values align with theirs.

They care about fairness in production, inclusion, sustainability, and transparency. If your brand has a message and a personality that feels real, you will find an audience.

What does this mean for you?

Successful brands connect with people through purpose, not just product. The more specific you are about who you serve and why, the easier it will be to make decisions that help your business grow.

✅ If you want to build for women in their thirties who prefer quality over quantity, focus on fit, fabric, and simplicity.

✅ If you want to connect with 20-year-olds who live in oversized sweatshirts and limited sneaker drops, focus on story, ethics, and identity.

Look at reports from Mintel, IMARC, or Statista to understand which categories are growing and where demand is shifting. Market research can save you from making assumptions that don’t hold up once you launch.

Now, let’s go over 4 steps on how to start a clothing business in 2025!

1. Register your clothing business and get the legal setup right

Once you have a clear concept and know who you are designing for, the next step is to make your business official. This is where you create the foundation that supports everything else — your products, your branding, your website, and your income.

Choose a legal structure that matches your plans

Most small businesses in the UK start as either a sole trader or a limited company. Each option has its own advantages, depending on how you want to operate.

🔸Becoming a sole trader is the simplest route:

• You can start trading almost immediately. 
• You keep all your profits, and the paperwork is minimal. 
• The risk is that you are personally responsible for any debts or problems that arise.
• There is no legal separation between you and your business.

🔸 Setting up as a limited company takes more effort, but it gives you more protection:

• A limited company is treated as a separate legal entity. This means your personal assets are safer if the business faces legal or financial trouble. 
• It also looks more credible if you plan to grow quickly, work with investors, or hire employees.

Both structures are valid for fashion startups. 

✅ If you are starting small and want full control, a sole trader setup may be the right choice. 

✅ If you have long-term plans to expand or raise funds, registering a limited company gives you more flexibility later.

You can always switch from sole trader to limited company in the future if your business outgrows the original structure.

Register your business officially

✅ If you choose to operate as a sole trader, you need to register for Self Assessment with HMRC once you earn more than £1,000 in a tax year. The process is free and can be done online through the GOV.UK website.

✅ If you register a limited company, you must set it up with Companies House before you begin trading. You will need a unique business name, an official address, and details about your company director and shareholders. You must also submit annual accounts and confirmation statements.

Set up your finances early

Even before your first sale, it helps to open a business bank account. Keeping your business and personal finances separate will make it easier to track costs, plan for taxes, and apply for funding if needed.

If you expect your yearly revenue to go over the VAT threshold (around £90,000 in 2024), register for VAT as early as possible. Even if you do not reach that level in your first year, it is good to know what is required in advance.

💡 Pro tip: Register your company with ANNA the smart way

Want to start a business without the usual red tape? ANNA lets you register a UK Limited Company for free and open a business account at the same time — no fuss, no extra Companies House fees.

Here’s how to get the most out of it:

• Pick the Essential Plan (£119/year) to get filings and HMRC tax submissions handled for you — perfect for peace of mind.
• Need privacy? Add a Virtual Office Address for a London presence and spam-free inbox.
• Doing payroll or VAT? Just tick PAYE or VAT Registration add-ons during sign-up and ANNA will take care of the HMRC forms.

📍 Tip: If you're unsure about long-term plans, opt for Company Cancellation Cover — so you can close your company within a year if you change your mind.

Protect your name, logo, and identity

Once you have a business name you like, check that it is not already in use or trademarked. Use the Intellectual Property Office (IPO) website or ANNA’s company name checker below to search for existing trademarks. If the name is available, consider registering it to protect your brand.

You can also trademark your logo, tagline, or product names if they are unique to your brand. This helps you avoid problems in the future, especially if your business grows quickly.

2. Find the right suppliers and build a strong supply chain

After setting up your business legally, your next priority is sourcing. The materials and manufacturers you choose will shape the quality, cost, and identity of your clothing business.

Decide between local and overseas production

Most new brands begin by choosing between UK or European suppliers and overseas manufacturers. Both options have pros and limitations.

• Working with local factories in the UK or nearby countries often gives you faster turnaround times, better quality control, and fewer shipping issues. It can also help you reduce your carbon footprint and respond more quickly to trends.
• Overseas production, in places like Turkey, Bangladesh, or China, can be more cost-effective for larger batches. However, it requires more planning, more lead time, and more effort to monitor ethical standards.

✅ If you are launching with limited stock or testing a new idea, local production might help you stay flexible.

✅ If you already have strong demand or are working on a detailed plan for mass production, it may be worth exploring trusted overseas factories.

Prioritise ethical and sustainable materials

The materials you choose send a clear message about your brand values. Look for fabrics that meet credible certification standards, such as:

• GOTS (Global Organic Textile Standard) for organic cotton
• OEKO-TEX for chemical-free textiles

You can also explore innovative fabrics like recycled polyester, organic hemp, Tencel, or Piñatex (a plant-based leather alternative made from pineapple leaves). These materials are becoming more accessible and can set your collection apart.

Start small with sampling and low-volume runs:

• If this is your first collection, avoid overordering. Instead, request samples from your suppliers to test the fabric, fit, stitching, and durability. This gives you time to make changes before committing to a full run.
• Many UK-based manufacturers and print-on-demand providers now offer low minimum order quantities. This is ideal for early-stage brands that want to experiment or drop limited collections.
• Use small batch production to refine your process and reduce the risk of waste. Once you find what works, you can scale with more confidence.

📍 Note: Shoppers want to know how their clothes are made, and brands that provide clear answers gain more trust. You can share photos or videos from your production partners, introduce your fabric sources on your website, or include tags that explain the story behind each piece. Even a short message that says “Made in Manchester using recycled cotton from Spain” shows that you are not hiding anything.

3. Design your clothing line with style and smart tools

Once your supply chain is in motion, it is time to focus on the creative side.

Use data and trend tools to shape your ideas

Fashion moves quickly. Instead of relying on instincts alone, use trend forecasting tools that are powered by real data. 

Platforms like Heuritech or EDITED track social media, search behaviour, and retail sales to spot patterns. These tools highlight what customers are actually interested in, not just what designers think will sell.

If you plan to launch a spring collection, you can see which colours, silhouettes, or prints are already gaining traction. This helps you avoid spending time and money on styles that may already be fading out.

Let AI assist your creative process

Designers now have access to AI-based tools that support creativity rather than replace it. You can use platforms that generate print patterns, suggest fabric combinations, or recommend colour palettes based on current customer preferences.

Some platforms offer smart design assistants that create digital sketches, help with grading and sizing, or even assemble technical packs. These tools make the process faster and reduce human error, especially when preparing designs for manufacturing.

Use 3D design to cut waste and speed up sampling

Instead of creating physical samples for every new piece, you can now build digital garment models. Tools like Clo3D and Browzwear allow you to create realistic clothing in a virtual space. These programs let you test fit, movement, and colour before sending anything to production.

You can also use these virtual samples to show potential buyers or collaborators your ideas. This cuts down on shipping, sampling costs, and delays.

In addition, these platforms are useful when working with factories. A 3D prototype often communicates your design better than a sketch or email.

4. Set up your online store and sales channels

Customers expect to shop from their phones, discover products on social media, and receive smooth service from checkout to delivery. Setting up your online store properly is one of the most important steps in launching your clothing business.

Choose a platform that works for your brand

Most new clothing businesses in the UK start with one of three platforms: Shopify, WooCommerce, or BigCommerce. Each one gives you the tools to manage products, take payments, and handle taxes.

• Shopify is a favourite for fashion brands because it works well with UK payment systems, supports HMRC-compliant invoices, and offers themes built for product-focused stores.
• If you already use WordPress, WooCommerce may be a better fit. It gives you more control over design and content. 
• BigCommerce is another solid option if you need advanced features from the start.

Consider online marketplaces for added reach

While your own website should be your main sales channel, online marketplaces can help you reach new customers quickly. You can list your products on platforms like:

• ASOS Marketplace for independent and streetwear brands
• Etsy for handmade or limited-edition items
• Amazon or eBay for broader exposure and faster customer acquisition

Marketplaces come with listing fees or commissions, but they also bring large built-in audiences. Use them strategically to support your main store, not to replace it.

💡 Pro tip: Launch your ecommerce business with ANNA in minutes

Register your company for free and get a business account that connects directly to Shopify, WooCommerce, Etsy, eBay, and Amazon. 

ANNA automatically imports your sales data, calculates your taxes, and ensures compliance with HMRC from day one.

Final thoughts

Starting a clothing business in the UK in 2025 means more than following trends. From registering your business and sourcing ethical materials to building a strong online store and designing with intent, every step matters. 

The UK fashion space is competitive, but there is plenty of room for new brands that care about the details and focus on building something real.

Stay focused, keep learning, and surround yourself with tools that make running your business easier. A strong foundation now will save you time, money, and stress later.

Get set up with ANNA Money

If you want a fast, stress-free way to register your clothing business and handle your finances, ANNA Money is a great place to start. You can:

• Register your limited company in minutes
• Open a business account with a UK sort code and account number
• Send invoices, track expenses, and manage tax all in one app
• Get real-time support from a UK-based team, 24/7

ANNA is designed for small business owners who want to spend more time growing their brand and less time stressing about admin. It's ideal for fashion startups who need simple tools with no unnecessary extras.

👉 Start your clothing business with ANNA Money and get everything sorted in one place.