How to Start a Fashion Business: From Idea to Launch Guide

Have you always dreamed of seeing people wear your designs and turning your passion for fashion into a thriving business?

Every day, new designers launch brands online, grow communities on social media, and transform their ideas into full-time careers. So why don't you give it a try?

In this article, you’ll learn how to start a fashion business and give your brand the best chance to shine.

1. UK fashion business market demand and trends

Fashion is deeply woven into UK culture, and consumer spending makes that clear. In 2024, Britons spent nearly £67 billion on apparel, reflecting not just a demand for clothing but also the cultural importance of style, self-expression, and identity. Even in the face of economic fluctuations, the market has demonstrated remarkable resilience, with clothing sales continuing to grow steadily year after year.

Within this vast market, different segments show unique strengths and opportunities:

• Women’s apparel dominates the market at around £47 billion, but there is also strong growth potential in menswear, children's wear, and sportswear.
• Sustainability is increasingly influencing buying decisions, with an increasing number of consumers seeking eco-friendly and ethically produced fashion.
• E-commerce continues to surge, with 31% of fashion spending now occurring online and 85% of Britons shopping digitally.
• Social media drives both discovery and demand, with platforms like Instagram and Pinterest heavily influencing trends and purchases.

The typical annual earnings for opening a fashion business in the UK vary widely depending on the type of business model and location.

⚡ Target customers and niches

You can’t (and shouldn’t) try to appeal to everyone. A broad “something for everyone” approach often results in a brand that no one truly loves. Instead, define your segment and tailor your products to meet a specific need or desire.

Here are some examples of niche opportunities:

• Plus-size or petite fashion – Solve fit issues for body types that mainstream retailers often overlook.
• Sustainable or vegan clothing – Offer organic, recycled, or cruelty-free materials to attract eco-conscious shoppers.
• Cultural or alternative styles – Serve subcultures such as goth, modest fashion, or urban streetwear that larger brands don’t fully cater to.
• Children’s or maternity wear – Provide stylish and practical options in categories where parents often make repeat purchases and remain loyal to trusted brands.

2. What are the legal requirements & company setup options for a fashion business?

Sorting out the legal and administrative side of a business may not feel as exciting as creating designs, but it’s an important part of getting started. The process in the UK is generally simple, and there are a few main options to choose from when setting up your business:

• Sole Trader – Register with HMRC as self-employed once you earn more than £1,000 a year. It’s the simplest route with minimal administration. You retain all profits after tax, but you’re also personally responsible if the business incurs debt or legal issues.
• Limited Company (Ltd) – Set up through Companies House, usually online in less than a day for a small fee. This creates a separate legal entity, which protects your personal assets and can give your brand more credibility with suppliers or stockists. It’s also easier to bring in partners or investors. On the flip side, there are stricter filing and tax obligations.
• Partnership – If starting with a co-founder, you can register as a partnership, where responsibilities, profits, and risks are shared. For extra protection, some opt for a Limited Liability Partnership (LLP), although this is less common among small fashion startups. In either case, having a written agreement between partners is strongly advised.

💡 Pro tip

Services like ANNA Money can register your Limited Company for free, set up a business account, and even help you manage filings like Confirmation Statements. The process takes minutes online, and you’ll usually receive your Certificate of Incorporation within hours.

⚡ Compliance essentials

Fashion retail in the UK is generally deregulated. However, certain rules still apply depending on how you operate. Key areas include:

• Shops and premises – No retail licence is required. You must have the correct planning use class for your shop, pay business rates unless exempt, and comply with health and safety regulations (including fire exits, risk assessments, and a first aid kit). If you play music in-store, you need a Music Licence from PPL/PRS.
• Second-hand clothing – Selling vintage or used items may require a second-hand dealer licence or registration. This is compulsory in Scotland. In England and Wales, the rules vary by council, so please check with your local authority for specific details.
• Street and market trading – You may need a street trading licence if selling from stalls, pop-ups, or public spaces. Each council has its own rules. Event organisers often manage this, but always confirm before trading.
• Product compliance – Clothing must meet UK textile labelling laws, such as fibre content and care instructions. Some items, such as children’s nightwear, must meet specific safety standards, including flammability requirements. Descriptions and pricing must always be accurate and clear.
• Online sales – When selling online, you must follow the Consumer Contracts Regulations. These include providing customers with pre-purchase information and offering a 14-day cancellation and returns period.
• Employment – If you hire staff, you must comply with employment law. This includes health and safety duties, setting up PAYE payroll, and providing workplace pensions.

⚡ Insurance essentials

Not all cover is legally required, but insurance is highly recommended to protect your business:

• Employers’ Liability Insurance (ELI) – Legally required if you employ anyone, even on a part-time basis.
• Public Liability Insurance (PLI) – Protects you if a customer is injured in your shop or harmed by your product. Strongly advised and often expected.
• Product Liability Insurance – Often included with public liability cover. Protects you if a defective product causes harm.
• Stock and equipment insurance – Optional but useful to cover theft, fire, or accidental damage.

3. How much does it cost to start a fashion brand?

Launching a fashion brand can cost anywhere from a few hundred pounds (for a simple T-shirt line) to tens of thousands (for a full cut-and-sew collection or boutique). Let’s break down typical costs, ongoing expenses, and financial planning tips:

⚡ Product development

Bringing your first designs to life:

• Fabrics & trims for samples: £100 – £1,000+
• Pattern cutting / sample making: £50 – £300 per piece (often 2× production cost)
• Sewing equipment if DIY: £200 – £1,000
• Print test runs (for T-shirts/hoodies): £50 – £200
• Tech packs (if using a manufacturer): £100 – £250 per style

⚡ Initial production & stock

Turning prototypes into sellable products:

• Small T-shirt/hoodie run (100 pieces): from ~£2,000
• Cut-and-sew mini collection (5–10 styles): £5,000 – £15,000+
• Boutique stock buy-in (wholesale clothing): depends on range, usually 50% of retail price
• Packaging (tags, labels, boxes, mailers): £200 – £500
• Import duties & shipping (if overseas): variable

📌 Note

Print-on-demand and dropshipping help you avoid big upfront costs and unsold stock, since items are only made when ordered. The downside is lower profit margins and less control over quality, shipping, and packaging.

⚡ Branding & online presence

Look professional and get visible:

• Logo & brand kit: £0 (DIY) – £300+
• E-commerce platform (Shopify, Wix, Squarespace): £20 – £30/month
• Website template or design: £200 – £500
• Domain name: ~£10/year
• Professional website build: £500 – £2,000+

⚡ Operations & admin

Stay legal and organised:

• Business registration: £12 (Ltd Co) or free (sole trader)
• Trademark registration: ~£170+
• Accounting software: £10 – £30/month
• Accountant (annual filing): £300 – £600
• Insurance: £100 – £300/year
• Payment processing fees: 1.5% – 3% per sale
• Shop/studio overheads (if not home-based): rent + deposit + utilities

⚡ Ongoing monthly costs

Once you’re up and running:

• Inventory replenishment: varies with sales cycle
• Marketing & ads: £50 – £200+ (scales with growth)
• Website/e-commerce fees: £20 – £50+
• SaaS/software tools (design, email, CRM): £10 – £100+
• Phone & internet: £20 – £50+
• Staff or freelance support: £10 – £15/hour+
• Packaging, postage & returns: ~£3/order average (plus return costs)

4. How to get clients for your fashion business?

Here’s a breakdown of strategies and tactics to help launch and grow your fashion brand effectively:

5. Operations & capabilities of a fashion business

Running a fashion business means juggling creativity with practical day-to-day operations. It’s design, production, sales, marketing, logistics, and customer service all at once.

⚡ Necessary skills

To operate effectively, you’ll need both creative and business skills:

Creative skills:

• Fashion design and garment construction (sewing, pattern cutting, tailoring).
• Graphic design for prints, branding, or lookbooks.
• Styling and creative direction.
• Knowledge of fabrics, sizing, and production techniques.

Business skills:

• Marketing and sales (pricing, branding, customer engagement).
• Finance basics (budgeting, invoicing, bookkeeping, taxes).
• Inventory and supply chain management.
• Customer service and communication (handling orders, returns, and inquiries).
• Time management and organisation to balance design, admin, and fulfilment.

⚡ Time commitment & balance

Here’s what the workload typically looks like:

• Production-heavy brands – Expect long days in the studio handling sewing, printing, or fittings.
• Outsourced production – Time shifts toward supplier communication, quality control, and logistics.
• Day-to-day – Mix of creative work (designing, prototyping), admin (bookkeeping, emails), and sales (packing orders, updating websites).
• Deadlines are often tied to collection launches, pop-ups, or seasonal cycles, so workload peaks around those dates.

⚡ Daily tasks

A typical day running a fashion business may include:

• Designing new pieces or preparing prototypes.
• Managing production (in-house sewing/printing or liaising with factories).
• Photographing products and updating online listings.
• Packing and shipping customer orders.
• Handling customer emails, returns, and questions.
• Updating inventory records.
• Posting to social media and sending marketing emails.
• Tracking finances (recording sales, monitoring expenses, raising invoices).

6. Tools, systems & automations

The right tools keep your fashion business organised, save time, and help you look professional. Here are the essentials:

• Design & production – A solid sewing machine, overlocker, and pressing tools are the basics if you’re making garments yourself. For digital design, Adobe Illustrator or Photoshop handle sketches and lookbooks, while tools like Clo3D or Browzwear enable the creation of 3D prototypes. Even simple design software or Canva can get you started with branding and graphics.
• Sales & e-commerce – Your website is your shop window. Platforms like Shopify, Wix, or WooCommerce let you list products, track stock, and process payments.
• Inventory management – Start simple with a spreadsheet, then upgrade to integrated tracking through your e-commerce platform. This helps prevent overselling and keeps you on top of sizes, colours, and SKUs as your product range grows.
• Money management – ANNA Money, QuickBooks, or Xero handle invoicing, expenses, and tax filings. For example, ANNA’s business account is designed for small business owners, with tools like receipt capture, expense categorisation, tax pots, and instant invoicing. You can also send polished invoices in seconds and get paid via a Payment Link or QR code. Additionally, ANNA will even send gentle reminders if clients forget.
• Customer management – Keep a customer database to build loyalty. Email marketing tools like Mailchimp, Klaviyo, or MailerLite let you send newsletters, special offers, and product launches automatically. If you take appointments (e.g., tailoring or styling), tools like Calendly streamline scheduling.
• Marketing & social media – Consistency is key. Use Buffer, Later, or Hootsuite to schedule Instagram, TikTok, or Pinterest posts in advance. Pair this with Canva for quick, polished visuals, and link it to your email campaigns for a joined-up marketing flow.
• Project & task management – Juggling design, admin, and orders is easier with task boards. Trello, Asana, or Notion keep to-do lists, launch deadlines, and collection planning in one place. Automate reminders to stay on top of production and sales cycles.

How to start a fashion business: quick checklist

Before you go live with your business, run through this checklist to make sure each step is covered:

Start and grow your fashion business with ANNA

Now that you’ve explored how to start a fashion business, the next step is to ensure it is set up correctly. Legal structures, tax filings, and compliance aren’t the glamorous side of fashion, but they’re the foundations that keep your brand running smoothly while you focus on design, creativity, and customers.

That’s where ANNA comes in. Built for entrepreneurs, freelancers, and small businesses, ANNA makes setting up and managing your fashion business simple, so you can spend less time on admin and more time creating collections that people love.

Here’s how ANNA helps fashion founders:

✨ Launch your Limited Company for free. ANNA handles the Companies House paperwork so you’re officially set up and ready to trade without stress.

✨ ANNA’s smart tools remind you about tax deadlines, VAT, and confirmation statements, so you stay compliant without the hassle. Less time worrying about paperwork means more time for your clients.

✨ Thinking of calling your label Velour & Vine or Urban Loom? Use ANNA’s free Company Name Checker to instantly see if it’s available. If it’s taken, ANNA suggests smart alternatives so your brand doesn’t lose momentum before launch.

✨ Register your business in minutes, all online. You can even add a virtual office address for a professional image while keeping your personal details private.

✨ From instant invoicing and receipt capture to tax pots and payment links, ANNA’s business account helps you stay financially organised from day one.

Join over 100,000 UK businesses that already use ANNA to simplify admin, stay compliant, and free up time to grow. Register your fashion business with ANNA today and take the first step toward building a lasting label!