How to Start a Hoodie Business in 2025 [Full Guide]

5 November, 2025 · 9 min read

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Explore how to start a hoodie business with guidance on branding, costs, legal setup, and marketing to build a strong clothing brand from day one.

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If you’ve ever dreamed of starting your own clothing line, 2025 might just be the perfect year to make it happen. Streetwear continues to dominate UK fashion, and hoodies remain one of the most popular staples - versatile, comfortable, and easy to brand. From university students to working professionals, almost everyone owns at least one hoodie, making it a fantastic entry point for entrepreneurs looking to start a clothing business.

If you want to turn your hoodie hobby into the real deal, but don’t actually know how to start a hoodie business, don’t worry. In this article, we’ll walk through everything - from market demands to company setup.

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Understanding the market

Hoodies are no longer just casual loungewear. They’re a key piece in fashion, sports, and streetwear. According to Statista, the UK apparel market is valued at over £60 billion annually, with casualwear and athleisure leading the charge. TikTok trends, sustainable fashion, and limited-edition drops have all fuelled hoodie demand.

Choosing your audience

Because hoodies have become so versatile, there are numerous routes you can take with your idea. Your hoodie business can tap into a range of audiences, depending on your vision.

Students and Gen Z - looking for affordable, trend-driven designs.
Streetwear enthusiasts - drawn to bold graphics, limited runs, and exclusivity.
Corporate clients - companies ordering custom-branded hoodies for staff and events.
Online communities and influencer fans - creators monetising their following with merch.

In general, shoppers want stylish, comfortable, and affordable fashion, while businesses need practical, branded clothing. There’s one thing, however, that all consumers increasingly ask for, and that is sustainability; ethically made options are in high demand.

Athleisure

Clothing once meant just for the gym is now everyday fashion. The market is expected to nearly double by 2030, showing just how much people love comfort that still looks stylish. Surveys show Brits are wearing leggings, trainers, and hoodies far beyond workouts - at work, at home, and even on nights out. Comfort and versatility are winning, and big brands like Lululemon and Nike are thriving.

lululemon-example

Sustainability

Shoppers, especially Gen Z and Millennials, care about where their clothes come from. The UK sustainable fashion market is growing at a rate of over 20% per year. That means eco-friendly hoodies-made from organic cotton, recycled fabrics, or produced ethically-are becoming increasingly popular.

Less choice is more

Too much choice online makes shoppers freeze. That’s why more brands are focusing on curated drops - smaller collections, limited runs, or seasonal hoodies. This makes shopping easier, and the product feels more exclusive.

How to start a hoodie business: Legal requirements

1. Choose your business structure

When starting a business in the UK, the first step is choosing the right legal structure. This will affect your taxes, liability, and how professional your brand appears to customers. There are three most common structures to consider:

Sole Trader - The simplest setup, perfect for a small side hustle or testing your idea. You’ll pay income tax on your profits, and you have full control over all decisions. The downside is that there’s no separation between personal and business finances, so you’re personally liable for any debts.
Partnership - If you’re starting with a friend or co-founder, a partnership can be a good option. You share profits, responsibilities, and liabilities, so it’s important to have clear agreements in place from the start.
Limited Company (LTD) - Provides liability protection, meaning your personal assets are separate from the business. It also gives your brand a more professional image, which can help when dealing with suppliers, investors, or larger clients. This option is ideal if you plan to grow and scale your hoodie business.

💡Tip: Setting up your company is quick and straightforward with ANNA Money. In just a few minutes, you can register your business and gain access to a suite of tools, including business banking, invoicing, and financial management, all designed to help you focus on growing your brand.

2. Other legal considerations

Even after registering your business, there are a few important things to keep in mind:

Trademark - Protect your brand name, logo, and any unique designs. Registering a trademark ensures no one else can copy your brand identity.
Insurance - Running a clothing business comes with risks. Consider public liability insurance (for accidents involving customers), product liability insurance (for faulty products), and stock insurance (to protect your inventory).
Regulations - Clothing businesses in the UK must follow labelling laws, covering fibre content, care instructions, and country of origin. Compliance not only keeps you legal but also builds trust with your customers.

Here are the legal considerations at a glance:

Business Structure	Sole Trader, Partnership, Limited Company (LTD)	Choose based on scale, control, and liability.
Trademarking	Protect your brand name, logo, or unique designs	Prevents copycats and strengthens your brand identity.
Insurance	Public liability, product liability, stock insurance	Covers risks like customer accidents, faulty products, or lost/damaged stock.
Regulations / Labeling	Fabric content, washing instructions, country of origin	Compliance avoids fines, builds customer trust, and improves shopping experience.
Ease of Setup	Tools like ANNA Money allow fast registration, banking, invoicing	Saves time and keeps finances organised.
Growth Consideration	LTD structure, curated drops, sustainable options	Prepares your brand for scaling, attracting investors, and meeting market demand for eco-friendly and exclusive products.

How to start a hoodie business: Costs and finances

Starting a hoodie business doesn’t have to break the bank, but knowing the numbers upfront will help you plan smarter. Costs can vary a lot depending on whether you go small, DIY, or scale up fast.

Here are the expected startup costs based on your business type:

Print-on-demand: £0 - £300 to get started. You only pay when a customer places an order, making this one of the best ways of starting a business with no money.
Wholesale blanks: £500-£2,000 to buy stock upfront. Ideal if you want more control over designs and faster shipping.
Printing equipment (DIY): £1,000-£5,000+. A bigger upfront investment, but it can save money per hoodie in the long run.
Branding & website: £200-£1,000. Your logo, website, and shop design make your brand memorable - don’t skimp here.

Ongoing costs

Marketing: £100–£500/month for ads, social media campaigns, and influencer partnerships.
Platform fees: £20–£100/month for Shopify, Etsy, TikTok Shop, or other sales platforms.
Packaging, shipping, and storage: Varies depending on how many orders you handle.

Pricing

Standard hoodies: £25–£60 retail.
Luxury or limited-edition hoodies: £70–£150+.
Profit margins: Usually 30–60%, depending on whether you use print-on-demand, wholesale, or DIY printing.

Your funding and support options

Government startup loans: Up to £25,000 may be available for new businesses.
Small business grants: Check with your local council for opportunities.
Crowdfunding: Platforms like Kickstarter are popular for streetwear and limited-edition drops.

🧮Total: For most beginners aiming to test the market, £500-£1,000 is realistic to start an ecommerce business or small wholesale stock. If you want to run a proper small-scale brand with inventory and DIY printing, £2,000-£5,000 is a safer starting range.

Startup Costs
Print-on-demand	£0 – £300	Pay only when a customer orders. Low-risk, good for beginners.
Wholesale blanks	£500 – £2,000	Buy stock upfront. More control, faster shipping.
Printing equipment	£1,000 – £5,000+	Higher investment, but cheaper per hoodie long-term.
Branding & website	£200 – £1,000	Covers logo, website, and shop design. Important for brand identity.
Ongoing Costs
Marketing	£100 – £500/month	Ads, social media campaigns, influencer collaborations.
Platform fees	£20 – £100/month	Shopify, Etsy, TikTok Shop, or other online sales platforms.
Packaging & shipping	Varies	Depends on order volume and storage needs.
Pricing & Margins
Standard hoodie retail	£25 – £60	Everyday designs.
Premium hoodie retail	£70 – £150+	Limited-edition or luxury styles.
Profit margins	30% – 60%	Varies by production method (POD, wholesale, or DIY).
Typical Total	£500 – £1,000+	Test market with ecommerce or small wholesale stock.
	£2,000 – £5,000+	Safer starting point for DIY printing and inventory.

How to make your first hoodie sales

Getting your first customers is all about visibility, credibility, and creating a buzz. Here’s how to attract buyers and start building your brand.

How to attract your first clients

The first step is simply getting your name out there. Here are some practical ways to land those super important first buyers:

Start with friends and family: Sell locally and collect testimonials - they’ll help build social proof.
Know where your audience buys: Choose a platform which your buyers use - Shopify is perfect for building your brand, Etsy is great for handmade or custom hoodies, while TikTok Shop is the fastest-growing platform in 2025, ideal for viral drops.
Limited drops: Release small, exclusive batches to create hype and urgency.
Bundle offers: Pair hoodies with accessories like tote bags or caps to increase value and encourage larger purchases.

Marketing tips

Once you’ve made your first sales, it’s time to spread the word. Try these marketing tactics to expand your reach:

Instagram and TikTok: Share lifestyle photos and short videos of your hoodies in real life. Show your designs in action - people buy what they can imagine wearing.
Local SEO: If you’re targeting nearby customers, create a Google Business listing so people can find you easily.
Flyers and events: Hit up university campuses, streetwear pop-ups, or local markets to connect in person, even if you’re running your business from home.
Referrals: Reward customers who bring friends with discounts or free goodies.

Build trust with your buyers

Attracting customers is one thing, but retaining them requires trust. Here’s how you can build it from the start:

Collect reviews early: Social proof encourages more sales.
Show behind-the-scenes content: Give people a peek at your printing, packaging, or design process.
Offer easy returns or free exchanges: Making it risk-free encourages people to buy with confidence.

Stay compliant

Even a small hoodie business has business expenses, taxes, and accounting responsibilities. Here’s what to keep in mind:

Category	What You Need to Pay	What You Need to Do
Sole Trader Tax	Income tax + Class 2 & 4 National Insurance	Submit a Self Assessment tax return each year(ANNA can help with that!)
Limited Company (LTD) Tax	Corporation Tax (25% in the UK)	File annual accounts + Confirmation Statement with Companies House(ANNA can handle all your LTD admin and taxes)
VAT	VAT on sales once registered	Register for VAT if turnover exceeds £90,000/year; optional voluntary registration to reclaim VAT on purchases
Accounting & Record-Keeping	N/A	Track expenses, invoices, and stock(It can all be done within ANNA)
End-of-Year Filing	Depends on tax type	Sole Traders: Self Assessment LTD: Annual accounts + Confirmation Statement(ANNA can do your end-of-year filing for you.)

💡Tip: Relying on ANNA+Taxes for your accounting will ensure you stay compliant and stress-free.

Mistakes to avoid

Launching a hoodie brand is exciting, but there are common pitfalls that can trip up new entrepreneurs. Avoiding these mistakes early will save you time, money, and frustration.

1. Over-ordering stock

It’s tempting to buy large quantities of hoodies upfront, but doing so before you know which designs will sell can be costly. Unsold inventory ties up money and storage space.

💡Tip: Start with small batches or use print-on-demand to validate your designs before scaling.

2. Underestimating shipping costs and returns

Failing to factor in postage, packaging, and potential returns can quickly eat into profits. Customers expect fast, reliable shipping and simple return policies.

💡Tip: Include shipping costs in your pricing and have a clear, fair returns policy.

3. Ignoring your target audience

Designing hoodies without understanding who will buy them is a common mistake. Hoodies for Gen Z streetwear enthusiasts won’t always appeal to corporate clients.

💡Tip: Know your audience, tailor your designs, and use social media and surveys to gather feedback.