Do you want to start a baby clothing line? If YES, here is a complete guide to starting a baby clothing line business with NO money and no experience.
Okay, so we have provided you an in-depth sample baby clothing line business plan template. We also took it further by analyzing and drafting a sample baby clothing line marketing plan backed up by actionable guerrilla marketing ideas for baby clothing line companies.
Table of Content
- 1 Why Start a Baby Clothing Line?
- 2 Industry Overview
- 3 Market Research and Feasibility Studies
- 4 Niche ideas Within the Business You Can Specialize in
- 5 List of Well Known Brands in the Industry
- 6 Franchise vs Starting a Baby Clothing Line from Scratch
- 7 Possible Threats and Challenges You Will Face
- 8 Best Legal Entity to Use for This Type of Business
- 9 Insurance Policies
- 10 Intellectual Property Protection/Trademark
- 11 Is Professional Certification Needed to Operate?
- 12 Legal Documents You Need to Operate
- 13 Financing Your Baby Clothing Line
- 14 Choosing a Suitable Location
- 15 Technical and Manpower Details
- 16 The Service Delivery Process Involved
- 17 Marketing ideas and Strategies
- 18 Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
Why Start a Baby Clothing Line?
Every day babies are born, which means that parents will always be looking to buy baby clothing amongst other baby products no matter the state of the economy. A baby clothing line therefore has the potential of being lucrative and can be started in a number of ways; however it is vital that you carefully plan out how you intend to run the business and what you are looking to achieve before starting your business.
You should realize that there are already huge brands that have made a name in the industry and so if you are not careful, your business will not likely last long. Before you even think of what name to call your business or even start making samples, it is vital that you conduct a thorough research as this will save you from wasting your time on a venture that will not be profitable.
The researches you conduct will enable you understand the market so that your intended designs and packaging are marketable and that you are able to have the right marketing, sales and advertising strategies. In starting a baby clothing line, you should know who your target market will be, how large the consumer pool is, how much income they make, where they shop and what their price resistance are.
It is also important that you scope out the products of your competitors because while you might be looking to be unique, you could also learn some lessons from studying their strategies. Also, you will need to be careful about trying to fill a void in the industry, because there might be a reason why the void exists and so in a bid to fill the void, you might end up losing your investment.
However, if you conduct your research and find that the void is actually a niche that will offer your business a tremendous opportunity, then it is quite easier to go into. Even though you might feel that your idea is tremendous, it is usually best to seek expert opinion especially from industry professionals before you launch your business.
You should be aware that seeking advice from industry experts will mean that you might have to deviate from your original vision because some of your ideas might not have been workable. Deviating from your original vision is not a terrible thing as long as you are still able to achieve your goals and objectives.
Writing a comprehensive business plan is invaluable and critical to the success of your business. Entrepreneurs that do not write out a business plan often find themselves struggling when faced with certain challenges.
Starting a Baby Clothing Line Business – A Complete Guide
According to a recent report by IBISWorld, it is expected that more individuals will continue to spend on baby clothing especially on brands that are considered high-end. The periods between 2012 and 2017 has seen a macroeconomic growth that has enables shoppers to be able to afford high-end children clothing.
Aside from having to physically visit stores, many consumers are also buying from online stores especially as the increase in the use of smartphones and tablets as well as easy connection to the internet has caused the industry to boom even though it has also caused a decrease in visits to brick and mortar stores.
According to statistics from IBISWorld, the baby clothing stores – which is merged with the children (under 17) clothing store – in the United States has generated between $10 billion in revenue per annum within a five year period (2012 – 2017).
There has been negative growth of (-1.7) experienced in the industry within the forecast period. There are nearly 17,000 baby clothing stores in the United States employing nearly 90,000 people. This figure does not capture online-only retailers and department stores. The reason for the regressive growth experienced by the industry is that parents with more than one child usually use the baby clothes of the older children for the new ones.
The demand for baby clothing line industry is determined by the changes in the country’s population as well as other macroeconomic variables like the per capita disposable income. Demand is often influenced because factors such as the price of synthetic and non synthetic fibers which often affects the price of the clothing and how much the operators have to procure the materials have to be taken into consideration.
Also, the industry has had to face external competition from online stores who offer lower prices due to their lower operating costs and department stores who offer consumers the benefits of one-stop shopping over the past five years (2012 – 2017)
Globally, it is predicted that the baby/children wear will generate more than $321 billion by 2024 due to factors such as in crease in the exposure of children to the media as well as an increase in consumption, materialism and spontaneous purchases, rise in per capita disposable income of parents as well as varied options in luxury and designer clothing brands.
The industry is witnessing a mixture of opportunities as well as challenges that arise from the negative correlation of fertility rate to the female literacy levels. This is because females are attaining higher literacy levels which have brought about delayed marriages and fertility issues thereby leading to a decrease in childbearing.
The children’s wear market is one of the most lucrative segments in the apparel industry on a global scale and according to estimation; $173.6 revenue will be generated in 2017. The market is recession proof as it wasn’t in the least bit affected by the economic downturn experienced in different economies on a global scale.
The industry cannot be affected by new fashion trends or economic dynamics and is therefore regarded as a fastest growing market that will see a CAGR stability of more than 4 percent till 2017. The exact market size of the industry cannot be accurately predicted due to the fact that most of the companies in the industry are privately owned.
The children wear industry is being anchored on three distinct factors; individual consumers who are the buyer segment; clothing wholesalers and manufacturers who are the major suppliers and the retailers who source for supplies from the manufacturers and wholesalers.
The behavior of the individual consumers has seen an increase in baby clothing retail sales especially as the gifting trend has been reinforced. According to a report that was published by Global Industry Analysts Inc, the global market for children clothing is characterized by a competition level that is moderate and this is due to the fact that there are a large number of players and lower switching costs.
Globally, the major consumers of the children wear market are United States and Europe and the reasons are the increase in working population and the growth in double income earning for families. These reasons are likely to continue to cause a boon in the apparel market for a particular period of time. Other reasons for the positives experienced by the industry are the influencing power of the children on their parents, smart adverts from brands, enhanced peer comments and also an increase in international travel.
Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic analysis of those who require baby clothes are new parents, relatives of the parents, children pageantry, children boutiques, department stores as well as many others. If you are therefore looking to start your baby clothing line in the United States, you should try to make your demography as wide as possible as there are so many people who require baby clothing for a number of reasons.
Niche ideas Within the Business You Can Specialize in
The baby clothing line business engages in retail of specialized infant and children wear from regular dresses to night wears and more. Even though there aren’t much niche areas available in the industry, it is only through offering a niche product that you can stand out from others in the same industry especially as the competition in the industry is stiff.
Before you however decide on what niche products you should go into, it is important that conduct a thorough research on the niche so that you do not end up wasting your time and money on something that consumers do not care about.
Some of the niche ideas within this particular business that one can specialize on include;
- Infants’ and toddlers’ clothing
- Girls’ clothing
- Boys’ clothing
The Level of Competition in the Industry
The baby clothing line industry is a risky one due to its cyclical nature of fashion. The industry is very competitive because not only does the entrepreneur require more than great designs, finding fabric wholesalers, large scale sewing factories and opening up a storefront will definitely pose a limit to how small scale brands can compete against the large scale ones.
The changing trends in the industry due to change in customers tastes and preferences can limit how brands may compete against each other. What consumers are on the lookout for are designs that babies can wear regardless of the seasonal changes and so it is important that your clothing line has a mix of designs as well as colors, this way customers can always come to your store knowing that they will get what they want regardless of the season.
If you are therefore looking to start your baby clothing line in the United States of America, you should not only take industry trends into consideration but you should also consider those that you will be competing against especially the big brands that will be in more locations and will have a larger share of the market due to customer-brand loyalty.
List of Well Known Brands in the Industry
The baby clothing industry is ruled by big brands who are all looking to get a fair share of the market for themselves. Most of these brands became popular due to the celebrity connection, advertising and publicity strategies, the superiority of designs and fabrics and so many other factors.
Knowing the big brands in the industry will help you know how well to uniquely position your own brand in order to compete fairly against the major players. Below are some of the major players in the baby clothing line industry known not only within the United States but all over the world as well;
- Carter’s, Inc
- The Children’s Place
- Ascena Retail Group
- Gymboree Corp.
- Gap, Inc
- Fruit of the Loom, Inc
- Hanesbrands, Inc.
The children clothing industry has experienced great growth out of the two specialty retailers within a four year period – 2006 and 2010. This does not however mean that the market does not pose a significant risk to entrepreneurs especially as fashion in this segment is referred to as cyclical in nature.
This however does not mean that there aren’t successful entrepreneurs in this industry and this is due to the fact that they engaged in adequate preparation and planning before venturing into the industry.
If you are looking to enter into the baby clothing line business, you will require more than just having great designs as there are other factors that have to be taken into consideration such as finding reliable wholesalers and deciding whether to open a storefront, run your business from online only or do a combination of both.
When looking to establish a baby clothing store, the income of the surrounding community has to be taken into consideration as this will enable the entrepreneur realistically project expected earnings for the business and ensure that it aligns with the overall projections.
Establishing a high-end baby clothing line in a wealthy neighborhood can still leave the entrepreneur struggling as most wealthy people who come from money will prefer to buy from recognized names.
The trends in the baby clothing industry is similar to that experienced in the regular fashion industry as seasonal changes usually determine how demand will rise and fall. Therefore entrepreneurs running a baby clothing line often have to have mixed inventory so as to avoid low inventory turnover.
Franchise vs Starting a Baby Clothing Line from Scratch
One decision that you will have to face as an entrepreneur looking to start a business is whether to start the business from scratch or to buy a franchise. While each option is a great, it is however not an indication of the business becoming a success because there are several factors that have to be taken into consideration.
Entrepreneurs that are looking to hit the ground running and want to run a business while having the support of someone in the business usually choose to buy a franchise. However, before buying a franchise, ensure that you have conducted a thorough research in order to know which franchise will be right for your business so that you do not end up wasting money.
Starting a business from scratch affords entrepreneurs the opportunity to learn about the business as well as controlling the pace which the company should grow. The entrepreneur that starts his business from scratch is required to know about all the aspects of the business, whether he or she will hire employees or not. This is so that one can be on top of happenings in the company.
However, while it might seem that starting one’s business from the scratch might be overwhelming, it is often encouraged that entrepreneurs have a business plan written down that will guide them when they are running the business.
Possible Threats and Challenges You Will Face
Regardless of the industry you are going into, it is expected that you know about the possible threats and challenges that you are going to face and how you intend to overcome them; anything less will mean that you are not serious about the business you intend to start.
However, the fact that you are going to encounter threats and challenges that you will not easily handle doesn’t mean that you should panic as you will need to remain focused on why you started the business.
Some of the threats and challenges that you are going to face when looking to start your baby clothing line in the United States include; external competition especially from established brands, online only stores as well as departmental stores, changes in industry trends as well as economic downturn that will lead to a decrease in disposable income.
Best Legal Entity to Use for This Type of Business
One important decision that you will have to make when looking to start your baby clothing line is what legal entity will best suit your business. The issue of a legal entity is important because it has an impact on how you will be able to attain the goals and objectives that you have set for your business.
If you are looking to make your business a national brand, then choosing the wrong legal entity will not see you achieving that dream. It is usually best to seek legal advice when you intend setting up a legal entity so that you would be guided into choosing the most appropriate one for your business.
In the United States, entrepreneurs looking to start their business choose from the following legal entities; sole proprietor, partnership, corporation and Limited Liability Company (LLC). Each of these legal entities have attributes that differ them from the other and which the entrepreneur usually has to use in order to make the correct decision as regards his or her new business venture.
For example, while the sole proprietorship might be the most common legal entity used by entrepreneurs in the United States due to its simple nature when it comes to profits and losses and ownership structure; the sole proprietorship will however be detrimental to a business that is looking to expand to a national level and have several locations.
However, entrepreneurs that start off under a sole proprietorship usually have the advantage of being able to easily change to a legal entity that suits the needs of their business. This is not so for legal entities such as a corporation, where it might not be easy for the entrepreneur to change to another legal entity.
The reason why entrepreneurs go for legal entities such as an LLC or a corporation is due to the personal asset protection they get as the business under these legal entities are seen as being separate from the owners. However the LLC differs from the corporation in that it is regarded as more flexible to the corporation which is seen as highly regulated.
Catchy Business Name ideas
For any entrepreneur looking to start any business, one of the aspects that cannot be ignored is what to call the business as you must have a business name in place before you can think of incorporating or filing for a business license. In choosing a business name, you can decide to use your name or a fictitious name.
While choosing a business name might look like an easy thing to do but when you have to ensure that the business name is unique, can be easily pronounced and remembered and mustn’t be used by anyone else in the same industry, then you will see that it is not that easy.
Some of the catchy business name ideas suitable for a baby clothing line include;
- Prim, Inc
- Giggles Corp
- C babies Clothing Store
- Drool Wears Inc
- Toddle Wears Corp
There are a number of calamities that can occur and cause your business to shut down, which is why you are supposed to be prepared for disasters by being able to rebuild your business whenever you face them. The Insurance Information Institute (III) has it that whenever a disaster occurs, a quarter of the businesses never recover and so if you are an entrepreneur that has emptied your savings or put in your all into starting a business, it will be foolish to not protect your business from any unforeseen circumstances that might occur.
If you do not have the right information as regards the insurance policies which you should purchase, engaging the services of an insurance agent or broker will surely be the right step to take. Some of the insurance policies which you should therefore consider purchasing when looking to start your baby clothing line in the United States are;
- General Liability Insurance
- Workers’ Compensation Insurance
- Casualty Insurance
- Product Liability Insurance
- Professional Liability Insurance
- Umbrella Policies
Intellectual Property Protection/Trademark
The clothing industry regardless of the segment will always experience a lot of copying due to the fact that most of the designs are hard to protect especially as you have to be careful not to have copied the design of another and so as an entrepreneur there are few legal ways by which you can protect your brand.
One of the ways by which you can protect your brand is through a trademark, where you protect the name of your product, name of your company or logo design. However, a trademark does not protect a product design or an invention. If you really want to know your options considering protecting your intellectual property protection, you should engage the services of an attorney that is well versed in intellectual property laws.
Is Professional Certification Needed to Operate?
As long as you have great designs and the capital to start and run your business successfully, you will have no need of having to acquire professional certification as you can hire those with fashion degrees or factories to produce the kind of clothing that you want especially as customers do not care about professional certifications when it comes to purchasing clothing for their babies.
However, if you are looking to stand out from your competitors, then it is important that you acquire some professional certification especially as this will be useful when it comes to bidding for certain contracts in the industry.
Legal Documents You Need to Operate
When looking to start a business, there are several documents that you will require in order to avoid running into trouble with the law. This is why entrepreneurs are often encouraged to engage in thorough research regarding the business they are looking to start up as this will ensure that they are aware of all that is needed to start the business.
If you do not know how to go about getting the legal documents you need, engage the services of a lawyer to help you out. Below are some of the legal documents that you will need to run a baby clothing line;
- Certificate of Incorporation
- Operating Agreement for LLCs
- Business Plan
- Business License and Permit
- Contract Documents
- Sales Tax Permit
- Insurance Policy
- Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
Financing Your Baby Clothing Line
When looking to start any business, it is important that you take finance into consideration. This is because why you might have a fantastic business idea; not having the capital to bring it to reality will mean that your business idea will never be brought into fruition.
Due to how tasking sourcing for startup capital is, entrepreneurs are often advised to have a business plan in place that will ensure that they are able to approach external investors. Some of the options that you should explore when it comes to starting your baby clothing business are;
- Generating part of your startup capital from personal savings and sale of stock or properties
- Applying for loan from a commercial bank
- Approaching an external investor for start-up capital
Choosing a Suitable Location
The one aspect that will have a profound impact on your business is where you intend to locate your business. The baby clothing line business can be run from home as all you will need to do is approach departmental stores and baby boutiques and have them stock up your product, while you run the administrative part of your business from the comfort of your home.
If you are therefore going to run the business from home, it is essential that you keep your work area separate from the rest of your home and that all documents are carefully stored especially if you have little children or pets around the house.
You can always run your baby clothing line online as the internet has made reaching one’s target audience to become more effective. Running your business online will lead to you having low overheads than someone in a brick and mortar facility. You can however combine retailing your baby clothing line in a brick and mortar facility as well as online.
If you feel that it is best to rent or lease a facility with which to run your baby clothing line from, then it is necessary that you choose a location that has foot and vehicular traffic and that you are located in the hub of your target market. Also, ensure that the facility is easily accessible and is convenient for your intended target market.
If you are new to the dynamics of choosing an appropriate location for your business, get a map as well as engage the services of a real estate agent or broker to help you out. Ensure that you have set aside a budget so that you do not end up causing a strain to your overall budget.
Technical and Manpower Details
No matter how bad the economy might be, parents cannot resist buying new clothing for their babies and relatives cannot resist gifting new born babies and so starting a baby clothing line can become a lucrative business venture. The first thing you would need to do in setting off your business venture is to design the clothing line and then create a portfolio, this is necessary as you will use it to introduce your clothing line to manufacturers or potential buyers.
Once you have created the various designs for your baby clothing line, you would then need to produce a sample of the cloth. If you can sew, this will save you money and if you can’t sew, you can always pay someone to produce a sample for you.
One decision that you will need to take is either manufacturing the baby clothing line yourself or outsourcing the task and then focusing on other aspects of your business.
This decision should be carefully consider because manufacturing yourself will mean having bigger share of the profits for yourself but the workload will triple because not only will you handle the administrative, financial and marketing aspect, you will also handle all the business aspects that are involved in running a manufacturing plant.
What most entrepreneurs do is that they start small by manufacturing the baby clothes themselves but in limited quantities until the business stands on its feet and then once you are looking to expand, you can then outsource the manufacturing aspect.
Ensure that you get in touch with chain stores by placing calls or sending them mails with your sample. Once you are able to get your clothing line into a major store, then you might also snag the interests of other stores.
The Service Delivery Process Involved
The process involved in a baby clothing line involves sketching various designs and then creating samples for the designs by either doing it yourself or outsourcing the job. Even though the clothing line is for babies, parents are the target market and so the designs and samples must be in line with industry trends.
Once you have had your clothing line out, you will need to contact major chain stores in order to get them to accept your clothing line.
Marketing ideas and Strategies
One of the most important aspects of running a business is in promoting the business in order that it might achieve your intended revenue generation goals. Marketing does more than help generate revenue as it also ensures that a lot of awareness has been generated for the business.
Marketing involves anticipating the needs of your customers and meeting them and this cannot be done if a thorough market research hasn’t been conducted. The market research does not only let you know everything there is to know about your target market but also about your competitors.
Location plays a crucial role when it comes to marketing because the more visible you are, the easier it is for customers to remain aware of your brand and so getting into huge chain stores is a marketing activity all by itself. Ensure that you have created a marketing plan before attempting to create any marketing strategies so that you have an idea of what you are looking to achieve.
Below are some of the marketing ideas and strategies for this particular business;
- Employ marketing executives to physically market your baby clothing line
- Distribute handbills and fliers in various strategic locations
- Install flexi banners and use this to market your products and increase awareness for your brand
- Advertise your baby clothing line in local newspapers and related magazines as well as on radio and television stations
- Create a website with which to advertise your baby clothing line
- Ensure that your baby clothing line is listed in yellow pages as well as online directories
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
If you are looking for how your baby clothing line will achieve national recognition, then you should know that boosting awareness for your brand and creating a corporate identity is the major way by which you can achieve your goals and objectives. One good thing with boosting one’s brand is that not only do you get to create awareness for your product and or service, a percentage of the awareness created will generate revenue for your business.
Due to the fact that the industry is highly competitive as there are several brands all jostling to get a fair share of the market to themselves, you can choose to hire an experienced publicity consultant in order that you might get a chance to be visible in the industry and compete fairly against your competitors.
You should however note that not all activities intended to help you create awareness for your business will cost you money especially as the internet has made it possible for businesses to reach a larger audience in a more effective way that might cost next to nothing.
Below are some of the strategies that you can use to boost awareness for your brand and create a corporate identity for your baby clothing line;
- Advertise your baby clothing line in local newspapers, children magazines as well as on television and local radio stations
- Create a website displaying your clothing line and ensure that you deploy Search Engine Optimization (SEO) tactics in order that your website might come out tops in search engines
- Make use of social media platforms such as Facebook, Instagram, Pinterest and Twitter to promote your baby clothing line
- Engage in and sponsor certain community activities in order to create more awareness for your business
- Distribute handbills and paste fliers in various strategic locations
- Call your potential buyers or send them mails and a sample of the clothing in order to promote your business