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. If you enjoy sewing, you don’t have to only pursue it as a hobby. By starting a sewing business of your own, you can transform that hobby into a career. Sewing businesses have minimal startup costs, and you can even start your business part-time out of your own home. All of these benefits make for a business venture that’s accessible and practical, and that could help you become self-sustaining so that you can pursue your sewing business full-time.
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 that 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.
If you’re considering starting your own sewing business, look for a niche where there’s an unmet need. The industry can be competitive, but if you’re creative and find a way to do things differently, you can reduce the competition and provide a good or service that consumers both need and want. Sales platforms like Etsy are already heavily saturated with handmade products, so consider how you can make your products stand out or provide a service to an industry that needs your work.
According to Data USA, the sewing machine operator workforce totals 144,000 sewers who are an average of 47.1 years old. The average female salary in the industry is $25,549, while the average male salary is $30,975. The highest-paying locations were in Rowan County, North Carolina; Franklin, Vance and Warren Counties in North Carolina; and Brighton Park, New City, Bridgeport and McKinley Park, Illinois.
Sewing machine operators most frequently world in the apparel accessories and manufacturing, textile product mill, fabric mill, and furniture industries. Of those industries, operators working in the apparel piece goods, leather tanning and finishing, and dry cleaning and laundry services tended to make the highest incomes. Sewers who make goods to sell may choose to sell them through stores, but increasingly sewers are selling their goods online through sites like eBay and Etsy.
The sewing industry continues to change, thanks to the trends that are shaping this industry. The San Diego Union-Tribune reports that sewing clothes at home have made a comeback. That interest is partially driven by increased awareness of the ethical issues behind fast fashion. With more people interested in where their clothes come from, and the products used to create them, there’s an increased opportunity for handmade goods and small businesses. Sewing has always been an art, but many members of the younger generations haven’t learned this craft. This also creates an opportunity for talented sewers to offer courses and instruction to those who want to learn the art of sewing so they can make their own clothes.
The Strategic Sewing & Quilting Summit reports that the COVID-19 pandemic has also greatly affected the sewing industry. Sewers who have relied on brick-and-mortar sales are being forced to pivot to online sales and course offerings. There’s been an increased need for virtual sewing classes and complimentary services, like sewing machine repair, as more people want to volunteer to help create personal protective equipment. Sewers have responded by offering more online products and services and sending out more newsletters with project ideas.
Sewing businesses’ target markets will depend on each business’s specialty. Potential target markets include clothing designers who need sample garments created, consumers who want to purchase handmade garments or goods, custom made wedding dresses, entrepreneurs looking to outsource some of their manufacturing, and home sewers who want to take classes and learn more about the craft.
Skills, experience, and education useful 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 a sewing 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 to earn a strong reputation.
Teaching experience. If a sewer decides to branch out into instruction and teaching, previous teaching experience will be an asset.
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.
Checklist for Starting a Sewing Business
If you’re thinking about starting your own sewing business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a clothing line business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a sewing business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
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!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Many sewing businesses start out as a home business from a spare room in the house, but it may be necessary to rent a workspace or a storefront as the business grows. Additionally, being located in a visible and high-traffic location may help to bring in new customers.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
The types of business licenses, permits, and registrations that will be required to start a business vary on the activities of the business in addition to where it is located.
Some of the common local, state, and federal registrations most sewing businesses need include a sales tax permit, Employer Identification Number, Occupancy Permit, among others.
Step 6: Find Financing
Many sewing businesses start without needing outside funding since the cost to start a sewing business is relatively low. If a small business loan is needed, the borrower(s) will need to have good credit and personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
Sewing businesses have a number of different marketing options. Common marketing techniques include handing out flyers and business cards with local fabric shops, social media marketing on platforms like Facebook, Pinterest, and Instagram, online advertising, and print advertising. If making your own products, you may also want to consider creating your own website, creating an Etsy shop, and even hitting craft fairs. If selling online, be sure to invest in good photography equipment to capture quality photos.
Establishing a referral program can also help to bring sewers new business.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a sewing business. A few of these include:
– General liability insurance helps to cover expenses that can result if a customer is ever injured while on the business’ property.
– Commercial property insurance helps cover expenses if the business’ inventory and equipment are ever lost or damaged in an event like a fire. This insurance is often overlooked when working out of the home. Most homeowner policies won’t cover damages to business inventory and equipment.
– Worker’s compensation insurance can cover expenses like lost wages and medical bills that the business might face if an employee is ever injured while working.
Many factors will affect the cost to insure a sewing business. To get the best idea of what insurance will cost, request quotes from multiple providers. When comparing the quotes, look at the difference between insurance premiums and consider other factors like coverage limits, exclusions, and deductibles.
Step 10: Hire Employees
When just starting, a business owner can probably perform all of the sewing work that the business requires. As the business grows, it may be time to hire employees. Salary.com reports that hand sewers earn an average of $50,574 per year, though salaries can range from $16,505 to $37,404. According to PayScale, sewing machine operators earn an average of $26,400 per year, though salaries can range from $20,000 to $34,000.
Employee salaries are just one expense that comes with hiring staff. A business will also need to budget for expenses like paid time off, health insurance contributions, and worker’s compensation insurance.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your sewing business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
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 about $2,000 to get the business up and running; you can then expand the business later on.
Some common startup costs for a sewing business include:
– Sewing machine
– Inventory, including fabric, thread, buttons, needles, zippers, etc.
– Sewing supplies, tools, scissors, rulers, measuring tape, etc.
– Furniture, including work tables and a sewing table
– Shipping supplies
How much does a sewing business owner make?
While data on the profits of sewing businesses isn’t currently available, keep in mind that many factors can affect a business’ income. A sewing business that establishes multiple income streams, such as selling handmade goods, providing services, and teaching selling lessons, can appeal to multiple audiences and achieve higher income.
Other factors include how long a business has been in operation, its rates and profits, and whether the owner runs the business full-time or part-time.
Are there grants to start a sewing business?
It’s extremely rare to find a grant to start a sewing business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
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.