Starting a sock business can be very rewarding, but it requires careful planning and preparation. A business plan isn’t only a tool to get a business loan or investment, but it also serves as a roadmap for the direction of the business.

A business plan will define the company’s goals and objectives, research competitors, provide an outline of its finances, and create an actionable strategy tied to established milestones. While many successful businesses started without one, you are more likely to prioritize and reach your goals.

Related: How to write a business plan

With so many businesses vying for attention in today’s crowded marketplace, choosing a sock business name that stands out and conveys the essence of the company can provide an edge. It is important to consider factors such as brand identity, culture, mission statement, country of origin, and even the target market when starting the brainstorming process.

Once you have a list narrowed down, you will need to make sure the name is available to use and hopefully a matching domain name.

Related: Tips on naming a business

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures 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 sock 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 to minimize liability risk 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 that 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
 

After registering the entity, you can begin to registering the business. While there isn’t a license specifically for a sock business, there are some general requirements that vary by state. Most commonly, a sales tax permit, local business license, and Employer Identification Number (EIN) are needed.

Related: Common business licenses, permits, and registrations by state

Before getting pricing from vendors, many vendors will require the business to have their entity formation and sales tax license completed.

To find vendors for your sock business, start by researching a few manufacturers and once you’ve narrowed down your options, contact manufacturers directly to inquire about whether they can create your sock designs, along with delivery times, minimum order quantities (MOQ), and cost per unit. If you plan to focus on a particular type of material, such as cotton or wool, finding a manufacturer that specializes in that material is worth researching as well.

While price is important, don’t overlook quality standards and delivery times, as you will need to budget more for inventory costs if it takes a while for your inventory to be manufactured and shipped by overseas suppliers.

While it may not cost a lot to get started, having sufficient capital on hand for the initial inventory run may be needed. If a bank loan is needed, figure that the bank will want the owner to personally invest 25% before making a loan.

Related: Finding the money to start a business

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.

With the sock industry being very competitive and difficulty in standing out as a new sock brand, it is important for those looking to enter the market with thoughtful and innovative marketing strategies.

One of the most effective ways to make your brand stand out in the crowd is social media marketing. Making use of social media platforms such as Instagram, Facebook, TikTok, YouTube, and Twitter allows you to reach potential customers quickly and inexpensively. Additionally, social media can give your business invaluable feedback from customers on designs, pricing, and more that will help ensure your success.

While social media marketing is can be the primary advertising strategy in the successful launch of any new sock business, it should also be complemented by other proactive marketing efforts such as email campaigns, collaboration with clothing brands, partnering with charities, and even pop-up events at clothing boutiques.

With an all-encompassing goal of building connections with potential customers through both traditional and digital outlets, it is possible to build anticipation around your brand’s launch and make sure your socks fly off the shelves.

Related: Low-cost ideas to market a new business

While some sock companies sell through other retailers such as Amazon or eBay, many will set up as an online sock store. Setting up your first online store can be intimidating, but there are a number of e-commerce platforms that make the job easier, such as Shopify, Wix, and others.

When evaluating options, cost is an important factor, but also take into consideration aspects such as inventory tracking and credit card payment processing systems, as well as website design options to make sure that your customers can navigate easily through your shop.