A fashion business is an enterprise or company that is within the fashion industry. It operates within a complex ecosystem that involves designers, pattern makers, manufacturers, marketers, merchandisers, buyers, and sales professionals.
As a business owner in this industry, your business needs to navigate factors like changing trends, cultural influences, and consumer demands to stay competitive in the market.
Fashion businesses can include everything from high-end luxury brands to fast fashion retailers, as well as independent designers and boutique shops.
No matter the segment of the fashion industry you decide to put your money in, this article will guide you on how to start a fashion business in Nigeria that will be profitable.
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How Profitable is Fashion Business?
The fashion business is a very profitable business in Nigeria, that can fetch you a good sum of money especially if you are in the fashion businesses that are highly lucrative such as; Traditional Clothing Brands (eg Ankara and Aso Ebi), Luxury Fashion Boutiques, African Print Clothing Brands, Fashion Retail Chains (eg Shoprite and Mr. Price), Online Fashion Retailers, Fashion Design Schools and Workshops, Fashion Accessories Brands, and Streetwear Brands.
But if your fashion business is not among one of those classified as a highly lucrative fashion business, you might struggle to maintain profitability.
In addition, it is important to note that factors such as business strategy, product quality, market positioning, and effective marketing play a lot when it comes to profitability.
How much does it cost to start a Fashion Business in Nigeria?
The cost of starting a fashion business in Nigeria can vary widely based on the type of fashion business you want to establish, the scale of your operations, your location, and the quality of products and services you intend to offer.
For instance, if your intention is to start a fashion designing business (aka Tailor Business)—where your focus involves crafting tailor-made garments according to individualized designs, in addition to producing and marketing your own creative designs. The sums ranging from 200,000 to 500,000 Naira will cover the overall expenditure that includes costs related to tailoring (sew machine inclusive) and securing a space for your operations.
On the other hand, if your intention is to start a capital-intensive fashion business, such as trading in traditional clothing brands, fashion design schools and workshops, luxury fashion boutiques, or engaging in online fashion retail, you will need a minimum startup capital of N2 million Naira. The reason for such a high amount of capital is due to the intense competition in these types of fashion businesses. It will take you to spend on quality clothes and creating an appealing store ambiance to have a competitive edge.
How to Start a Fashion Business In Nigeria
Below are the steps to start a fashion business in Nigeria:
Step 1. Determine your Fashion Business Niche
The fashion industry offers a wide range of business opportunities, catering to different levels of investment and competitiveness. Whether you’re working with limited funds or have a substantial budget, you can find a suitable niche to generate income within the fashion industry.
While every segment in the fashion industry has profit potential, it’s a good idea to concentrate on one particular area to build a successful fashion business. This doesn’t mean you can’t explore multiple segments if you have the resources to do so. However, if your budget is tight, focusing on a specific fashion business niche can be more advantageous.
Here are some fashion business niches to consider if you’re unsure which one matches your budget, goals, and objectives:
- Clothing Line
- Accessories Brands like jewelry, handbags, belts, and scarves.
- Shoe Brand
- Bridal and Wedding Boutique
- African Print Clothing using traditional African fabrics like Ankara and Kente.
- Children’s Wear Brand
- Activewear and Athleisure clothing that combines comfort and style.
- Tailoring and Alterations
- Uniform Manufacturing for schools, corporations, sports teams, and other organizations.
- Fashion Retail Store (physical store or an online platform)
- Fashion Design School:
- Fashion Consulting
- Fashion Blogging/Influencing for sharing fashion tips, trends, and outfit inspiration.
- Online Marketplace for various fashion brands and designers to sell their products directly to customers
- Lingerie Brand
- Vintage Clothing Store
- Men’s Wear Boutique
- Plus-Size Fashion Brand
- Streetwear Brand, and many more.
This step is all about choosing the right fashion business niche as it is the foundation of your journey of having a successful fashion business in Nigeria.
Step 2. Conduct market research on your chosen niche
After deciding on your chosen fashion business niche, it is crucial to conduct thorough research to better understand the market landscape and the preferences of your potential customers. This involves collecting market data on several key aspects;
- Current Trends: This normally includes colors, styles, materials, and design elements that are currently popular.
- Market Demand: Are there people who are actively looking for the products you plan to offer? Understanding the demand helps you gauge the potential market size.
- Competitor Analysis: This analysis helps you understand what’s already available in the market and how you can differentiate your business. Never make the mistake of copycatting your competitors 100% as customers would find it difficult to patronize you.
Ultimately, the goal of this step is to refine your business concept, ensuring that it aligns with the needs and preferences of your target audience while also allowing you to differentiate yourself from competitors. This solid foundation of research sets the stage for successful business planning and execution.
But in the case where your research findings suggest some difficulties that you are not capable of solving especially when it comes to financing, you can choose another type of fashion business to invest in.
Step 3. Business Plan
With the completion of a successful conducted market research, you should be able to easily develop a business plan for your business. This business plan serves as a road map for your journey to a successful fashion business and it should highlight areas such as;
- Your Business Concept
- Target Audience (definitely going to be Only Nigerians in the short run)
- Your Unique Selling Proposition (USP)
- Pricing Strategy
- Marketing Plan, and
- Financial Projections
In essence, a business plan is a strategic tool that guides your fashion business’s actions and decisions, helping you work towards your goals and navigate the challenges of the industry.
Step 4. Meeting the Legal Requirement
The legal requirement are set by the government and they are not optional meaning it is compulsory and it comes with legal punishment to anyone found as a violator. Below are the legal requirements that must be met before you can start a fashion business in Nigeria;
- Business Registration: Depending on your business size and structure, you will need to register as a Business Name, Private Limited Company (Ltd), Limited Liability Partnership (LLP), or other suitable entity with the CAC.
- Licenses and Permits: If you are into the small-scale fashion business or the fashion business that involves every other sector that excludes the manufacturing fashion business sector, you only need the “Sales Tax Permit” to operate your fashion business in Nigeria.
- Tax Identification Number (TIN): If your fashion business hires employees or operates as a corporation or LLC, you’ll likely need a TIN, which is a unique identifier for tax purposes.
- Intellectual Property Protection: Consider registering trademarks for your brand or logo to protect your intellectual property rights if you are in the creative and manufacturing sector of the fashion business.
Remember that adhering to legal procedures sets the foundation for a successful and legally compliant fashion business in Nigeria.
Step 5. Location and Setup
Deciding how you’ll operate your fashion business is a crucial aspect of your overall business strategy. You’ll need to choose whether you’ll have a physical presence (brick-and-mortar), operate exclusively online (E-commerce), or employ a combination of both (Hybrid).
If you choose to establish a physical store, the location should be based on factors such as; visibility, high foot traffic, accessibility, demographics, and of course rental costs.
Whichever you decide to settle for, make the physical or online shop appealing enough to increase customers’ experience.
Step 6. Marketing and Promotion
Marketing and promotion are essential components of building brand awareness, attracting customers, and driving sales for your fashion business.
A well-executed marketing strategy helps you connect with your target audience, showcase your products, and create a strong brand presence in the market.
The marketing and promotional strategies used in the fashion business can be both online and offline or one of them, it all depends on the type of fashion business you are running and your vision for your business. These marketing and promotional strategies include;
- Branding and Visual Identity
- Content Creation that showcases your fashion products, tells your brand story, and engages your audience.
- Social Media Marketing (such as Instagram, Facebook, Pinterest, TikTok, Twitter)
- Influencer Collaborations
- Attending Fashion Shows and Events
- Online Advertising such as Google Ads or social media ads, to reach a targeted audience and drive traffic to your website or e-commerce store.
- Email Marketing
- Collaborations and Partnerships with other brands, designers, or businesses to create joint promotions or collections.
- Seasonal Campaigns around trends, holidays, or special occasions.
- Listen to Feedback and Engage with customers.
In summary, a well-defined marketing strategy will significantly boost your fashion business’s visibility, customer engagement, and overall success.
Note: The next two steps are for those who are into the creative or manufacturing type of fashion business.
Step 7. Sourcing Materials and Suppliers
Sourcing materials and establishing relationships with suppliers are crucial steps in the production process of your fashion business. It involves identifying and procuring the fabrics, materials, and resources needed to create your fashion products. Here’s a breakdown of what it takes to source quality materials and resources;
- Identify Materials and Resources: Determine the specific types of fabrics, materials, and components required to create your fashion products. Consider factors such as quality, durability, aesthetics, and suitability for your designs.
- Research Suppliers: Look for potential suppliers who offer the materials you need. This could involve researching online, attending trade shows, networking within the fashion industry, and seeking recommendations from other designers or business owners.
- Supplier Evaluation: Evaluate potential suppliers based on criteria such as product quality, pricing, delivery times, reliability, and their ability to meet your specific requirements.
- Sample Testing: Before committing to a supplier, request samples of their materials. Test the samples for quality, color fastness, texture, and other relevant attributes to ensure they meet your standards.
- Negotiate Terms: Once you’ve identified suitable suppliers, negotiate terms that work for both parties. This could include pricing, payment terms, order minimums, delivery schedules, and return policies.
- Build Relationships: Establish strong and mutually beneficial relationships with your suppliers. Effective communication and collaboration can lead to better service, timely deliveries, and potential cost savings.
- Diversify Suppliers: Consider working with multiple suppliers for critical materials to reduce the risk of disruptions in case one supplier encounters issues.
- Sustainability and Ethical Sourcing: If your fashion business emphasizes sustainability and ethical practices, choose suppliers who align with these values. Ensure that your materials are sourced responsibly and ethically.
- Regular Communication: Maintain open lines of communication with your suppliers. Stay informed about any changes in their offerings, lead times, or production capabilities.
- Quality Control: Implement quality control measures to ensure that the materials you receive from suppliers meet your specifications. Inspect shipments upon arrival and address any issues promptly.
- Long-Term Partnerships: Aim to build long-term partnerships with reliable suppliers. Establishing a history of consistent orders and good communication can lead to preferential treatment and better terms over time.
- Continual Improvement: Regularly assess your suppliers’ performance and consider seeking feedback from your production team. Look for opportunities to optimize your supply chain and make improvements where necessary.
Effective sourcing and supplier management contribute to the overall quality and success of your fashion products.
Step 8. Production and Manufacturing:
Production and manufacturing refer to the process of creating your fashion products, from turning raw materials into finished goods to preparing them for distribution.
This step is critical to bringing your design concepts to life and delivering high-quality products to your customers.
Production and manufacturing in the fashion business can be carried out in two ways; In-House and Outsourcing.
Producing in-house gives you direct control over the manufacturing process, quality control, and turnaround times. However, it can require significant investment in equipment, facilities, and skilled labor.
Outsourcing involves partnering with external manufacturers who specialize in producing fashion products. This option can be cost-effective, especially for startups, as it allows you to focus on design, marketing, and business operations. However, you need to carefully choose reputable manufacturers to ensure consistent quality.
You need to decide whether you will handle production in-house (within your own facilities) or outsource it to external manufacturers. Each approach has its own advantages and considerations.
Step 9: Secure Funding
Once you have an estimate of how much money you need to start your type of fashion business and your budget seems to fall short of the financial requirement, then you may proceed to seek external funding. These external fundings may include;
- Loans from a bank or other financial institution.
- Grants: These often come with specific requirements and may not be available to everyone.
- Investors: This can include family and friends, angel investors, or venture capitalists.
Overall, the goal of exploring these funding options is to find the best way to secure the necessary funds to launch and sustain your fashion business. It’s important to carefully consider the pros and cons of each option, as well as their implications for your business’s financial health in the long term.
- How to Get Loan From UBA Bank
- Federal Government Loans for Small Business in Nigeria
- How to Get a Loan to Start a Business in 11 Steps
- How to Get a Loan to Start a Business from the Government
- From Concept to Success: How to Start a Clothing Business
- How to Start a Small Clothing Business from Home in Nigeria
- The Secret of Okrika Business: How to Start Okrika Business
Final Thoughts on Starting a Fashion Business in Nigeria
In conclusion, starting a successful fashion business in Nigeria involves a series of strategic steps such as; choosing your niche, conducting market research, business planning, legal compliance, location and setup, marketing and promotion, sourcing and inventory, and securing funding. These steps lay the foundation for growth and prosperity. Each phase of this journey is integral to achieving your business goals and realizing your vision in the vibrant Nigerian fashion industry.
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