How to Start a Clothing Business in Australia in 8 Steps

Starting a clothes business has huge potential and value.

But how can you get started and remain legally compliant?

First, you need to:

Does this sound too complicated?

It doesn't have to be!

Follow this article to learn how to start a clothing business in 8 simple steps!

How Well Do Clothing Businesses Work in Australia?

If you're thinking about beginning a clothing business, the answer is a loud yes.

Let's look into why it is so promising.

First, the average Australian purchases approximately 27 kg of new clothing each year.

This strong demand drives a thriving business that contributes 1.5% of the national GDP, creates $7.2 billion in annual exports, and employs over 489,000 people, 77% of whom are women.

Furthermore, customers are becoming more aware of the environmental and social consequences of their fashion choices, like:

As a result, there is an increasing appreciation for brands that are ethical, environmentally friendly, and transparent.

People choose products manufactured from organic, recyclable, or biodegradable materials. They also encourage businesses that use sustainable energy, reduce packaging, promote fair trade, and donate to humanitarian causes.

This shift in consumer behavior represents a big opportunity.

That is something to keep in mind while building a brand!

Now, if you have made up your mind, the question remains: How do you start a clothing business in Australia?

8 Steps to Start a Clothing Business in Australia

Let’s take a look at 8 actionable steps to learn how to start a clothing business!

Step 1: Do Your Market Research

Imagine planning a vacation without researching your destination.

You wouldn't know what to pack, where to stay, or what sights to see.

The same principle applies to starting a clothing business.

Just as you would plan a trip in detail to make sure that you will have a great experience, research the market to ensure the success of your business.

Here’s why it matters and how you can go about it.

1. Analyze Competitors

Think of it as checking out travel reviews before booking a hotel.

By studying your competitors, you can learn from their successes and mistakes, understand the market standards, and most importantly, identify gaps that you can fill.

But, what is the first step?

Start by identifying your direct (those selling similar products) and indirect (those selling alternative solutions) competitors.

Look at their:

✔️ Product range

✔️ Pricing strategies

✔️ Marketing campaigns

✔️ Customer reviews

📍 Note

Analysis like this can lead to invaluable insights into what works and what doesn’t in your market and help you refine your business strategy.

2. Check Market Demand

Understanding market demand is similar to checking the weather forecast before a journey; it helps you plan for what lies ahead.

You must determine whether there is enough demand for your products to sustain your business in the long term.

How to do that?

✔️ Create online surveys

✔️ Ask your focus group

✔️ Make social media polls

✔️ Read industry reports

✔️ Check consumer data

3. Identify Your Ideal Buyer

Then, once you've completed the previous two steps, you're ready to ask yourself who your ideal customer would be.

It is enough to imagine that person entering your shop.

Step 2: Make Your Business Plan

A good business strategy, like a detailed trip plan, gives you a clear path to follow.

Here’s how to craft it.

1. Write an Executive Summary

The executive summary is the first section of your business plan, but it's often the last one you write.

It provides a short overview of your entire plan, summarizing the key points from each section. 

Highlight the:

✔️ Business name

✔️ Problem your business solves

✔️ Solution of that issue through description of your products or services

✔️ Business goals through the brand vision

✔️ Mission of the brand

2. Craft Business Description

In the business description, you should describe:

✔️ The nature of your clothing business

✔️ The marketplace needs you are fulfilling

✔️ How do your products meet those needs

📌 BonusTip

Explain your business model and what sets you apart from the competition.

For example, if your clothing line focuses on sustainable fashion, highlight how your materials and production processes are eco-friendly.

3. Create Market Strategies

Your market strategies section should answer the question of how you plan to reach your target audience and persuade them to buy your products.

This is where your market research comes into play.

Use the insights you gained from your research and your ideal buyer to explain how you intend to attract and retain customers.

4. Come Up With a Financial Plan

Start with a detailed startup budget, and list all the initial expenses that you need to launch your business, such as:

✔️ Inventory

✔️ Equipment

✔️ Marketing costs

Include an operating budget that outlines your ongoing expenses, such as:

✔️ Rent

✔️ Utilities

✔️ Salaries

3. Choose Your Business Structure

Choosing the right business structure is an important decision that can have a big impact on your clothing business taxes, liabilities, and operational flexibility.

Here is a brief overview to help you decide.

How to Decide the Best Structure for Your Business?

This decision depends on your business goals and your priorities.

✔️ If limiting your personal liability is a priority, a company structure might be the best option. This can protect your personal assets from business debts.

✔️ If you plan to grow significantly or find external investors, a company structure might be more appropriate.

✔️ If your concern is the cost of setting up, sole trader is the cheapest option

✔️ If you want to do business alone and be responsible for everything, keep in mind that sole traders have complete control over their business, while partnerships and companies require decision-making to be shared.

4. Choose Your Business Name

The next step is to choose and register a unique business name.

This is important for two main reasons:

✔️ Brand Identity - It helps you create a distinct brand identity that can attract and retain customers.

✔️ Legal Protection - Registering your business name provides legal protection, preventing others from using the same or a similar name.

Unfortunately, you may not be able to register the name you want because it depends on whether it is already in use.

What Are Your Next Steps?

You have to check the name availability on the ASIC website.

Follow these 3 steps:

💡ProTip

With ANNA you can check name availability in 2 steps!

Color indicators will tell you if the name is available or not 👇

5. Apply for an Australian Business Number (ABN)

An ABN is a unique 11-digit number that identifies your company to the government and the public. 

Whoever is starting a business in Australia and wants to charge customers and clients, needs to secure an ABN.

What is the ABN used for?

✔️ Identify your business for transactions such as ordering and invoicing

✔️ Avoid Pay As You Go (PAYG) withholding on received payments

✔️ Claim Goods and Services Tax (GST) credits

✔️ Access energy grants credits

✔️ Obtain an Australian domain name

✔️ You can apply for ABN with ABR.

6. Register Your Business

You can complete this step only when you already have an ABN or have submitted an application.

Before that, it is not possible to register a business name.

Follow these steps:

📍 Note

The costs for registering a business name are:

✔️ $42 for a one-year registration

✔️ $98 for a three-year registration

💡 ProTip

Want to register the business hassle-free?

Look no further than ANNA!

With us, you can register your company for $199 (a $576 ASIC fee is included).

All you need to do is:

7. Learn Your Tax Obligations

If you want to be sure that your business operates legally in Australia, it's important to understand the tax system.

To help you with this, we've prepared a short overview 👇

You have to stay compliant with tax regulations to avoid penalties and ensure the smooth functioning of your business. This involves:

✔️ Maintaining proper financial records.

✔️ Timely filing of tax returns and BAS.

✔️ Understanding and fulfilling your tax duties

💡ProTip

ANNA offers you a personalized tax calendar!

Benefit from it?

It helps you never miss a tax deadline and make sure that you are compliant with all your tax obligations!

8. Choose a Suitable Location and Set Up Operations

Before choosing a location for your clothing business, it is important to consider a few things:

✔️ Foot traffic - High-traffic regions, such as retail malls and bustling streets, might help your store's visibility and customer base. Assess the flow of individuals at various times of day and week to guarantee continuous consumer exposure.

✔️ Accessibility - Make sure your location is easily accessible by public transportation and has plenty of parking space.

✔️ Competition - Examine the number and density of competitors in the area. While competition is beneficial, too much might make it difficult to distinguish. Look for areas with a high demand for your type of clothing but a limited supply.

Conclusion

No beginning is easy, and neither is this one.

However, this guide is here to help you achieve your goal as easily as possible.

Having a great idea is a fantastic start, but there's also a lot of technical work needed to ensure your business is legally compliant.

Fortunately, there's a much easier way to manage your business operations: ANNA ⭐

How ANNA Can Help You Start and Manage Your Business?

ANNA is a business solution designed to start and run your business.

In addition to opening a company, we offer you a lot more!

For $49 a month for the ANNA One package you get the:

⭐ Managed business documents - Keep all your receipts, invoices, and company documents in one place. We’ll identify matching transactions, extract essential details, and ensure everything is easy to locate and share

⭐ Taxes calculated automatically - Be sure that you are always up-to-date on your tax reporting

⭐ Annual company tax return statement (BAS) - Get your tax obligations taken care of and your statement lodged for your first year of trading

⭐ Automatic GST calculation - Get GST calculation and direct logging with ATO

⭐ Professional looking invoices - See any unpaid invoices in a clear overview

⭐ Bookkeeping - Receive tips on keeping your books clean

⭐ Receipt matching - Obtain matched receipts and categorization of expenses

How does this all sound to you?

Create an account today and streamline your clothing business operations!