Starting a Used Clothing Store

Defining Your Target Market

Identify what your specialty is going to be. Considering, for instance, how fast children grow out of their clothes and their shoes, you may want to focus on a business that carries second-hand clothing for babies, toddlers and adolescents. Maternity wear could be a big seller since the clothing is only worn for a short period of time. Another option might be to carry an inventory of men's and women's clothing that could be worn for interviews and re-entering the job market. Yet another focus might be on donated prom dresses for high school girls who can't afford to pay full price for never-before-worn formal wear.

Acquiring Your Inventory

Determine how you're going to acquire the merchandise for your store. You might rely on community donations, troll yard and garage sales or visit neighborhood flea markets. It may also be practical to consider a consignment arrangement whereby you showcase the merchandise from another shop or individual seller but don't pay for it until it's sold.

Online Versus Brick and Mortar

Your start-up capital will dictate whether you can afford to buy or lease a shop for your used clothing business. If you can accommodate the overhead costs of rent, insurance, utilities, office equipment and display racks, you'll want to locate your shop in a low or middle income neighborhood that is either easily accessible by public transportation or has convenient on-site or street parking. If start-up expenses are tight, an option is to create a 24/7 virtual store that displays digital images of the merchandise for sale and allows for purchases via credit card, check or PayPal account.

Becoming an Official Business Entity

Whether your used clothing store is a storefront, a mobile operation, an online shop or is conducted out of your home, you'll need to acquire a business license. The website of the Small Business Administration can walk you through the necessary steps of becoming an official corporate entity. You'll also need to register your business name with the Secretary of State's Office in the state in which you plan to operate as well as set up a business bank account. Note: If you're going to have customers regularly coming to your house, you'll need to check and see that your home is zoned commercial and that your homeowner's insurance provides adequate coverage.

Establishing a Game Plan

Write a detailed business plan. This is critical if you need to get a loan from your business bank in order to open your doors. Your business plan should address issues such as your projected operating expenses, whether you plan to hire staff or run everything yourself, insurance (including workers' comp if you have employees), hours of operation, marketing strategies (newspaper ads, flyers, postcards, website, word of mouth publicity) and income expectations for the next 3 to 5 years.

Pricing

The higher quality the item, the higher price you'll be able to charge for it. Before any merchandise goes on display in your used clothing shop, you need to make sure that it is clean, pressed and free of defects such as lost buttons, frayed cuffs, stains, or ripped hems.

Resources

• Small Business Administration