How to Calculate Start Up Costs for a Clothing Store

Clothing stores are part of an enormous industry. Everyone needs clothing and everyone buys it. The problem is clothing stores are often expensive to open and complicated to run. Knowing the costs of a clothing store in advance can help with the decision to open one.

Instructions

Difficulty: Moderate

1. Figure the cost of the physical space. This will largely depend on whether you buy or rent. Calculate the average costs for each in your area and compare them if you aren't sure which to do.
2. Calculate the approximate insurance costs. This will also depend on whether you buy or rent. All of the store inventory must be covered by insurance, as well as any equipment. The computers, cash registers, clothing racks, price guns, office equipment and more will have to be covered. In addition, a clothing store needs liability insurance to cover customer accidents. If you own the building, you will need insurance on the building itself.
3. Find out the cost of your inventory. You will need to call the distributors of the clothing labels to find out the approximate costs for the types of clothing you want to sell.
4. Add in the cost of the various equipment you need. Most stores need a computer for handling inventory, pricing guns for creating price tags, display cases and a host of other items. Visit a clothing store and take a look at the items that are being used. Write them down and price the items online or through a company that supplies them to clothing stores.
5. Think about how many employees you will need. Each employee will have to be paid, and you may choose to offer benefits as well. You will need to calculate the costs of their wages and benefits and the cost of keeping the payroll running. Some businesses use an accountant to run the payroll, others hire an office manager and still others do it themselves.
6. Decide what type of security you will need. Most clothing stores use hidden cameras to spot shoplifters. Larger stores also hire security personnel to prevent robberies and to capture shoplifters. A physical alarm system will be needed to protect the store from burglary. The size of the store should dictate what type of security is needed.