How to Start a Clothes Shop
Do your friends turn to you for the latest fashion advice? Do you love sharing your knowledge? If you love fashion, know where to go to stay on top of the latest trends and enjoy working with people, then it may be time to turn your passion into a paying gig and open a clothes shop. According to Entrepreneur.com, you can expect to need about $200,000 in capital.
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Things You'll Need
- Business license
- Liability insurance
- Business plan
- Sales-tax permit
- Fixtures
- Mannequins
- Location
- Employees
- Clothing
- Accessories
- Signage
Instructions
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Understand what you're getting into. As a business owner, you may work 14-hour days, seven days a week for your first year, or until you can afford to hire a manager that you can trust to help you run your business.
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2
Write a business plan. In the clothing business, it can be easy to get carried away. You may be tempted to purchase excess inventory or expensive, eye-catching fixtures and accessories for your store. You'll need to create a budget and stick to it. Unavoidable costs include: rent, fixtures, furniture, payroll, utilities, a business license and sales-tax permit, liability insurance, worker's compensation insurance, small-business taxes, an accountant, advertising and inventory. Detail what experience you bring to the table and what you lack. Taking a part-time job at a clothing store will help get you up to speed on the ins and outs of retail.
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3
Find your niche. From trendy sportswear to chic to vintage, there are dozens of directions your clothing store may go. Consider other clothing retailers in your area and whether any demographic has been overlooked. You may find there is a market for plus-size women's clothing or a clothing store for men. Consider the financial statistics of people in your area. You can find information for your city online. A high-end boutique isn't likely to do well in a middle-class community, unless there is no competition and your clothing boutique is located near your wealthy customers.
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Select a high-visibility location for your retail store. If there is any part of your budget where you can splurge, it's the location. The extra money you pay in rent for a popular location will save you money in advertising and lost revenue from leasing a less-lucrative spot. According to Entrepreneur.com, your annual rent should not exceed five to six percent of your total annual sales.
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Compete by staying abreast of the latest trends and being one of the first in your town to stock hot items. Your local mall will likely carry something for just about everyone. For your business to succeed, you've got to give customers a reason to come to you. Focus on providing excellent and personalized customer service and a more intimate atmosphere.
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Subscribe to fashion magazines or online sites such as Style.com and Fashionising.com. If your budget allows, attend fashion trade shows each season.
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Find wholesale suppliers at trade shows or online. Buy your inventory to match the seasons. Purchase more during the back-to-school and Christmas season. Purchase fixtures, a cash wrap, fitting-room curtains, benches, mirrors, shelves, hangers, sales tags, mannequins, display tables and signage.
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Design your clothing store. Hire an interior designer or save money by doing it yourself. Learn how to merchandise and design your store by visiting other clothing stores or by enrolling in a merchandising class offered by your local art school. Create eye-catching displays for your store windows that pair seasonally relevant, hip clothes and accessories. Update displays frequently, at least once a month.
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Establish your store policies on: returns, customer satisfaction, employee expectations, accepted payment methods, pricing, layaway, damaged items, gift wrapping and operating hours. Implement a system for marking down clothes that aren't selling.
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Hire outgoing employees that you can trust to handle the money and service the customers. They should be able to offer clothing suggestions to customers based on the customer's needs.
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Tips & Warnings
You will need to apply for a business license and sales-tax permit and purchase liability insurance and worker's compensation insurance.
Consult an accountant to help you get your books in order. After the first tax season, consider doing the bookkeeping yourself to save on expenses.
You'll need to purchase a merchant account. Find a provider that will offer you other perks, such as an inventory tracking system, a markdown system and payroll management system.
Offer discount cards or store credit cards for loyal shoppers.
