Cheap Way to Start a Clothing Store

Make your clothing items look luxurious by setting up a well thought-out display.

Clothing stores can be expensive to start up. You can avoid going into debt by exploring affordable start-up options for a clothing store company. Used and consignment clothing stores are affordable options because you won't have to buy an expensive inventory. Locate a small storefront in an affordable area to lease. Start off small and do the work yourself. It may require working night and day, but you will be able to keep costs down while building a solid foundation for your business.

Things You'll Need

• Business plan
• Legal/tax documents
• Source of used clothing, consignors
• Storefront

Instructions

1. Research the market carefully to determine if a clothing store is a viable business opportunity in your area. Consider how you will compete with any existing competition. Write a detailed business plan to focus yourself throughout the start-up process. In the business plan, include a purpose or mission statement, description of your clothing store business, analysis of the market and competition, financial projections and legal documents, such as lease and consignment agreements.

2. Fill out and file a business registration form for the type of business that you would like to establish. You may want to consider a limited liability or corporation filing rather than a sole proprietorship since you are opening a retail business. File any other necessary forms with your local and state authorities.

3. Fill out and file tax registration forms at the state and federal levels as well as any other local forms that may be necessary. Consult an accountant with any questions. Set up a bookkeeping system. Retain all of your consignment agreements for your records.

4. Place advertisements in local papers and online classifieds seeking quality, used clothing for purchase or consignment. Develop a policy of what you will and won't accept. This will save you and potential sellers or consignors time by providing a standardized method for determining if the clothing will be accepted or not.

5. Work with a lawyer to create a consignment agreement. Have each consignor fill out an agreement. Create a folder for each consignor. Place a record sheet of all items that they are consigning, along with the signed agreement.

6. Acquire a small storefront, based on your projected budget and market research. Select a storefront in a more affordable area. Stock the storefront with the used and consigned clothing. Organize the clothing so that customers can easily find items. Rotate your inventory regularly to keep the store displays fresh.

7. Advertise your clothing store in local newspapers. Announce your store to the community. Run a special opening promotion.

Tips & Warnings

• Join your local chamber of commerce and take advantage of any networking and advertising possibilities they can offer.

• Place a strong emphasis on quality, gently used clothing for your store.

References

• Entrepreneur: How to Start a Clothing Store
• Power Home Biz: Starting a Retail Clothing Store
• Home Business Center: How to Start a Retail or Consignment Clothing Business 1-2-3

Resources

• Read this Article in Spanish
• Forbes: How to Set Up a Clothing Retailer -- Important Performance Metrics