How to Start a Hat and Cap Business

by Sam Williams; Updated September 26, 2017
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Hats can be worn for protection against the elements, for fashion or to cover up a bad hair day. Hats and caps are a popular accessory to accent outfits and to make a personal fashion statement. Become a part of the fashion industry and start your own hat business. You can start a retail store that sells others’ hats or design your own.

Items you will need

  • Business license
  • Retail space
  • Website
  • Hats
  • Hat racks

Start a Business that Sells Hats

Step 1

Find a niche in the market. Malls across the country already have stores that strictly sell hats as well as department stores and sports-apparel stores that sell hats. Research the market. Visit these stores and discover a niche in the market that is under-served.

Step 2

Register for sales and use tax through your state department of revenue. It may be required by your state to collect tax as well, as it exempts you from paying taxes on wholesale purchase. Apply for the appropriate business license for sole proprietorship if you are the only owner, partnership if you are going into business with someone else, limited liability company if you want to reduce your personal responsibility, or corporation to create the business as a completely separate entity from you.

Step 3

Seek venture capital to help pay for retail store lease, hat and cap inventory, and to pay employees. Save your own money. In a Huffington Post article, bestselling author Rick Smith writes, “Live off your current job as long as possible. There is no reason you cannot explore and experiment through your entire first year of launching a new business while holding down another full time job.”

Step 4

Hunt for retail space to lease. Get applications, rental rates and traffic projections from malls. Request information on kiosk rental if you want to start small and build from there. Find empty lots in shopping plazas. Hire a Web designer to create a website to sell hats online.

Step 5

Find hat and cap wholesale distributors. Ask different retailers who their suppliers are. Get recommendations. If you want to create your own hats, buy materials, sewing machines, and scissors to do them at home. Sketch out your designs and send them to an overseas manufacturer.

Step 6

Get insurance to cover losses in the event someone steals from your store. Cover yourself from the damages of lawsuits by getting business liability insurance.

Step 7

Post an ad in the classified section of the city newspaper to find employees. Purchase the required workers compensation insurance if your state requires it. Request that they have knowledge of headwear and accessories.

Step 8

Order your first batch of hats from your distributor. Buy hat racks and display cases for your store. Purchase dummy heads to sport your caps in the store.

Step 9

Start marketing through local television ads and newspaper ads a month before your store opens. Highlight the best benefits of wearing your hats. In "The Young Entrepreneur's Guide to Starting and Running a Business" Steve Mariotti explains it's important to sell benefits. As an example, he says a hat seller could “sell hats that last long, are washable, fold without wrinkles and come in many great colors.”

References

Resources

  • Fabulous Felt Hats: Dazzling Designs from Handmade Felt; Chad Alice Hagen; 2005

About the Author

Sam Williams has been a marketing specialist and ad writer since 1995. He has been published in magazines such as "Reaching Out" and "Spa Search." He served in various sales and marketing positions with major corporations such as American Express, Home Depot and Wells Fargo. Williams studied English at Morehouse College.

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