So, you've decided to launch your own clothing store business. Style, dream and vision are all a given in this industry – but what about the cost? Determining the scope of a shop takes time and intention. Will the shop be online or will it have a brick and mortar location? The answer will define what is needed in terms of capital. Startup funds need to be a priority when turning a great idea into a sustainable reality.
TL;DR (Too Long; Didn't Read)
The average small clothing business costs $100,000 to open, but there are many variables that will affect this cost.
Write a Business Plan
A business plan will chart the way forward. It doesn't have to be very formal. It can just be for internal use, to help focus ideas and stay on track. In a business plan, Profitable Venture suggests writing about the concept of your business, including a description of the company, a vision statement and mission, where this company will be located and if, online, the regions that will be included for shipping. Add product offerings, a SWOT analysis, marketing and sales strategies, pricing and profit margins, publicity and advertising strategy and an overall budget. Also list any revenue streams that will fund this new venture.
Set Up Your Company
Starting a company means legally establishing a business organization. This always will include fees and paperwork. Consider consulting an
Know Your Profit Margin
Depending on the industry segment, retail markup typically runs between 30 to 40 percent. Not surprisingly, luxury and handmade items generally allow for higher markups. Basic and essential products may have smaller profit margins. Consider this when you are choosing your inventory.
Choose Your Inventory
Know what type of clothing the shop will be selling. Will this boutique have strictly vintage clothing? Would a buy, sell or trade model work best
Be Aware of All the Costs
While the bulk of inventory will be
Other costs to keep in mind include a point of sale (POS) system that can cost up to $2,000, or a cash register. There's also logo design, website maintenance and hosting (from $30 to $200 a month), a price gun, shopping bags, display cases and shelving, marketing and advertising, clothing racks, mirrors, mannequins,
No matter what type of store you are opening, expect to have to spend some money
Liz Gold has been published in a variety of capacities writing about everything from Kennebunkport and southern Maine municipal government, art and cultural events, to cloud technology and business transformation. Her experience extends to both corporate and freelance; she's a former Senior Editor at the B2B publication Accounting Today, writing about public accounting firms with a specialization in diversity, technology, best practices, and business development. During her tenure, she was also co-founder and editor of AccountingTomorrow, a blog focused on intergenerational workplace issues that is still thriving today. Most recently, Liz has been writing about accountants working in the cannabis industry on CPA Trendlines and reporting on cannabis trends for Southern Oregon Good Herb magazine in Oregon.