How to Start a Not-for-Profit Business Selling Clothing

by Gail Cohen

Starting a nonprofit clothing business guarantees countless benefits. You and your volunteers will ensure that every garment you sell will help others, so start out right by fashioning a great game plan. Locate a venue. Put policies and systems into place that will make running the boutique effortless.

Delineate every aspect of the clothing business's legal arrangement. Establish funding, garment acquisition, staffing and accounting policies. Appoint one point person as liaison between the nonprofit and the clothing business if they're to be operated independently. File for a distinct tax ID reporting number if it's to be run independently.

Rent or arrange for a facility. Consider a church basement, property (such as a Veterans of Foreign Wars hall) or another type of permanent space, or set limited sales hours at a temporary location that's to be open on specific days of the week. Be sure your temporary setup includes onsite storage so you won't have to re-pack and re-rack clothing repeatedly. Ask zoning authorities whether your enterprise requires special licenses or permits to operate.

Solicit inventory donations. Invite donations of new or gently used clothing in accordance with business policies. Establish consignment guidelines (For example, clothing must be new or nearly new, freshly laundered or dry-cleaned and not damaged.) Contact manufacturers, wholesalers, distributors and retailers. Ask for garment donations and offer a tax credit letter so the fair market value of items they contribute can be deducted when they file their taxes. Set pricing and markup policies.

Buy or seek donations of clothing displays to obtain the fixtures on which you'll fold, hang and stack garments. Use industrial shelving for folded clothes. Find a carpenter willing to donate time to install clothing-hanging fixtures so items are nicely displayed during hours of operation. Look for donations of bags and boxes.

Set up a business account for the nonprofit clothing concern. Solicit help from an accountant or bookkeeper; ask him to help you through the process of setting up systems to record and track sales and purchases, prepare reports and produce statements. Use a computer with software or a manual accounting pad to collect these figures.

Publicize your nonprofit clothing business. Make fliers to announce shop hours and days. Spell out your mission on everything you print so the cause that inspired the launch of this clothing business is front and center. Post signs in conspicuous places so there's no misunderstanding about sales, return and donation policies.

Absolve your nonprofit from litigation with "we are not responsible for merchandise that's stolen or damaged" call-outs on everything. Manage the size of your nonprofit carefully and don't expand until you're certain you'll be able to manage the growth. Promote your nonprofit clothing business nonstop to build traffic and help your mission thrive.

Things Needed

  • Legal agreement
  • Facility
  • Policies
  • Merchandise
  • Accounting system
  • Display or racking units

About the Author

Based in Chicago, Gail Cohen has been a professional writer for more than 30 years. She has authored and co-authored 14 books and penned hundreds of articles in consumer and trade publications, including the Illinois-based "Daily Herald" newspaper. Her newest book, "The Christmas Quilt," was published in December 2011.

Photo Credits

  • The handcart with clothes and footwear on a white background image by terex from Fotolia.com