Think big at first. Do you want to appeal to men or women? Then get more specific. Think about what ages, professions, and styles you want to appeal to. To start, go by what you know. If you worked in a store that sold suits to businesspeople, then you already know that market. Consider entering a field you have experience in like this. Consider where you might make the most money. Business suits might not be in high demand in a small town. But you may get a lot of tourists in the summer. In this case, it may be better to open a store geared to tourists.
Don’t locate yourself too close to identical stores. If there are a lot of other small clothing stores in the location you’re looking, this market may be too saturated. Consider finding a different location. If you’re marketing to tourists, for example, then locate your store near the main attraction areas. [6] X Expert Source Art LewinEntrepreneur Expert Interview. 11 June 2021. For good foot traffic, open the store near restaurants and coffee shops. Places where people visit often can bring in a lot of window shoppers. Find out what the rent is in every area you look. This will be a big expense, so don’t overlook it in the planning stage.
One good angle is carrying brands made by local manufacturers. This gives a much different flavor to your store than someone could get at a large retailer. Your town may have a lot of off-brand boutique stores, but perhaps they lack a maternity store. This could be where you make your niche.
Have emergency savings to cover 6 months of living expenses if you have to find a new job. Remember that clothing stores usually have smaller profit margins than other businesses. Get into this because you love the industry and want to work with people. This passion will help you deal with below-average profits.
Common items for operating costs are rent, utilities, insurance, and phone/internet connections. If you take out loans, paying them back is also a fixed cost. Common advice is to keep your rent about 6% of your yearly sales. Keep this in mind when you add up your costs. If rent is $2,000 per month, that’s $24,000 per year. That means you’d need about $400,000 in sales to meet this recommendation. If you can’t project sales that high, consider finding cheaper rent.
Some other variable costs include advertising and marketing expenses, since you technically don’t have to do these things to stay open. Add up your fixed and variable costs to get your breakeven price, meaning the amount you have to make each month just to cover your expenses.
Start by describing your business concisely. What will you sell and who is your target audience? Then outline how you will fit into the current market. Explain the research that you’ve done and how you’ll set yourself apart from competitors. Finally, outline your total costs, both fixed and variable. Then note how much financing you’ll need to get started.
The most common entities are a Limited Liability Company (LLC) and corporation. Most small businesses are LLCs because they usually don’t involve a lot of people. File for a business license in the state you’re operating in. If you don’t want to handle the paperwork yourself, you can hire a lawyer or other business to do the work for you.
The amount of the loan depends on your total costs. Experts recommend having 6-12 months of expenses on hand when you start up, because it will take several months to start bringing in money. Typical amounts for opening a small clothing store range from a low of $50,000 to over $200,000, or even more for larger stores. It’s better to have more cash on hand than not enough. Most small business fail within their first year because they don’t have enough capital.
Consider buying items in bulk to save costs. However, don’t order more than you think you can sell. If you sink all your startup money into merchandise right away, you might not be able to pay your other bills. Try contacting manufacturers directly rather than wholesalers. You might save money by buying directly from manufactures. Trade shows are also good places to pick up cheap wholesale items.
If you don’t have room in your store for locals to stock their items all the time, consider doing a monthly event for local manufacturers. Set up a tent in your parking lot and let them come showcase their products, for example.
Have at least one trusted employee who can run the store when you’re not there. You never know when you’ll have an emergency or get sick, so someone should know as much as you know about running the store. Remember that each employee you hire is another added expense. Only hire people you need. If work is irregular, consider hiring seasonal employees to save money. If you run a tourist shop that is only active in the summer, you don’t need many employees in the winter months.
Offer special sales on opening day to give everyone a sample of what you have to offer. Contact local media sources to come cover the event. This could give you some free advertising. Invite the mayor or other local politicians to bring more attention to the event.
Since your business has a physical location, set the ads to target people living 5-10 miles from you. Advertising to people 100 miles away will waste your ad budget. Update all your social media sites regularly. If you haven’t posted on Facebook in 6 months, people may think your business closed down. Aim for at least 1 post per week on each of your accounts. Also make any major announcements, like sales, on all your accounts and website. Remember that advertising still costs money. Work these ads into your budget to avoid going over costs.
Always bring plenty of business cards when you attend these events. Pass them out to as many people as you can. Check with your local chamber of commerce to find a list of upcoming business events. Attend as many as you can. Don’t leave the store unattended or closed when you attend events. Leave your best employee to run the store while you’re gone.
Stay on top of your online sales. If you get a reputation for poor service, you could get banned from these sites. Include links to your online store on all your social media sites. Remember that all online stores have fees associated with them. Find out all the fees you’ll pay and price your items accordingly so you won’t lose money.
