Budding entrepreneurs with an interest in fashion can find a worthwhile career in opening a clothing boutique. Running your own clothing store allows you to be your own boss and stay on top of the latest trends in the fashion industry while earning a healthy profit in the meantime.
However, getting a successful clothing store up and running won’t be easy: launching a business requires a great deal of planning and forethought. Whether you choose to open an online clothing boutique or a brick-and-mortar store, expect to put in a lot of hours before achieving success.
In this article, we’ll discuss what it takes to open a successful clothing boutique and go through each vital step in the process.
Is the retail apparel business right for you?
Building a successful clothing boutique takes a certain breed, and not everyone is cut out of the task. Here are some qualities that make someone a good fit to open their own clothing boutique.
You have a passion for fashion.
Providing the best products for your customers requires the owner of a clothing boutique to pay close attention to the latest fashion trends, such as up and coming brand names and popular clothing lines. Those with an avid interest in fashion should have no trouble with this part of the gig.
You have experience in sales.
A major aspect of running a clothing boutique is recommending items that customers can pull off and look good wearing, which means being able to determine a customer’s size and taste based on appearances, alone. Additionally, you should be able to effectively convince customers that they look great in a dress or blouse that they try on so that they’ll actually buy the item. This should be second nature for those with years of experience in clothing sales.
Clothing boutique business statistics at-a-glance
- As of 2020, there are over 74,000 clothing boutiques in the United States.
- The Southeast is the U.S. region with the largest share of clothing boutiques.
- The clothing boutique industry consists mainly of independent businesses and no company has a higher than 5% share of the market.
- While little growth is anticipated for brick-and-mortar clothing boutiques in the near future, the online clothing industry should continue to grow significantly, with worldwide e-commerce fashion industry revenue expected to hit $713 billion by 2022.
Starting a clothing boutique business step-by-step
1. Refine your business model
Writing out a complete business plan that covers every aspect of your business while detailing financial goals is an essential step before you open your clothing boutique. A comprehensive business plan will address the following considerations:
- Decide whether to open an online clothing store or a brick-and-mortar business. While opening a traditional clothing boutique may be a more fulfilling endeavor, starting an online business has cheaper start-up costs and a higher potential profit margin.
In general, the retail apparel industry is moving towards e-commerce, however, since customers like to try items on before they buy, there will always be a place for traditional brick-and-mortar shops. Remember, you can always sell items online in addition to running a traditional fashion boutique.
- Choose your retail specialty. Will you be specializing in a specific type of apparel, such as lingerie, handbags, jewelry, or footwear? DO you plan on offering high-end, mid-range, or budget apparel? Do market research to determine which business model offers a high chance of success in your area.
- Choose a business name. Give a lot of thought to your business name. It should be hip, memorable, and represent your brand well.
- Determine your target market. Figuring out your ideal customers will help with marketing and deciding which inventory to stock.
- Calculate operating costs. Startup costs can vary considerably depending on whether you open an online or physical business, the quality of items you decide to sell, or the area in which you open up shop. Draft up a budget sheet so you can know what costs to expect to cover, and if necessary, hire a professional for assistance.
2. Acquire funding, choose a business entity, register your business, and obtain federal and state tax ID numbers
Refer to our How to Start a Business Guide for instructions on how to complete these essential steps.
3. Select a location
If you are opening an online business you can skip this step. However, those looking to open a brick-and-mortar clothing boutique must put a lot of thought into where they choose to open a business.
Your storefront should be located in a heavily trafficked commercial area that guarantees plenty of walk-in customers, but not too close to a competing boutique. However, leasing a commercial property in a central location can be expensive, so try to balance these concerns as best as possible.
4. Obtain the necessary licenses and permits
The necessary certifications for opening a clothing boutique will vary from location to location, but here are a couple that may be necessary to obtain.
- Business license – Many municipalities require small business owners to obtain a local business license before opening a shop. Check with local officials for specific requirements.
- Reseller License – Certain states require a retail business owner to acquire a reseller license, also known as a resale license or reseller permit, in order to buy items from a wholesale distributor and sell them in a shop.
5. Buy insurance coverage
Insurance coverage is an essential means of protection for any business. In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level.
Here are the forms of insurance you should consider for your clothing boutique:
Required forms of insurance for all business with employees:
- Workers’ compensation: Covers medical costs and disability benefits if an employee is injured or becomes ill on the job.
- Unemployment insurance: Provides benefits to workers after a loss of job through no personal fault.
Recommended forms of insurance for clothing boutiques:
- Professional liability insurance: Covers losses as a result of property damage, medical expenses, libel, slander, and negligence claims.
- Commercial property insurance: Covers property damage to business-owned properties and possessions as a result of fire, theft, or storm.
- Disability insurance: Provides short-term benefits for employees suffering an illness or injury. Required in certain states such as California, New York, and Hawaii.
6. Contact local suppliers and manufacturers
Stocking items produced by local manufacturers and designers will set your business apart from others. Therefore, it’s a good idea to reach out to nearby clothing industry professionals to see if they’ll participate in stocking your store.
Talking to a handful of manufacturers will also allow you to get quotes on wholesale prices and aid you in setting prices for merchandise.
7. Purchase equipment and stock inventory
Since the merchandise you sell will define your boutique, this is one of the most important steps in getting a shop off the ground.
- Shop equipment – Buy at least one cash register and card reader for credit card purchases. Other essential items include security cameras, mirrors, a sound system, a safe, rolling shutters, and cleaning equipment.
- Inventory – Purchasing inventory is a major expense for a retailer, and it can be hard to know which items to stock or how much merchandise to keep on hand, initially. At the outset, bulk items can be purchased by visiting a trade show, from a manufacturer, or a wholesale distributor. As time goes on, you’ll have a better idea of how much inventory to hold onto at one time, and which items sell the best.
8. Hire employees
Unless you are starting an online boutique, a clothing shop will require at least one additional full-time employee to run the shop when you aren’t around, and one part-time employee for sales and other duties.
Because employees are expensive, begin with a modest operation, and hire more workers as they become necessary.
9. Market your clothing boutique business
No clothing business can thrive without local advertisements and a well-established online presence. Here are the key steps for promoting your clothing boutique, and a few tools for managing your fashion label:
- Create a website. Register a domain name for a company website (You can use domain.com, Bluehost, GoDaddy.com, or Namecheap.com). Hire a web designer to develop the website (or do it yourself). Be sure to include detailed contact information on the site.
- Open social media accounts. Register accounts on the popular social media services (Twitter, Facebook, Instagram)
- Register a Google profile. This will allow you to add pictures of your business, respond to positive customer reviews, and address customer concerns.
- Respond to online customer feedback. Register accounts on business review platforms such as Yelp and TripAdvisor. This will allow you to write thank-you notes in response to glowing reviews and address negative reviews.
- Take out ads on billboards and in local publications. It still pays to increase visibility by buying ads in local newspapers and on highway billboards.
Clothing boutique business resources
- The Boutique Hub – An organization for clothing boutique owners that provides training materials and other resources for those in the industry. The Boutique Hub can also connect you to local wholesalers and offer guidance on how to operate your business. Check the site for information on upcoming events and industry news.
- Buywholesaleclothing.org – An extensive list of clothing distributors based in the United States. The site also features a fashion blog and advice on dropshipping.
- Tasha Apparel – A wholesale clothing distributor that offers a wide range of trendy clothing items and accessories that clothing boutique owners can stock their stores with. Orders of over $300 are eligible for free shipping.