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Fashion and beautiful clothing have always been in demand, and if you have an eye for style, a boutique clothing business could be ideal for you. Rather than selling everyday garments, boutique businesses focus on specific garments, tastes, designs and customers. If you have a unique taste and can curate the perfect collection, you can certainly start a successful retail clothing business.
Clothing is one of the most popular retail sectors. Here are some surprising statistics:
Clothing boutiques earn over $20 billion in the U.S. every year
There are over 150,000 boutique clothing businesses in the U.S., employing over 250,000 people
Worldwide revenue for online clothing is expected to rise to over $700 billion by 2022
One of the biggest questions a boutique clothing entrepreneur will need to answer is whether to start a traditional, in-person boutique, an online boutique or a combination of the two. Each of these options has advantages and challenges.
It’s vital to decide on the approach you want to take. The advice we present in the rest of this guide can apply to either type of clothing boutique, so please bear in mind the type you want to start when applying it to your own circumstances.
Although it can be exciting to form a boutique clothing business, there will be significant demands on you as a small business owner. Here are some of the things you can expect.
Here are some of the typical tasks you’ll be performing for your boutique clothing business on a daily basis.
The following skills will be very useful in your role as a boutique clothing small business owner.
Remember, the ideas above are just a starting point, You can define and tweak exactly what type of boutique clothing business you want to run by conducting your own research. Before committing too much time, energy and money into your new retail clothing store, it’s important to test the marketplace.
Not every idea you have will make it through to becoming a boutique clothing business. There are all sorts of reasons to say “yes” or “no” to specific businesses, so think about what your strengths and weaknesses are so you can choose something you’d be great at.
You need to define how you’re going to run your boutique clothing business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight retail clothing business plan. It will help you get your thinking in order and show your commitment to your business.
You will also need to look at financial projections for your boutique clothing business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others?
Business plans do vary slightly, but they should all cover the following areas:
We’ve got the perfect guide to writing your business plan.
There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:
If you don’t choose to form a legal business entity for your clothing venture, you will be a sole proprietor by default. This won’t give you the legal protections you need, so we do not recommend this.
Similar to a sole proprietorship, if you go into business with someone else without forming a legal business entity, you will be treated as a partnership. This doesn’t give you limited liability protections, so we don’t recommend it for your boutique clothing business.
The Limited Liability Company (LLC) is ideal for most small retail clothing businesses. An LLC is easy and inexpensive to set up, and it has the least administrative requirements of any formal business entity.
This is a more complex type of business and isn't generally recommended for smaller organizations.
These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or boutique business owner will need.
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your boutique clothing business.
In most cases, our recommendation for a boutique business would be to create an LLC. We’ve got a complete guide to everything you need to do. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.
Once you've legally created your boutique clothing business, you’ll need to get some other things in place.
If you’re selling online, you can work from home or a shared working space, although you may need storage for garments. This is great as it reduces your office costs considerably. Don't forget that if you work from home, you can write off part of your utility and housing costs against your taxes.
If you’re selling in a traditional store, you’ll need to find the right location and pay for furniture, fixtures, utilities and everything else that goes into creating a desirable retail location.
For an online business, you’ll likely just need a computer, laptop, tablet or smartphone. For a brick and mortar business you’ll need shop fixtures, a cash register, furniture and much more.
Branding and marketing will be a huge part of your boutique clothing business. Naturally, you will need an awesome website, but you'll also need to get newsletters, digital ads, social media accounts and other channels in place. You’ll want to focus on visual marketing, so Instagram and Pinterest can both be excellent channels.
The right software and processes will make running your boutique clothing business much easier. See our list of the best apps and software at the end of this guide.
Depending on the type of business you’re running, you might be able to take care of everything yourself. As you grow, you can look into taking on another employee.
You will need a separate business bank account for your boutique clothing business, and you might also want to consider a business credit card. Additionally, you will need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile, we can even help you file your taxes.
Our Start a Business Checklist will get your boutique business going in the best possible way.
You will need to explore local, state and federal licenses and permits, and we can also help out with researching your business licensing needs.
Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. You will also probably be liable for sales and use tax.
As a rule of thumb, we recommend holding back around a third of your earnings to pay your taxes. We can also prepare and file your tax returns for you.
There are certain forms and legalities you need to follow to keep your boutique clothing business in good standing.
Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.
You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).
Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.
You will need to file your taxes once a year.
If applicable, you will need to make payroll and sales tax payments on a regular basis.
You will need to work with your accountant to prepare all the taxes you need to pay.
Most boutique clothing businesses should have comprehensive business insurance. There are various types.
Workers’ compensation insurance provides coverage for job-related illnesses, disabilities or injuries that affect employees. Regulations for this insurance vary from state to state. It typically covers areas like medical costs, loss of earnings, compensation and retraining.
This insurance protects your boutique clothing business from claims due to being sued. This may include injury to members of the public, property damage, personal liabilities, legal defense and more. It can help protect your business from financial penalties and bankruptcy. This type of insurance could be essential to your boutique clothing business if you run a physical store, since you'll have customers on your premises.
If you are working from home on the administration of your boutique clothing business or driving a vehicle for work, check whether your existing home and auto policies cover you for work use of your home or car. If not, you should either expand your policy so you’re covered or get dedicated business insurance.
Here are some really great online tools for managing your boutique clothing business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.
With a strong eye for style and good business acumen, you can start a successful retail clothing company. If you can find a great niche, understand your competitors and put together a solid business plan, you will have every chance for successStart your boutique clothing business with us, today!