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Getting Started

You have a dream. It involves sequins, beads and feathers. Or maybe leather, silk and shoe polish. A clothing boutique is a perfect way to monetize your stellar sense of fashion — but starting a business can be intimidating. If you need help turning mood boards into moolah, we’re here to help.

Read on for everything you need to know about how to start a clothing boutique and how Incfile can make it easier.

 

Decide What Type of Clothing Boutique You’ll Open

First, think big-picture. This is your blank slate — let’s start filling it to begin bringing your dream to life. Here are the first things to consider:

  • What products will you sell?

    From swimwear to streetwear, deciding on your product line will bring focus to your branding and marketing and make it easier to determine your target market.

  • Who will be your target market?

    Consider demographics, psychographics, lifestyle and buying habits. Create a buyer persona to visualize your ideal customer.

  • Who will be your competitors?

    What are they currently doing that’s working? Join online forums or communities on social media to see where people are shopping and why.

 

Consider the Startup Costs and Profitability

Your business idea is crystal clear. Now it’s time to think about funding. After all, we’d prefer to see the “rags to riches” cliche played out versus your business burning a hole in your proverbial pocket.

How Much Can You Make as a Clothing Boutique Owner?

The average salary of a boutique owner is $57,010–$72,160 per year, according to Glassdoor and ZipRecruiter. Both sources cite upper-end salaries well into the six figures, from $200,000 to $450,000 and higher. With the right business model, your clothing boutique can be a money-making machine.

How Much Does It Cost to Open a Clothing Boutique?

You can start an online clothing boutique for only a few hundred dollars in some cases. A brick-and-mortar shop could cost you from $50,000–$150,000 to start up. The cash you’ll need upfront will depend largely on the business model you choose.

 

Choose the Right Business Model

No, not that kind of model — we’re talking retail, not runways. Your clothing boutique’s business model will determine who manufactures your products and how they’re shipped. Here are four models to consider:

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    Dropshipping (ecommerce only)

    With dropshipping, you won’t need to have any inventory on hand. Rather, you’ll act as the middleman between your customer and a third party, which is the manufacturer or wholesaler of the clothing. You need less capital to get started since you don’t have money tied up in purchasing inventory, and the overhead is low since you won’t need a warehouse.

  •  

    Wholesale

    You purchase clothing and accessories from another company at wholesale prices. The products are then shipped to your shop, warehouse or home, and you hold on to the inventory until sold.

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    Private label

    Similar to wholesale, this method involves holding an inventory — however, you work directly with a manufacturer and sell the products under your own label versus another company’s brand.

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    Handcraft

    This option is harder to scale due to the time required to craft each individual garment. That being said, with the right target audience, you can charge a premium for handmade products that can’t be replicated anywhere else.

 

Locate Your Suppliers

If you decide to go with a wholesale or private label business model, you’ll need to invest some time researching suppliers. While it may be difficult to choose from a vast array of suppliers, asking the following questions can help make sure you enter a partnership you feel good about:

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    Does the supplier have any references? How do other businesses like working with them?

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    Will you have a dedicated sales rep? Are they responsive and helpful?

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    Is the supplier domestic or overseas? If overseas, what will shipping times look like?

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    Can you visit their warehouse or ask for samples? Are you able to physically check for quality?

 

Create Your Clothing Boutique Business Plan

Now that you’ve chosen a business model, you need to define how you’re going to run your clothing boutique, promote yourself and make a profit. Enter: Your business plan. It should cover the following:

  • 1

    An executive summary with the most important points from your business plan

  • 2

    Your goals and what you hope to achieve with your business

  • 3

    A description of your business, background information and context

  • 4

    A market analysis and likely demand

  • 5

    An overview of how your business is structures

  • 6

    Your business model

  • 7

    How you will market and sell your offerings

  • 8

    Financial projections, revenue and profitability

  • 9

    Appendices

Get started with our guide to writing a business plan.

 

Set Up Your Clothing Boutique Business Operations

It’s time to take the leap into setting up the logistics of your business. Below are the most important steps to tackle first:

Establish a Location

Even if your boutique is fully online, you’ll want a physical address for business purposes. Depending on any state restrictions, you can either get a P.O. Box, get a mailbox through the UPS store, use the address of a coworking space or get a virtual business address.

Choose a Name and Register Your Domain

Your clothing boutique’s business name has to be memorable and special. Use our name search tool to make sure yours is unique. Once you’ve decided on a name, purchase your website domain name before it gets snatched up!

Choose a Legal Business Structure

Choose the right business structure to set yourself up for success from the get-go.

  •  

    Sole proprietorship or partnership

    This won’t give you the legal protections you need, so we generally don’t recommend this option for retail entrepreneurs.

  •  

    Limited Liability Company (LLC)

    This is ideal for most small clothing boutiques. It’s easy and inexpensive to set up, and it has the least administrative requirements of any formal business entity.

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    S Corporation

    Short for small business chapter, this structure offers many tax advantages, legal protections and easy transfer of ownership.

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    C Corporation

    This is the largest and most complex type of business and is typically far more involved than what the average entrepreneur or boutique business owner will need.

Register for an EIN

An EIN, or Employer Identification Number, is a must-have when opening a business banking account or applying for a line of credit. You may also hear this referred to as a business tax ID number.

Open a Business Bank Account

Your boutique’s business bank account will help keep business-related finances separate from personal finances. You’ll also start building your business’s credit score, which will be important if you want to take out loans later.

Look into Necessary Permits and Licenses

You will need to explore local, state and federal licenses and permits, particularly ones that are required to sell products online. Our Business License Research Package can help you do the legwork.

Determine Your Marketing Strategies

If you’ve got a knack for social media, now’s your time to shine! Marketing will be a huge part of your boutique’s growth, so you’ll want to get creative on how you promote yourself. Think live fashion shows on Instagram or mood boards on Pinterest for upcoming events.

Select an Ecommerce Platform

You’ll spend a large portion of your day-to-day administrative tasks within your ecommerce platform, so choose wisely! Some of the most popular ones for clothing boutiques include:

  • Shopify
  • Magento
  • WooCommerce
  • BigCommerce
  • OpenCart
  • Big Cartel

Set Store Policies

Will you accept returns if an item doesn’t fit or if it’s damaged? How many days after receiving their items will the customer have to return it? Will return shipping be on their dime or yours? These are all things you'll want to decide and communicate clearly on your website to avoid confusion or upset customers.

Consider Business Insurance

Even if your store is fully online, business insurance is an important part of protecting yourself from liability claims related to products you sell — like if a toddler swallows a button, for example. Look into different types of business insurance for your boutique, including:

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    Workers’ compensation insurance

    If you plan on having employees, this protects your business from civil lawsuits from workers who become injured or ill on the job.

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    General liability insurance

    Nearly every business can benefit from this coverage, which protects against injuries and property damage resulting from your products.

 

Maintain Your Business

The hard work is done! Now that your business is up and running, you’ll need to keep an eye on a few things to ensure operations continue to run smoothly.

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    Pay estimated taxes quarterly, typically in April, June, September and January.

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    Pay payroll and sales taxes on a regular basis.

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    Renew business permits and licenses.

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    Renew domain name and web hosting.

With a myriad of resources at your fingertips, it’s never been easier to start your dream clothing boutique business. Your determination and good eye for style means you’ll be a trendy tycoon in no time. Take the first step with us today.

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