Anyone that steps into a mall in the middle of a large city may feel that the apparel industry is crowded. The truth is, there is always room for another apparel store, particularly if you offer consumers something that’s unique and new to your area. To truly have a leg up, stay keenly aware of the trends in your local market, be aware of what’s happening in your nearby mall, understand how pop culture (including movies, books, and games) influences fashion choices, and know what the demographics in your area demand.
One more thing: you must really love the clothing business to start a small business in this industry. Like the restaurant industry (and, frankly, any other kind of small business), there are risks. Seeing success in the retail clothing industry requires motivation, hard work, and a solid plan of action:
File Your Legal Structure
Look to the Small Business Administration’s website to determine which is the most appropriate legal structure for your business. You can incorporate your business online yourself, or you can work with a lawyer to make sure you take all the necessary steps. They’ll help you obtain a tax ID number, and can advise on which business licenses you may need. You’ll also want to look into setting up any necessary insurance.
Put Together Your Business Plan
What kind of clothing will you sell in your store? Evaluate whether your market will take to a new men’s, women’s or children’s clothing store, or whether you should sell a combination of these. You can choose a specialty, such as vintage clothing for women, maternity, sportswear and accessories, or some other category. Having to spell out these details is necessary for a comprehensive business plan, but you’ll also want to determine your start-up costs, evaluate the local market, and develop a sales and marketing plan.
Starting a clothing store is no inexpensive feat. In the case of fashion, you’ll need to spend money to make money. It’s likely you’ll need to borrow money to fund your business through a small business bank loan. You may consider working in the fashion industry or in a clothing store to not only learn the ropes of the industry, but also save some money to fund your company. It’s important not to underestimate the amount of financial capital you’ll need to get started. You’ll need to purchase merchandise, pay store employees, buy marketing materials, furnish the store with fixtures and lighting, and other expenses.
Find Your Storefront
Finding the right location is one of the most important decisions you’ll have to make when opening a clothing store. Not only do you need to commit to a location in a specific state, in a specific town, but then you need to consider the various neighborhoods and streets which will bring you foot traffic and a large consumer base interested in (and able to afford) your merchandise.
Once you’ve narrowed down your location options, you’ll need find the right building. Consider storefronts in strip malls or in stand-alone locations, or look into mall leases if it’s suitable for your type of clothing store. You’ll have to keep in mind your inventory numbers: How much square footage will you need? What can you afford, and what will it cost to fill your store with merchandise?
Speaking of inventory, you’ll want to get the process moving to purchase merchandise from designers or manufacturers at the same time that you settle on a location. To start, you’ll need to get in touch with vendors who carry the clothing that you want to sell. A trade show is one of the best places to buy wholesale merchandise for your store. At trade shows, you’ll be able to connect with suppliers and see first-hand their product offerings.
When making orders, consider the amount you’ll need when you first open your store, plus the inventory you’ll need to regularly replace the items that sell. Don’t forget seasonal trends, plus those new styles and brands that become popular due to pop culture influence. You’ll need to have a diverse mix of clothing, while understanding that you won’t necessarily be able to satisfy everyone that walks through your door.
Throughout the process, research the best way to set your prices based on the merchandise you’re selling. You’ll need to determine your mark-up amount, understand effective pricing techniques for your type of store, and know how to discount merchandise effectively.
Anticipate any problems or questions that might arise when it comes to employees, store hours, customer service, loss prevention, damages, returns, and other day-to-day operations. Spend some time considering best practices from other established stores, and distribute these procedures to all new employees.
Market Your Store
When you’re ready to open your doors, don’t be afraid to tell everyone. From friends and family to those you’re connected with on social media, be sure you have a message to share with them and reasons they should shop at your new store. You might consider having an open house with special discounts, giveaways, and other “little extras.” Put your best foot forward and put a particular emphasis on amazing customer service. You may consider advertising your clothing store in your local newspaper or radio, on Facebook, or in your local lifestyle magazine.
Keep the momentum going by sponsoring fashion shows, sample sales, trunk shows, holiday promotions and other special days to celebrate your customers and give them new, exciting reasons to visit your store.
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