What is Required to Open a Clothing Retail Boutique?
If you have decided that now is the time to open a clothing retail boutique, first of all; congratulations! Embarking on any new business venture is exciting, to say the least.
However, it also requires a lot of careful planning. While we do not want to put doubt in your mind, statistics show that 90 percent of startups fail. One of the reasons for this is that businesses underestimate the costs that are entailed and do not plan effectively.
With that being said, in this blog post, we are going to help you prepare for the opening of your new retail clothing boutique by explaining what is going to be required to get started.
Understanding what is needed to open a retail boutique
If you are opening a boutique, one of the first questions you will have is how much does it cost to open a boutique? To answer this question, we need to understand the different things you need to get your business up and running. So, let’s take a look:
Rent and utilities
There is only one place to begin if you are going to be setting up a store, and this is with the commercial space itself. The cost that you will need to pay differs based on the location.
Setting up a clothing store in New York won’t be the same as setting one up in Rayleigh, NC. Spend some time researching the cost of rentals in the area to get a better understanding.
Needless to say, costs are typically a lot lower outside of the major cities. At the same time, you need a location that is going to put you in front of as many customers as possible, so it is very much a balancing act.
Another option you may want to consider is opening up a pop-up shop in a temporary location. This will mean you can test out the location before you commit to leasing a store on a long-term basis.
Not only do you need to consider the rental costs but you also need to factor in the cost of utilities. In the United States, the average cost per square foot for gas is $0.29 and $1.47 for electricity. Of course, these figures are changing all of the time.
Other costs that you need to account for include Internet bills, phone expenses, sewer charges, and water charges.
Insurance, permits, and licensing
Before you open the doors to your retail store, you need to determine what sort of legal entity you are going to establish. Your decision is important because it will impact the insurance you need and the taxes you pay.
In the United States, the most common types of entities are as follows:
- Limited Liability Partnership
- Limited Liability Company
- Sole Proprietorship
You may want to seek legal help to assist you with making your decision. In fact, a lot of people need legal assistance when starting a business. If this applies, make sure you factor these costs in as well.
Depending on the sort of products you are going to be selling and your location, you may need licensing for your clothing store.
Some of the things you are going to need to file for include the following:
- A Certificate of Occupancy for your store
- A Seller’s Permit
- A Resale Certificate if you’re not selling your own products
- Local and Provincial/State licenses
- An Employer Identification Number (EIN)
Costs for all of the above differ depending on where your store is based. This is why you should browse the government website for your province or state to get a better understanding.
What about insurance? Some insurance policies are mandatory, such as insurance for personal injuries, however, there are some optional policies that you may want to consider.
Some of the main insurance options for retail clothing stores are as follows:
- Workers’ Compensation Insurance
- Key Person Insurance
- Health Insurance
- Business Interruption Insurance
- Liability Insurance
- Property Insuranced
Your retail store is not going to run on its own, and it is certainly greater than a one-person job. Consequently, you need to find the right staff.
Of course, the number of employees you need depends on the size of your business and also how you intend to operate. For example, are you going to have more than one register open at a time?
Some of the different types of employees you may want to consider hiring include the likes of a store manager, assistant store manager, and retail sales associate.
It is a good idea to have some sort of employee management tool in place. Not only will this enable you to track the performance and productivity of your staff members but you will be able to efficiently forecast costs and manage employee expenses as well.
Your initial inventory
One of your biggest and most vital expenses is your initial inventory. Estimates can be simple or complicated, depending on what you are going to be stocking.
A good place to start is by asking yourself some key questions. Think about the sort of product lines you are going to stock. How many items of each product line are you going to need?
Then, ask yourself what the manufacturer’s suggested retail price for each of these items is going to be?
When you research different manufacturers and wholesalers, you may find that their pricing is not the most transparent until you have signed a contract.
We would advise using an estimated markup to back into the rates you will probably see from your distributors if you do not know the exact prices of the items you want right now.
So, for example, if there is a product you typically see retailed at $40, you can assume you will be able to purchase this for $30 if there is a margin of 25 percent.
Marketing your business
Of course, you are going to need to spend time and money on marketing your business. After all, you want to make sure that people are aware of your store so that they pay you a visit and make purchases.
There are many different forms of marketing that you can make the most of today, so it is really about understanding your demographic and which marketing techniques are likely to deliver the highest ROI.
Branding and logo design
Of course, it all begins with your branding and the design of your logo. Establishing a strong brand is imperative for any business in terms of their performance over the long term.
A professional logo can help to set you aside from the competition. A professional branding agency can assist with this, as well as your brand’s message and positioning.
Signage for your store
If you are going to open a new retail clothing boutique, you need to have premium quality, stylish signage, which is on point for your brand.
After all, your signage is what will capture attention, and this can be the difference between someone walking past your store and going inside.
Retail signage can differ in price quite considerably, depending on the materials used and the size of the sign.
It is important to recognize that the location of your store may dictate the type of exterior sign you are able to have.
For example, some strip malls have requirements in place regarding exterior signage, requiring every store to have the same size and style for a more uniform look.
Therefore, make sure you check out the terms and conditions for the commercial space you are renting before you go and have signage made.
Getting the word out on social media
Social media marketing is great for businesses because it enables you to get closer to your customers than you ever will have been able to before.
When you are marketing on social media, consistency is key. You can use social media tools that enable you to schedule posts, making this a lot easier.
Aside from this, it is important to realize that social media is all about making genuine and strong connections with your customers.
You cannot simply post endless strings of promotional messages, pointing to products on your website. Instead, you need to work on building genuine connections, as this is how loyal customers are formed.
Do not be afraid to show off some personality on social media either. This is why it is typically a good idea to have one person who manages all of your social media accounts.
Final words on opening a clothing retail boutique
So there you have it: everything you need to know about opening your own retail clothing boutique.
We hope that the information that we have provided you with above has helped you to get a better understanding of what you need to get started if this is the sort of business you are interested in establishing.