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Home Business Basics Starting a Business
How to Start a Clothing
Store
Updated Apr 14, 2023
How to start a clothing store
Dave Thomas
Community Member at business.com
Anyone who 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 clothing store, particularly if you
offer consumers something unique and new to
your area.
With e-commerce booming, setting up an
online store is also a viable option to make
your dreams of running a clothing business
come true. However, success in the retail
clothing industry requires motivation, hard
work and a solid action plan.
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How to start a clothing
store
Follow these 11 steps to turn your retail
business idea into a successful e-commerce or
brick-and-mortar clothing store.
1. Find a business niche for your
clothing store.
Figuring out your niche is an essential process
of starting any business. You want to provide a
product or service that connects with your
target audience’s wants and needs.
For example, what type of clothing will you sell
in your store? Evaluate whether your market
will respond to a new men’s, women’s or
children’s clothing store, or a combination of
these offerings.
Then you can choose a specialty, such as
vintage clothing for women, boutique items,
maternity clothing, sportswear or accessories.
You can even create your own clothing brand
as a fashion designer.
2. Identify the target audience for
your clothing store.
Identifying your target audience goes hand in
hand with finding your business niche. You
must identify who will purchase your clothes.
What type of potential customer are you
targeting, and what clothing would they buy?
Do you want to target those looking for a high-
end fashion brand, or to those looking for
more affordable clothing?
Identifying your target audience will help you
make these choices and narrow your brand
identity.
Tip
To pinpoint your brand’s target audience,
build customer personas that include
demographics like age, income level,
concerns, where they spend time online
and what kind of content they like.
3. Perform a competitive analysis
for your clothing store.
A competitive analysis assesses your current or
potential business competitors. To perform a
competitive analysis, you must identify the
other companies in your market that currently
offer a similar product and then analyze how
their products are positioned.
The results of a competitive analysis help you
learn about current market trends, product
and service pricing, market saturation,
industry best practices, market gaps, and
business opportunities. Although a
competitive analysis is necessary when you
start a business, you should also routinely
perform them throughout your company’s
lifecycle to keep your business competitive.
4. Write a business plan for your
clothing store.
Although it may not always be legally required,
don’t skip writing a business plan. Every
owner should create a business plan for their
company. It serves as the blueprint of your
business and helps you see the complete
picture of your company’s mission, vision and
feasibility.
Did You Know?
To encapsulate your company’s mission,
write a mission statement summarizing
your business’s purpose, values and
objectives.
5. File a legal structure for your
clothing store.
Look to the U.S. Small Business
Administration (SBA)’s website to determine
the most appropriate legal structure for your
business You can incorporate your business
online or work with a lawyer to ensure you
take all the necessary steps.
An expert can help you obtain a tax ID number
and advise you on the business licenses you
need. You will also want to obtain the
appropriate business insurance.
6. Secure financing for your
clothing store.
The costs of starting an online business are
often reasonable. However, starting a clothing
store — online or offline — can be pricey. In
fashion, you must spend money to make
money.
You’ll likely need to choose a business loan to
fund your business. Consider working in the
fashion industry or at a clothing store to learn
the ropes of the industry and save money to
fund your company.
Don’t underestimate the financial capital you’ll
need to get started. You must purchase
merchandise, pay employees, buy marketing
materials, and furnish the store with fixtures
and lighting, to name just a few expenses.
FYI
Check out our reviews of the best business
loans for small businesses to compare
lenders, borrowing costs, loan terms and
collateral needs.
7. Find a storefront for your
clothing store.
If you’re starting a brick-and-mortar clothing
store, location is one of your most vital
decisions. You must commit to a storefront in
a specific town and state and consider the
neighborhoods and streets that will bring foot
traffic and a large consumer base interested in
(and able to afford) your merchandise.
Once you’ve narrowed your location options,
you must find the right building. Consider
storefronts in strip malls and standalone
locations, or look into mall leases if they suit
your type of clothing store.
You must keep inventory numbers in mind and
consider the following questions:
How much square footage will you need?
What can you afford?
What will it cost to fill your store with
merchandise?
8. Set up your online clothing
store.
Whether or not you’re opening a brick-and-
mortar store, you will also want to create an
online clothing store to sell your items. If you
use e-commerce exclusively to sell your
merchandise, getting this step right is even
more imperative.
You can build an e-commerce website yourself
or hire someone to handle the web design
process. Many startups and small businesses
turn to the best website builders and design
services for help developing, building and
maintaining e-commerce websites. It’s crucial
to find a platform that’s affordable and easy to
use.
Some companies offer retail-specific web
design templates, which can simplify the e-
commerce store-building process. Look for a
solution that supports your current product
quantity and can scale with your business as
you grow.
Tip
Ensure you create a mobile-friendly
website so it’s easy for customers to view,
use and navigate on a smartphone or
tablet.
9. Purchase and price your
clothing store inventory.
You must purchase merchandise from
designers or manufacturers to fill your
clothing store. Consider the following tips:
Visit trade shows to connect with
vendors. A trade show is an excellent
place to buy wholesale merchandise for
your clothing company. You can connect
with suppliers at trade shows and see
their product offerings firsthand.
Carefully consider inventory types
and amounts. When ordering
merchandise, consider the amount of
inventory you’ll need when opening your
store, plus the inventory you’ll need to
replace the items that sell regularly. Don’t
forget seasonal trends and new styles and
brands that become popular from pop
culture influences. Include a diverse mix
of clothing while understanding that you
can’t necessarily satisfy everyone who
walks through your door.
Conduct research to price products
properly. Research the best way to set
prices based on your merchandise. You
must determine your markup amount,
understand effective pricing techniques
for your store type, and know how to
discount merchandise effectively.
10. Establish policies for your
clothing store.
Anticipate problems or questions concerning
employees, store hours, customer service, loss
prevention, damages, returns and other day-
to-day operations for your clothing store.
Consider best practices from other established
stores and distribute materials explaining
these procedures to all new employees (if you
hire any).
11. Market your clothing store.
When you’re ready to open your doors
(physically or virtually), share the news with
everyone, including friends, family and social
media connections. Create a marketing plan
focusing on your store’s unique aspects and
what your target customers will gain from
shopping with you.
Consider the following marketing tips to get
started:
Host an open house. Hold an open
house with special discounts, giveaways
and other perks. Put your best foot
forward, and emphasize your excellent
customer service to build the best brand
image possible.
Create social media marketing
campaigns. Take advantage of the
power of social media marketing. Build
your branding and marketing strategy
around platforms like Facebook,
Instagram, Twitter and YouTube to stay
connected to your target market. When
posting on social media, use the right
image strategies for each platform.
Consider physical advertising. You
may want to incorporate physical
advertising into your marketing plan to
improve your local marketing strategy.
For example, advertise your clothing store
in local newspapers, lifestyle
magazines,or radio stations.
Did You Know?
Keep the momentum going by offering
promo codes and holiday promotions and
sponsoring fashion shows, sample sales,
trunk shows, and other events.
Pros and cons of starting
a clothing store
Like any business, starting a clothing store can
bring enormous benefits and significant
challenges.
The pros of starting a clothing store include
the following:
A clothing store is easy to scale.
Successful clothing stores can be easily
scaled when you’re ready to open new
locations.
A clothing store is marketable. If
your clothing store has inventory that
carries your logo, you can gain free
marketing from customers wearing your
merchandise. Word-of-mouth marketing
can benefit your store if you carry
affordable, unique and size-inclusive
fashion.
A clothing store has fast product
turnover. Although you may find it
challenging to switch out inventory as
seasons change, you always get a new
chance to succeed. For example, if your
spring and summer collections didn’t sell
well, your fall and winter inventory could
produce enough profit to compensate for
earlier lost sales.
You can maximize clothing store
sales. Every time you have a sale, you
have an opportunity to increase your
revenue. Once you have a handle on your
average sales volume, you can schedule
sales to solve cash flow problems.
The cons of starting a clothing store include
the following:
A clothing store must follow the
trends. Clothing trends last six months
maximum. You must consistently
liquidate your inventory as soon as it
comes in to make the most profit. Excess
inventory can cut into profits and is time-
consuming to liquidate.
A clothing store may have high
employee turnover. Employees
working in retail fashion stores are
usually at the start of their careers and
may seek better opportunities. You can
quickly lose workers to other industries or
competitors. Constantly training new
employees can be mentally and physically
draining for management.
A clothing store’s location can make
or break the business. Choosing an
excellent physical store location is crucial
to the success of your clothing store. If
there is too little foot traffic in an
undesirable area of town, or the store
doesn’t attract the right audience, you will
have difficulty reaching your sales goals.
Julie Thompson and Skye Schooley
contributed to this article.
Dave Thomas
Community Member at business.com
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