How to Start a Clothing Boutique

Part 1 - How to start a Clothing Boutique business - Background

A clothing boutique is generally much smaller than a regular clothing retailer, and it creates a more intimate environment. You attract customers who are looking for very specific styles and kinds of clothing with your boutique. Since many customers stick to their own styles, it is likely that satisfied customers will return to your business. It is important to form relationships with these regular customers, as their recommendations and satisfaction can contribute to your boutique’s success.

Our guide is in 3 parts:

• Part 1 - How to start a Clothing Boutique business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a clothing boutique?

The exact costs of opening a clothing boutique vary based on your size and location. Some veteran boutique owners recommend not starting with anything less than $50,000 in financing, while others claim that $150,000 or even $200,000 are much more appropriate. What goes into this cost? It covers acquiring a storefront and setting up utilities as well as acquiring an appropriate level of insurance for your business. You will need to pay any city and state-specific licensing fees, permitting fees, and anything else required. You will need to furnish and decorate the interior of your boutique in an interesting way and spend money on professional marketing, ranging from signs and logos to ads you take out throughout the city. And, of course, you must buy the clothes themselves, which is a variable cost because the more you order, the more you’ll pay. At the same time, however, the greater variety of clothes you have to offer, the more customers you can appeal to, so a healthy starting inventory is good.

Read our clothing boutique purchasing guide to learn about the materials and equipment you’ll need to start a clothing boutique, how much to budget, and where to make purchases.

What are the ongoing expenses for a clothing boutique?

The most obvious ongoing expenses for your boutique will be rent and utilities, followed by the appropriate property taxes for your location. You will need to pay any employees an appropriate wage each month. You should also be advertising each month, though the exact cost of this will vary based on the forms of advertising you primarily use. If you take credit cards (which is highly recommended), you will be paying transaction fees on those transactions every month. Finally, you must always be receiving new stock while finding creative ways to sell old stock; for a clothing boutique in particular, you don’t want to be stuck selling last year’s fashions.

Who is the target market?

In some ways, one of the most preferred customers is the kind who is indecisive. As opposed to the customers who say they are “just looking” and want to be left alone, the undecided customers are willing to make a purchase but are unsure what it should be. By being genuine and honestly helpful, you can simultaneously secure a sale and a loyal customer relationship. Similarly, so long as they don’t distract you from other customers, chatty customers are good because they already feel as if they have a relationship with you. This will promote regular visits, and they are more likely to trust your advice when you recommend a particular outfit.

How does a clothing boutique make money?

On the most basic level, a clothing boutique makes money by selling clothing and other goods. This involves buying clothes as cheaply as possible and then marking the price up a certain amount in order to create your profit margin. This may mean scouring online sales for great deals or possibly partnering with other boutiques or businesses to order certain items in bulk. However, you may want to be wary of doing this, because selling relatively unique and hard-to-find items is one of the chief attractions of a clothing boutique.

How much can you charge customers?

Typically, the clothes you sell should be marked up between 50 and 65 percent from their wholesale price in order for you to receive a decent profit. This effectively lets you calculate the exact price you sell each item of clothing for. One recommended calculation to determine the price is to take what you paid for the item and divide it by 100 minus markup percentage and then multiplied by 100. Thus, if you were selling designer jeans that you acquired for $30 at a 60 percent markup, you’d want to charge $75 for this item.

How much profit can a clothing boutique make?

A clothing boutique is potentially very profitable. The gross profit margins of apparel retail have leapt up in recent years, going from just above 36 percent in 2014 to almost 81 percent in 2015. Generally, retail rides the waves of the economy, so as more people acquire more jobs and money, they are more likely to buy clothes.

How can you make your business more profitable?

One way to make your business more profitable is to make it smaller. Most of the above assumes you are opening a traditional brick-and-mortar store somewhere. However, you can run a boutique in a small kiosk or online and dramatically reduce some of the startup and ongoing costs. If you have the skills and creativity, you can also create your own clothing line and sell it via your own store. This is a bit of a gamble since customers like traditional brands, but it lets you pocket more of what you sell when it comes to your own stuff. Finally, don’t be afraid to adjust your theme or niche as time goes on. It’s possible to be too specific as well as too general, so you must find the sweet spot of having a niche specialty that is still enjoyed by many different customers!

What happens during a typical day at a clothing boutique?

Many of the day-to-day activities at a clothing boutique involve interacting with customers. This ranges from greeting them, making small talk, answering their questions, and generally guiding them to clothing and styles that are well-suited for that customer. Other activities involve the clothing itself, such as managing stock, displaying everything in an attractive way, storing and receiving any clothing deliveries, and making sure everything displayed has a price tag. Other activities may include designing and mounting attractive displays and helping to ensure the security of your store.

Day-to-Day and Growth

What are some skills and experiences that will help you build a successful clothing boutique?

Some of the skills that will help you build your clothing boutique include being organized and self-motivated. You must be comfortable talking with strangers and initiating a friendly relationship with them. The job revolves around sales and marketing, most of which you’ll be doing yourself, so skill and experience in those areas are important.

A keen eye for fashion and attention to current fashion trends are also important. These can be easily cultivated by keeping up with fashion magazines and other outlets focusing on fashion.

What is the growth potential for a clothing boutique?

Overall, the growth potential for a clothing boutique is strong. Recent research indicates that clothes sales in the United States were up by seven percent in 2016. More interestingly, sales of women’s plus-sized clothing rose by 17 percent. This would indicate there is great growth potential for smaller clothing boutiques that cater to demographics that are often overlooked by major retailers.

What are some insider tips for jump starting a clothing boutique?

Keeping abreast of national and international trends means you can sell clothes to those who want to be on the cutting-edge of fashion. Developing and sticking to a particular theme also helps create brand awareness for your customers and sets you apart from other businesses. Finally, to the degree that you can choose your location, try to set up near a busy retail store that sells something other than clothes, allowing you to reap the benefits of their traffic.

How and when to build a team

Because a clothing boutique is typically small, deciding when to build a team is mostly a matter of determining when there is too much business for you to handle by yourself. You might base this decision on factors such as deciding to stay open later on weekends (thus, requiring more people) or simply if you need to invest more of your time growing the business and less of your time on the sales floor.

It is important, when adding people to your team, to ensure that your new employees are as passionate about clothing and people as you are. This ensures that you continue to offer customers the best possible experience.

Part 2 - Is a Clothing Boutique business the right fit for you?

Part 3 - Action plan to launch your Clothing Boutique business in 90 days