How To Start A Clothing Boutique Business

You've stumbled upon the idea to build a clothing boutique and now you're ready to take the next steps.

There's a lot to think about when building a business, so we put together a guide on how to get started, launch, grow and run your clothing boutique.

We also provide you with real-life case studies and examples of founders running successful clothing boutique businesses (and how much💰 they're making today).

💡 Idea

Which Business Model Should You Choose?

When deciding whether or not to start a boutique business, it's important to first decide if you want to operate a physical or online store (or both).

Physical Location

If you do plan to open a physical store, it's important that you find a spot in a high-traffic area. This is a great way to gain exposure for your business and also get new customers.

It's also important to consider the higher costs associated with operating a physical store (ie - employees, rent, utilities, etc) and the long days/hours associated with running a store.

The main benefit, however, is that customers love being able to see and try on products in person. It's important to recognize that although some people enjoy shopping online, there will always be the shopper persona that likes to touch, feel and see the product they're buying.

Online Business

One of the main benefits of operating online is that you are exposed to the entire world, versus just one local area. Rather than depending on foot traffic, you have all the tools at your disposal to create exposure for your store online.

Additionally, there are much lower costs to operate an online store - fewer employees, you can operate from your home, and you get to create your own schedules (yes, holidays included!)

Although you are operating online and have the ability to connect with people all over the world, it's important to consider that you will need to invest marketing money upfront in order to promote your store to the right audience.

So, which business model should you go with?

Each model has their benefits, however, the consumer trends in the fashion industry are shifting towards e-commerce businesses (more on this in the market opportunity section).

Gia Paddock, founder of Boutique Rye explains the 3 reasons why she decided to build an online store:

I wanted to find something I loved but also allowed me to stay home at the same time. While I was working at this local boutique, I realized that there was a lot of sitting around during the day when other people were out working. Therefore, an online business seemed like the best route for a few reasons:

  1. We didn’t have the extra funds sitting around to pay sign a year or two-year lease at a brick & mortar location.
  2. I realized the opportunity to reach a wider audience online compared to the audience of this small local boutique. For us, it seemed like hitting two birds with one stone.
  3. And finally (maybe the most important of all), running it as an online-only business would allow me to stay at home with Riley!

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Gia Paddock, on starting Boutique Rye ($10,000 revenue/mo) full story

Players

Big Players

Small Players (the opportunity)

Market Opportunity

Recent trends are showing that the fashion industry is shifting to digital.

With the new norm of physical distancing, consumers have been less likely to visit brick-and-mortar stores and new shopping behaviors have emerged online.

According to Statista, by the end of 2019, the eCommerce market hit $3.5 trillion and represented 14% of the total shares.

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Now, data predicts that by the end of 2020, eCommerce sales will reach $4.2 trillion and make up 16% of total retail sales.

It's important to note that although the trends are looking positive for e-commerce retail, that also means there will be more competition, more innovation, and higher costs to advertise effectively.

🎬 Start

Purchasing Inventory For Your Boutique

When first starting out, it's important to start small with your overhead to get a gauge for what people want.

Just remember - if you order a line of items that don't sell, it's nearly impossible to recoup the money lost.

Buying the right inventory takes research and planning in order to get it right.

  1. Identify your target audience: Identify the age, gender, annual income that you will be selling to. This is a defining factor in ordering the right inventory that will sell.
  2. Research your competition: Conduct market research and identify the different types of styles, price points, and materials being used. This will help you see what's trending and ways that you can improve/stay ahead of the competition.
  3. Create an inventory wishlist: Identify what you need for the launch of your business and create a budget that you will stay within. Remember, it's okay to start small.
  4. Find a clothing supplier Make sure to first compare prices and analyze different options. Here is a great resource on how to find the right clothing supplier
  5. Delivery timing: Schedule the inventory delivery to match with seasonality and trending buying seasons

Pro-tip: It's easy to become biased based on your own fashion preferences on what types of clothing to purchase. This is where a lot of fashion businesses go wrong. It's important to base purchase decisions on current buyer behavior, trends in the market, and specific to your niche.

Write a Business Plan

Writing a business plan from the start is critical for the success of your clothing boutique.

Why?

Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.

For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.

You may want to consider expanding upon these sections in your business plan:

  • Executive Summary: Brief outline of your product, the market, and growth opportunities
  • Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
  • Products and Services: Specifics on the products and services your business will provide
  • Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
  • Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
  • Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
  • Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
  • Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
  • Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.

Startup Costs

If you are planning to start a clothing boutique, the costs are relatively low. This of course, depends on if you decide to start the business on your own or bring on a big team at first.

We’ve outlined two common scenarios for “pre-opening” costs of a clothing boutique and outline the costs you should expect for each:

  • The estimated minimum starting cost = $2,550
  • The estimated maximum starting cost = $36,800
Startup ExpensesThese numbers are based off the average expenses incurred when starting a clothing boutique. Min Startup CostsDefined as an clothing boutique you have started and plan to execute on your own. You’re able to work from home with minimal costs. Max Startup CostsDefined as an clothing boutique you have started with one other full-time planner. You decided to rent out an office space to set up the business.
Licenses and Business FormationThis refers to setting up your business license and establishing any legal contracts. $250 $1,000
PayrollThis number depends on if you decide to pay yourself a salary up front and the amount of employees you hire. The average salary for a full-time clothing boutique individual is $0 $4,000
Equipment and TechnologyThis includes (but is not limited to) any expenses such as: laptops, office supplies and technology platforms $500 $5,000
Advertising/PromotionThis includes (but not limited to): paid ads, public relations, networking events etc. $200 $2,000
Website and Email HostingCosts to host website, domain names and email $100 $300
Website Design (Outsourced)Hiring an outside contractor to assist with design elements of your website $0 $5,000
RentThis refers to the office space you decide to work in. Depending on the cost of living, this number could vary. $0 $2,500
Liability InsuranceDepending on which state you live in, the costs and regulations vary for liability insurance. You can learn more here. $500 $2,000
Shop DecorIf you plan to operate a physical store, you may want to consider decorating the place with wall decor, furniture, plants etc. $0 $7,000
InventoryThis includes all upfront inventory you will need in order to launch. Be sure to compare prices of wholesalers to ensure you're getting the best deal and margins remain high. $1,000 $8,000
Total Starting Costs $2,550 (min) $36,800 (max)

Starting a fashion business with little or no capital?

Emily Casseday, founder of Blush Boutique Co describes how she was able to stay under $10K to get off the ground:

Because we were starting small, we didn’t have a lot of overhead. One of the biggest downfalls of starting a business is having too much to carry without a lot of income, which is why we decided to start in my basement instead of fully going brick and mortar.

We wanted to test the waters first to see if we had a viable business for our community. In order to finance the beginning of our shop, we used some savings and one credit card. Our goal was to never outspend what we made, so we started with a limit of $10,000 on the card and paid it off as we went. That first year, we didn’t take a paycheck so that we could completely get out of debt.

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Emilie Casseday, on starting Blush Boutique Co ($25,000 revenue/mo) full story

Raising Money

Since the startup costs to start clothing boutique range between $2,550 - $36,800, there are ways you can raise money to cover these costs.

Here are a few ways you can secure additional funding:

How Much Profit Can A Boutique Business Expect To Make?

How Much Should You Charge?

Typically, clothing boutiques mark up the price of the item anywhere from 50-60% of the wholesale price.

It's important to identify your target audience first and foremost so you can:

  • Find the right wholesaler
  • Identify the quality of the clothing you want
  • Land on a price point that will fit perfectly for your clientele.

Learn more about how to price your clothing items here.

Revenue Numbers

Blush Boutique Co

  • $25K/month
  • 7 employees
  • Operates in a physical store
  • Opened the boutique in her basement in 2017

Boutique Rye

  • $10K/month
  • 2 founders & zero employees
  • Operates online only
  • Started in April 2017

How to name your clothing boutique

It's important to find a catchy name for your clothing boutique so that you can stand out in your space.

Here are some general tips to consider when naming your clothing boutique

  • Avoid hard to spell names: you want something easy to remember and easy to spell for your customers
  • Conduct a search to see if others in the space have the same name
  • Try not to pick a name that limits growth opportunities for your business (ie. if you decide to expand into other product lines)
  • As soon as you have an idea (or ideas) of a few names that you love, register the domain name(s) as soon as possible!

Gia Paddock, founder of Boutique Rye explains how they came up with the name of their business:

What took the longest was deciding on a name and our logo; I wanted it to be meaningful, and I cared so much about what people thought.

Looking back, my advice would be to quit thinking about other people. This is my business, and all that matters is if I am happy the name and logo.

A popular national brick & mortar women’s boutique that many may have heard of is called Francesca’s… How original, right? So we came up with Boutique Rye named after our son, Riley. We put "boutique" in front to be a little different.

Now came the logo… Oh man, was this a task. We hired a graphic designer that we went to high school with, and went back and forth with him for about a month and a half. I wanted something that really described my style which is kind of “boho chic” and decided on a dreamcatcher. The dreamcatcher is also what our son’s nursery was decorated in, so it truly felt like a family business.

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Gia Paddock, on starting Boutique Rye ($10,000 revenue/mo) full story

When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.

The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.

These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.

  • LLC: All income and expenses from the business are reported on the LLC personal income tax return.
  • S corp: Owners pay themselves salaries + receive dividends from profits.
  • C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.

Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.

Learn more about securing the right permits and licenses ➜

🚀 Launch

Build A Website

Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).

  1. Pick a domain name that's easy to remember and easy to type
  2. Choose a Web Hosting Plan (ie. Shopify, Squarespace)
  3. Make sure you choose the right theme and design
  4. Implement the proper page structure (ie. about page, contact page, pricing etc)

To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.

There are a ton of different websites platforms out there, and it's important to choose the right one that will set you up for success

Shopify is most commonly used for eCommerce boutique businesses and Squarespace is most commonly used for physical storefronts.

Here's everything you need to know about these two platforms:

Traditional Launch Strategies (that work)

There are various different ways you can launch your clothing boutique successfully.

Here are a few different strategies to get customers excited about your clothing boutique:

  • Set up a Facebook page for your business. This is a great way to establish an online presence
  • Host an event in a fun location with drinks & food. This is a great way to get exposure in the local community.
  • Live sales to get customers excited
  • Send a hand-written letter in the mail with a discount on your services to the local community/neighborhoods.

Gia Paddock discusses how live sales on Facebook was KEY to her launch success:

Our official launch happened the day after my birthday, July 26, 2017.

I decided to get the word out by going “live” on Facebook. When you have a personal profile, Facebook will allow you to record yourself in real time, and they allow any of your friends to click on the video and watch if they want. I told everyone our background story and that we would have our first live sale that next night, which was a Thursday. Little did we know Thursdays would be “our day”!

Live sales were something that I wanted to do, and it was different than other online boutiques I had seen. Basically, I would go “live” on our boutique’s Facebook page with our new inventory and show each item, give a little description on it, how it fits, price, sizing, etc. It really feels like I am everyone’s own personal shopper, which is amazing!

Our first live sale was pretty successful. Most of our first customers were my friends or acquaintances from school. We decided to start right away and do a giveaway if they shared the live sale video. We gave away a $100 gift card raffle as an incentive to anyone that shared the video.

This would prove to be by far our best strategy to grow the boutique without spending a dime on traditional advertising.

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Gia Paddock, on starting Boutique Rye ($10,000 revenue/mo) full story

📈 Grow

Social Media Advertising is one of the leading ways to get the word out when it comes to clothing boutique.

There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.

Let's talk about a few of the main platforms and what makes them unique:

  • Facebook Advertising - more than 2 billion monthly users. Facebook is the best for lead generation + capturing email addresses for e-commerce businesses.
  • Instagram Advertising - approximately 500 million monthly users and has a higher audience engagement rate than any other platform. Instagram ads are best for linking to a product page or landing page and reaches the 18-29 age group most effectively.
  • Twitter Advertising- Small businesses typically use twitter ads to drive brand awareness, but the platform is meant more for organic engagement (and is not as heavily used for paid advertising)
  • Pinterest Advertising - 175 million monthly users and most effectively reaches the female audience. Pinterest is great for promoting products without "promoted". The promoted pins have a way of blending right in.
  • LinkedIn Advertising - 227 million monthly users and is geared towards the B2B market and generates the highest quality leads. Great platform for recruiters, high-end products and services that will help businesses

It's important to first define your goal/objective so that you don't waste time and money into the wrong platform:

Here are some different questions to ask yourself as it relates to your goals:

  • Do I want to simply drive brand awareness?
  • Do I want to drive users to my website to gather information?
  • Do I want to increase sales and get my customer to take action?

From there, choose the platform that targets your audience best and start experimenting!

Learn more about social media advertising ➜ here.

Grow Your Email List

The more engaged list of emails, the more engaged customers, which ultimately leads to more sales.

One of the best ways to start growing your list is by providing your customer with something free (or discounted) in return.

This could also be anything from:

  • Ebook
  • Fascinating case study
  • Video series
  • Free week of the product
  • Discount on the product

Learn more about how to grow your email list and improve email marketing ➜ here.

Dylan Jacob, founder of Brumate states their email collection tactic that is proven to work:

We use Spin-a-Sale for this (you spin a wheel for a discount code in exchange for subscribing to our email list). This has been the best email-collecting tool we have found because the customer truly feels like they won a prize rather than just a coupon code.

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Emily Cassedy, founder of Blush Boutique Co explains how their Facebook strategy is the #1 way of attracting new customers:

Our biggest tool for attracting customers and then keeping repeat customers has been social media and word of mouth. We made sure our social media platforms were attractive, inviting, and not too in your face.

We set up an editorial type calendar for our Facebook posts that we still use to this day.

For example, every Tuesday we have a vote post where our followers can vote on an item that we will bring into the shop. Our customers and followers love this and chime when that piece that is voted on comes in, we already have a set amount of people that will come purchase it because they were able to be a deciding factor.

We also make sure to do a live Facebook video when we get new arrivals to show what came in that week. The supply and demand of a piece then draw in more customers, even if one of the new arrivals sells out, they are still coming in to see what else we have in the shop.

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Emilie Casseday, on starting Blush Boutique Co ($25,000 revenue/mo) full story

Tap into your network

One of the most effective ways of getting the word out about your business is simply by tapping your network.

This means friends, family, counterparts, neighbors, even your uber drivers!

No matter where you are, there’s always an opportunity to promote yourself and your business.

Provide great customer service

Providing exceptional care and creating relationships with clients is a great way to build your reputation and retain customers.

Whether you are an online business or a physical business, it's highly important to communicate with customers and make them feel like they are the priority.

Just remember: customer service represents your brand, values, vision and YOU as a person.

Customer service is huge for us. Like I talked about, building a community has been one of the best bi-products in the shop.

We want everyone to feel loved, cared for, and appreciated.

If we have a customer that comes in quite a bit, we will begin to notice what they buy and reach out to them if something new comes in if we think they will like it. We also try to call people by name and greet them as if they were entering my home, not just the shop.

Another great way we retain customers is through a loyalty point system. When a customer gains enough points through their purchases, they are rewarded with a discount. It’s our way of saying “thank you” for having them be a great customer.

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Emilie Casseday, on starting Blush Boutique Co ($25,000 revenue/mo) full story

🏃 Run

How To Retain Customers

Retaining customers is one of the most effective ways to grow your clothing boutique.

Often times, it's easy to find yourself focusing on generating new customers, vs retaining your current ones.

Look at it this way - you are 60-70% more likely to sell a new product to an existing customer, than you are a new customer.

That's not to say that finding new customers and revenue streams is not important, however, the easiest (and most inexpensive) source of new revenue is right there in front of you.

Here are some ways you can retain customers for your clothing boutique:

  • Responding to comments on social media
  • Send discounts (or freebies) to loyal customers
  • Provide valuable content, for free
  • Write hand written thank you notes
  • Provide awesome customer service and build relationships with customers

To find out more tips and tricks on retaining customers, check out this article ➜ here

Outsourcing

If you can afford to hire someone to help support your clothing boutique, outsourcing is a great way to save you time and energy.

Most importantly, outsourcing can help you focus on the core growth of your business, versus spending your time on day to day tasks that other people can do just as well!

If you do plan to outsource your work, it's important to be hyper-familiar with the actual work involved.

Why is it important to be hyper-familiar with the work?

  • So you can understand how long it takes
  • So you understand the full process, edge cases, things that can go wrong.
  • So you can explain it in detail to your employee.
  • So you can make sure it actually works (for example - how do you know cold email works for your business if you’re not on the ground floor trying it out?)
  • Understanding the tasks at a deep level will save you a lot of time and money.

Tools to get started:

As a clothing boutique, there are some tools and platforms you may want to consider when getting started:

Resources

Books

Websites/Videos

Case Studies

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Samantha Walls,   Founder of Starter Story Blog

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