If you have always wanted to work in fashion but you have never wanted to work in the fashion industry, opening your own clothing store may be the perfect fit for you. However, the challenge of opening a new clothing store may seem to be a little intimidating. Well, you can relax. I’ve got you covered. You can open your own clothing store in ten easy steps.
Ten steps to opening your own clothing store are:
- Find your niche by evaluating your surrounding market.
- Identify your target audience to help you create your own brand identity.
- Perform a competitiveness analysis to identify your competitors.
- Write a well thought out business plan.
- Decide which type of business you want and file your legal paperwork.
- Secure the financial backing your clothing store will need.
- Choose the perfect location for your storefront.
- Purchase your inventory, price it, and set up an online store.
- Establish your policies and procedures, then hire your staff.
- Develop and execute an amazing marketing plan.
In this article, we will thoroughly explain the importance of each of these ten steps, in addition to how they will be beneficial to you when opening your clothing store. We will cover everything that you need to include in your business plan to ensure that it is well written and easily executed. I will also include go into detail regarding the different types of legal structures of a business so you can choose which one will be the best fit for your store. Finally, I will include a short section regarding the different types of financial backing you can secure for your business, and a few ideas that you can use for your marketing campaign. Let’s dive into the exciting world of becoming a new business owner, shall we?
Evaluate the Market and Find Your Niche
Opening a clothing store of your own has been your dream for as long as you can remember. However, there are currently 158,931 small clothing stores currently in the United States, with the market growing by 3.5% every year, according to Ibis World. While market growth is indeed a positive indicator of the success of small clothing stores, you will need to find a niche to set your store apart from your competitors in a crowded market that is stillness expanding. Better yet, what are the demographics like where you are thinking of opening your store? Are there more men, women, or children in your area? What is the economy like near your store?

These are just two of the questions you will need to answer before you are able to find your store’s niche. Another factor that you should assess is the type of clothing you know best and can be sold easily. Most small businesses don’t stay open long enough to see their fifth anniversary. In fact, less than 51% of small businesses are still open after five years, according to Forbes. In the addition, the number one reason most small businesses close is that they fail to cater to their market. Still, there is good news. More people are going back to in-person shopping at smaller businesses. With small businesses making a comeback, now is the perfect time to find your niche and open your store.
Identify Your Target Audience and Create Your Brand Identity
This step is should work in conjunction with the last step, because you will need to identify your target audience to help you with your store’s niche. When you combine your target audience with your niche, you will be able to establish a brand identity that is essential to the success of your store. I’ll bet that you did not know that and astonishing $37 billion is wasted every single year on marketing to the wrong customers. As a small business owner, your marketing budget is probably limited. Why spend your precious advertising dollars on a marketing campaign that is not geared toward a specific audience? One of the many benefits of identifying your target audience is that you can focus your advertising on the right customers.
So, how do we identify your target audience? Well, the website Marketing Revolution says that there are seven ways that you can accomplish this. These include:
- Be sure to analyze your customer base and conduct interviews with them.
- Learn to identify trends in the industry through market research.
- Take a close look at your competitors to see what they are doing.
- Use personas to determine the needs of your target customers.
- Identify the people who aren’t in your target audience.
- Continue to collect data and have meaningful interactions with your customers.
- Don’t be afraid to use Google Analytics to help you out.
Perform a Competitive Analysis To Determine Your Competitors
One advantage you can have as a a business owner is the ability to determine who your competitors are. There are several ways you can accomplish this, but performing a competitive analysis is possibly the best way to determine your competitors. In case you were curious about how to perform a competitive analysis, the United States Chamber of Commerce has listed a six-step guide to completing one. These steps are as follows:
- Identify who your competitors are.
- Analyze the competition’s online presence.
- Check out online reviews of your competitors.
- Speak with the competition’s customers.
- Identify the strengths and weaknesses of your competition.
- Use all of the research tools at your disposal.
Write Your Business Plan

One of the most common mistakes that small businesses make is that they do not place enough importance on having a good business plan. I have always believed that most things in life fail because of poor planning. The same theory applies to the business world. A business plan is an especially important tool that allows you to get a clearer picture of the direction that you want your clothing store to go. Do you remember how people used to print directions from the MapQuest website before going on a trip? For those of you who are too young to remember, directions printed from this website were clearly defined in a step-by-step format that made traveling much easier than reading a map. Your business plan is very similar to that because it clearly defines the direction that you want your business to take through a series of detailed steps.
Although your business plan can guide your store in the direction you would like it to go , there is another reason that having a business plan is a necessity. Having a well thought out business plan can make it much easier for you to secure additional financing for your store. Now that we have determined the importance of having a good business plan , let’s take a closer look at its different parts. Per Indeed, here are the most important parts of a business plan:
- Executive Summary
- Business Description
- Market Analysis and Strategy
- Marketing and Sales Plan
- Competitive Analysis
- Management and Organization Description
- Products and Services Description
- Operating Plan
Determine Your Business Structure
Going into business for yourself will require plenty of important decisions. One of the most important decisions that you will make as a small business owner is deciding what type of business structure you want your clothing store to operate under. Because your clothing store will start out as a small business, this choice can be narrowed down to a couple of different types of business structures. However, I am not saying that you need to limit yourself to a few basic structures. There are quite a few to choose from. But, for the sake of time, I will include the most logical and popular choices for small businesses. The most popular type of business structure for a small store is a sole proprietorship. In this structure, you are the sole owner and are completely responsible for the business.
The second type of business structure is a partnership. In a partnership there are two equal parties who both have ownership in the business. Although both parties are responsible for the business, the partnership agreement will dictate the amount of ownership and responsibility each party has. A third option that you may choose for your clothing store is an LLC, or a Limited liability company. This business structure separates the owner’s personal assets from the business assets to prevent the owner from losing all of his or her personal belongings if they are sued. Whatever business structure you choose for your clothing store, be sure to file all of the appropriate paperwork and obtain all of the necessary permits. Failure to do so could be disastrous for your business.
Secure Your Financial Backing
Starting a small business can be costly. Per the Houston Chronicle, it can cost anywhere from $50,000 to $150,000 to start a small clothing shop. While some business owners are able to financially back their business without the need for additional funding, this isn’t the case for all prospective owners. Some business owners have to turn to investors. Although some outside investments come from friends, family, and other associates, they can also be obtained from other sources. While there are still traditional methods like pitching your idea to a roommate full of potential investors, we now live in time where financial backing can be secured online through crowd funding and Kickstarter campaigns.

If you are prefer not to take the crowd funding route, you can always look into financing your clothing store through angel investors. Nerd Wallet defines angel investors as “high net worth people who fund startups for early-stage businesses.” So, how does its work? As the business owner, you would give up an ownership stake of your business in exchange for the finance you need. Now, you may be thinking that this sounds too good to be true, and that every small business owner should choose this option if they need additional funding. Unfortunately, angel investors are not easy to come by, as the minimum income requirements to become an angel investor include an net worth of at least one million dollars and a minimum salary $250,000 per year.
Find Your Location
This is where the fun really begins, because you will start seeing your goal of the owning a clothing store materialize when you start searching for your storefront. If I may offer a small suggestion for this step, I would strongly recommend taking an experienced contractor with you to assess any undisclosed damages or potential problems that you may arise. If you don’t have any family, friends, or acquaintances who work in construction or who are familiar with construction, I would suggest seeing if you can hire a general contractor to help you with your search. People often fall in love with a building or a location and fail to see any potential problems they may encounter. Taking someone along with you who doesn’t have an emotional attachment to your business may help you to keep a level head.
Choosing the perfect location for your business can be an exciting step in this process, but there are a few things that you need to consider when looking for the perfect spot. Per the Entrepreneur website, here are a few questions that you should keep in mind when looking for a location for your storefront:
- Does your location have the ability to attract customers?
- What is the competition like in the area?
- Are there available access routes to your store?
- What are the zoning regulations like?
- Is your location in the direction that your city is expanding?
- How is the general appearance of the building and the area?
The Best Revenue Streams For A Clothing Business
Purchase Your Inventory and Set Up an Online Store
After you have found the perfect location for your storefront, you will need to fill it with merchandise. This is when you purchase the inventory you want to carry. While this may be an exhilarating experience for any new business owner, it can also prove to be a difficult task. You will need to decide on which brands you want to sell, as well as which styles you think will be popular choices for with your customers. Luckily, Practical Ecommerce have offered the following five tips to keep in mind when purchasing your inventory:

- Put yourself in the customer’s shoes.
- Have a working knowledge of inventory.
- Work on building relationships with your suppliers.
- Analyze and understand fashion trends and measure your sales.
- Keep a close eye on what your competitors are doing.
While I have no doubt that these five tips will help you to stock your store better, I also want you to understand that there are going to be times when you make a mistake regarding your inventory. Not every item you choose is going to be a top seller or the next big trend in fashion. That’s perfectly okay, as long as you learn from your mistakes. Perhaps the most important thing to remember is to roll with the proverbial punches and keep moving. Don’t forget to set up your online store as well. This gives you the opportunity to reach many more potential customers than solely relying on solely having a physical location which can easily translate into sales.
Establish Policies and Hire Your Staff
Once you have made the necessary decisions and have taken all of the steps to get you to this point, you will need to staff your clothing store with the right people. This is probably the most difficult step in business to master. Most businesses will encounter a few bumps along the way. So, how do you make sure that you hire the right people? Thankfully, RetailDoc has provided us with the following tips for hiring in a retail setting:
- Hire more full-time employees and give them more shifts.
- Look for positive people who get along well with others.
- Call references and former employers.
- Sell potential employees on the why your store is a great place to work.
- Do not follow “gut instincts” and take some time after the interview to decide.
If you are going to hire people to work in your store, you will also have to establish your policies, procedures, and ground rules. Sadly, many small businesses make the mistake of being to relaxed with their policies because they want to provide a more relaxed working environment. While I understand that your small clothing shop will not be run like a chain store, you should always remember to keep things on a professional level with your employees. Believe it or not, this will have a big impact on the way they interact with customers. This is one of those things that you may think isn’t a big deal, but you will definitely see the difference in your sales, revenue, and profits.
Develop and Execute Your Marketing Plan
The next step to take after you have gotten your store is fully staffed is to start getting some customers in the door through a unique and effective marketing plan. I’m certain that the majority of you are aware of many of the traditional marketing strategies that have been used time and time again. While billboards can be a great way to get the name of your store in the public eye, they can also be expensive, which is may not be practical for a new business. We have all all heard about (and possibly experienced) having flyers placed on our windshields while shopping. However, this tactic isn’t very effective because most people immediately throw them away.
If know what most of you are probably thinking. If these are not effective ways to market, why have they stood the test of time? Honestly, I think that many businesses have a lack of creativity when it comes to marketing, while others simply cannot adapt to the changes occurring in the business world today. Worldstream has given the following suggestions to effectively market fashion related businesses:

- Invest in a great website.
- Create style guides for your customers.
- Make short videos and start a YouTube channel.
- Uses social media platforms like Instagram, TikTok, and Facebook.
- Establish partnerships with well-known bloggers and content creators.
- Purchase ads on Google, Facebook, and Instagram.
- Engage your audience with polls and contests.
Conclusion
While opening your own clothing store may initially seem like a daunting task, following the ten steps in this article can make the process a little less intimidating. First, you will have to find your niche. Next, you will need to identify your target audience, although the first two will usually be work in conjunction with each other. Once you have taken the first steps, you will have to identify your competitors through a competitive analysis. Writing and great business plan should be next on your agenda. In the next step, you will need to decide on a business structure for your store and file all of the necessary paperwork.
The next thing on your list is to choose the perfect location for your storefront. Now it’s time to purchase and price your inventory, and set up your online store. Establishing policies and procedures is next on the list. You will need to have these in place before you hire employees to staff your clothing store. The final step on the path to opening your clothing store is to come up with a unique and amazing marketing strategy. This is an absolute necessity for the survival of your business. Once you have done each of these ten steps, you should be ready to open the doors to the public. Now you can focus on your dream of being a business owner.
How Much Money Do Boutique Owners Make?
Related Questions
What is the average annual revenue for a small clothing shop or boutique?
There are many factors that can play significant roles in determining the average annual revenue of a small clothing shop or boutique such as the population and economy in your city, and the location of your business. However, the average annual revenue of a small clothing shop is roughly $51,000 per year.
Have small clothing retailers grown or have they decreased in the last five years?
While there has been a recent increase in purchasing clothing from small retail shops in the last year, independent clothing stores have experienced a decline in revenue over the last five years. The total decrease and revenue for small clothing stores over the course of the last five years has been around five billion dollars. However, small clothing shops and boutiques are predicted to experience significant growth in the next year, with signs of continue growth for the next several years.
To learn more about how to start your own fashion clothing line check out my startup documents here
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.

Meet Shawn Chun: Entrepreneur and Fashion Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a designer or boutique owner at a craft fair, farmers market, retail location or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Fashion Business Boss: I want to help fashion business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.