How to Investigate Potential Locations for your Store

Smartstyle walmart: If you have a passion for fashion and style and want to be your own boss, then opening a clothing store may be the perfect decision for you. Starting a business takes some thought and planning, but the effort is worth it! We’ll walk you through how to launch your own apparel store from deciding on your target audience to securing funding to marketing your business online. For a complete guide to launching your dream boutique, apparel e-commerce store, or classic brick-and-mortar clothing shop, read on.

Identify your target audience. Your target audience determines almost everything else about your store, from the products you carry to the location of your storefront. Start by brainstorming who you’d like to market to. Then use that decision to make other decisions about your store.

• Think big at first. Do you want to appeal to men or women? Then get more specific. Think about what ages, professions, and styles you want to appeal to.
• To start, go by what you know. If you worked in a store that sold suits to businesspeople, then you already know that market. Consider entering a field you have experience in like this.
• Consider where you might make the most money. Business suits might not be in high demand in a small town. But you may get a lot of tourists in the summer. In this case, it may be better to open a store geared to tourists.

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Investigate potential locations for your store. Location is one of the most important early decisions you’ll make in opening your business, so conduct careful market research. Look for a location that has a good foot traffic to get your first customers. Look for other businesses like yours. Small businesses often cluster together to attract as many customers as possible, so this may be a ready-made location for you.

• Don’t locate yourself too close to identical stores. If there are a lot of other small clothing stores in the location you’re looking, this market may be too saturated. Consider finding a different location.
• If you’re marketing to tourists, for example, then locate your store near the main attraction areas.
• For good foot traffic, open the store near restaurants and coffee shops. Places where people visit often can bring in a lot of window shoppers.
• Find out what the rent is in every area you look. This will be a big expense, so don’t overlook it in the planning stage.

Find a specialty for your store’s merchandise. Big department stores offer all the big brands at low prices, so your store won’t stand out if you try to follow that model. Think about what would set you apart from larger competitors and other small businesses. Carry brands or products that department stores don’t, or develop a specialty in a field that your area lacks.

• One good angle is carrying brands made by local manufacturers. This gives a much different flavor to your store than someone could get at a large retailer.
• Your town may have a lot of off-brand boutique stores, but perhaps they lack a maternity store. This could be where you make your niche.
  

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Develop a backup plan if your business isn’t successful. Remember that starting any business is a risk and many small businesses fail. Don’t let this discourage you, but also have backup plans in mind in case the business doesn’t work out.

• Have emergency savings to cover 6 months of living expenses if you have to find a new job.
• Remember that clothing stores usually have smaller profit margins than other businesses. Get into this because you love the industry and want to work with people. This passion will help you deal with below-average profits.

Determine your total operating costs. Figure out how much your store will cost to run before opening it. If you don’t have a full financial picture, your store is unlikely to succeed. Operating costs, sometimes called overhead or fixed costs, are the expenses you have to pay regularly just to keep the store open.  Add up all the costs that remain consistent each month and have to be paid. The resulting sum is your operating cost.

• Common items for operating costs are rent, utilities, insurance, and phone/internet connections. If you take out loans, paying them back is also a fixed cost.
• Common advice is to keep your rent about 6% of your yearly sales. Keep this in mind when you add up your costs. If rent is $2,000 per month, that’s $24,000 per year. That means you’d need about $400,000 in sales to meet this recommendation. If you can’t project sales that high, consider finding cheaper rent.
  

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Add up your inventory and labor costs. These costs are called variable costs, because they can change from month to month. For instance, you could buy less inventory or hire less workers and your store would still stay open. Add up what all your inventory will cost you and how much paying your employees will cost. Then combine this number with any other variable costs you have.

• Some other variable costs include advertising and marketing expenses, since you technically don’t have to do these things to stay open.
• Add up your fixed and variable costs to get your breakeven price, meaning the amount you have to make each month just to cover your expenses.

Draw up a business plan. A business plan is crucial not only to focus your own thoughts, but also because any potential investors will want to see your plan before providing any financing. Put together a comprehensive explanation for your business, including the products you’ll sell, your operating plan, and all your expenses. Be ready to present this plan to anyone you ask for financing.

• Start by describing your business concisely. What will you sell and who is your target audience?
• Then outline how you will fit into the current market. Explain the research that you’ve done and how you’ll set yourself apart from competitors.
• Finally, outline your total costs, both fixed and variable. Then note how much financing you’ll need to get started.
  

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