How to Start a Clothing Business: 12-Step Guide

Opening your own boutique can seem a little daunting at first. You can see the end goal clearly. You, selling your stylish designs in your very own store. But the process of getting there is still a little foggy. 

Don't fret. We've put together a complete, 12-step guide to help you start a boutique. 

Step 1 - Come up with a brilliant idea!

First things first, you want to establish your niche. Maybe you have a specific style of clothing you want to sell, or you could have a target customer base in mind. This will help you discover your unique selling point (USP), which will differentiate your boutique from others. For example, you may want to only stock sustainable and ethical clothing. Or, maybe you want your boutique to sell stylish work attire. If you're still deciding what to stock, our guide on the best retail products to sell is a good place to start.

Step 2 - Create a business plan

Once you have your initial idea, it's time to start turning your dream into action. To do this, you'll need a business plan. A business plan is a written document that describes your business. It's essentially the foundation of your business, and without one, you'll likely struggle to make a start. It covers objectives, strategies, sales, marketing and financial forecasts. Having a business plan is essential as it will help you to better understand your boutique, find potential problems, set goals and track your progress. 

After you've finished going through the steps needed to start a boutique, visit the Prince's Trust for some great business plan templates.

Step 3 - Source and apply for funding  

Once your business plan is completed, you should have a better idea of the costs associated with starting your boutique. Your next step is to begin sourcing funding to help you pay for these costs. 79% of business failures are due to starting out with too little money, so this funding could really make or break your business. Some sources of funding for small businesses include small business loans, small business grants, family and friend loans, and crowd surfing. 

Step 4 - Complete legal requirements

It's now time to complete your legal basics, including choosing a business structure, following any regulations, and getting the correct licenses and permits required for your boutique. Clothing itself isn't strictly regulated in the UK, so you won't need a specific license to sell your items, but there are several other legal essentials most boutique owners need to sort out.

If you're opening a physical premises, you'll likely need to register for business rates with your local council, and it's worth taking out public liability insurance in case a customer or visitor is injured on your premises. If you're collecting any customer data, whether through an online store, a mailing list, or a loyalty scheme, you'll also need to follow UK GDPR basics, such as only collecting what you need and being transparent about how you use it.

There are other, more situational licenses to be aware of too. For example, if you plan on playing live or recorded music in your boutique, you'll need a license for that specifically.

Be sure to visit your government website to find out exactly what you need to do legally to get your business up and running.

Step 5 - Research the latest fashion trends 

Fashion is constantly changing, and you want to ensure that the items you sell in your boutique are always on-trend. Staying current means continually researching and updating your inventory. You should have a great idea of all the latest trends in fashion throughout the year and keep an eye out for any seismic changes that could affect your business. You'll also want to ensure that the styles and designs you use are relevant to your target customers. Magazine, fashion shows, trade shows and an online search should give you some great ideas of items to stock in your boutique. 

Step 6 - Source your suppliers and manufacturers 

Now that you know what clothing items you want to stock, it's time to start finding suppliers and manufacturers. You need a source that will supply high-quality items for your boutique.

The first thing you should consider is whether you want to choose a domestic manufacturer or find an overseas company. There are pros and cons to both. Domestic suppliers tend to be a little pricier, but shipping time is usually a lot longer with overseas manufacturers. Look out for manufacturers that specialise in the items you have in mind. Remember to always ask for samples as the photographs on their site might not be accurate. For a deeper dive into sourcing, check out our guide on how to buy wholesale.

Step 7: Price your products 

Choosing the right price for your items will have a massive impact on your boutique's success. Retail fashion pricing commonly uses a multiplier of around 2.3 times the wholesale cost, which works out to roughly a 56% profit margin on the final retail price.

Here's how that plays out: if you buy an item for £34 and sell it for £78, your profit per item is £44. As a margin (profit as a percentage of the selling price), that's £44 ÷ £78 = 56%. It's worth keeping this distinction in mind, since markup and margin are easy to mix up: a 56% margin is not the same as a 56% markup. A 56% markup on £34 would only get you to about £53, well short of covering your costs and overheads at the same rate.

Do keep in mind your target customer when pricing. For example, a prestige pricing strategy is expected if you're selling designer goods to an older customer base. But if your target customers are younger, marking the price too high will likely drive them away. 

Step 8: Find your store 

If you're opening a brick-and-mortar boutique, you need to focus on finding the best retail space. It may be tempting to opt for the cheaper location and hope your boutique brings in a steady flow of customers through marketing alone. However, being in a busier part of town is a great way to increase footfall. When choosing a location, think about where your target customers spend their time. 

Step 9: Create a marketing plan

Your boutique is almost open. You've got a great range of inventory, all of the legal requirements have been met, and you're preparing for your grand opening. Now it's time to tell the world. Marketing is an essential part of building a successful boutique. There are many ways you can promote your business, from social media content and ads offering in-store promotions to hosting pop-ups before you move into your boutique. 

Your boutique's layout and displays are also a fantastic way to get passersby inside. 

Step 10: Hire some help

Many business owners start on their own. But eventually, you're going to want to hire some help. Running a boutique can be difficult, and having someone to assist you will make it a lot easier. Make a list of your operational policies, as well as what you'll need your employee to do. Retail assistants tend to help with sales, cleaning and organising the store and marketing support. 

Step 11: Launch your grand opening.

You've done it! You're officially a boutique owner. All that's left is for you to plan your grand opening. Now, you don't have to spend a lot of money on the opening, but you do want it to be a big event. Reach out to your local papers and try to get some publicity around your opening. By securing media coverage before the event, you'll likely have a lot more customers attending, resulting in much more items sold! Remember to offer a promotional deal, nibbles, or even drinks  to get people excited about the event. 

Step 12: Run your retail business with a winning retail POS system

When building a business, you’ll need strong foundations to support your growth. Point of sale (POS) systems work as the backbone of retail businesses for a number of reasons. Designed to work as a complete business management system, you can control all vital aspects of your company from one cloud-based system.

Receive detailed analysis on the areas that matter to your business:

• Filter sales reports by individual product, profit margin, trending items, or employee
• Multi-award-winning inventory management that syncs online sales and in-person sales for the most up-to-date stock levels
• Create your own website or integrate with a fully loaded ecommerce platform
• Automatic order purchasing once stock once it falls below a certain level
• Customer management systems that save customer contact details and shopping preferences for more targeted marketing
• Integrations with over 100 apps, including marketing, accounting, bookkeeping, and loyalty program apps
• Employee management for more efficient scheduling and payroll 

Whether you're taking cash, card, or contactless payments, a good POS system built for clothing and fashion retailers handles it all in one place.

If you’d like to learn more about our industry-leading software, request a free callback with one of our experts.