Opening a boutique can be an exciting venture! I’ve done it myself many times. Back in the day, the only way to open a store was to do it brick and mortar style. Today, while many prefer to open online, some still love the idea of a beautiful, romantic and profitable boutique shop. For those of you, I give you my 10 Steps to open a boutique:
- Market Research and Planning: Research the market to identify your target audience, competitors, and location opportunities. Develop a business plan outlining your boutique’s concept, target market, products, pricing, and marketing strategies.
Where do you want to open? What is the neighborhood like? Does it have a store like yours already? If so, you can still get open – just make sure you are much better than the competition. If there is nothing like your concept, perhaps your town could use a shop just like you’re planning to open. - Choose a Niche: Decide on the type of boutique you want to open, whether it’s fashion, accessories, home decor, or a specialty boutique focusing on a specific niche such as eco-friendly products or handmade items. Your niche is just narrowing in on what you want to sell. Think it over, jot down some ideas and then select the type of boutique niche you are most passionate about.
- Select a Location: Choose a prime location with high foot traffic and visibility, ideally in a trendy or affluent area frequented by your target customers. Consider factors such as rent costs, lease terms, and zoning regulations. You don’t want your rent to be too high. And, you want to make sure you have plenty of parking.
So how much rent should you pay? It’s difficult to calculate it in a blog post because your neighborhood is as unique as you are. What price point will your items for sale be?
Here is a very quick, down and dirty calculation – but please don’t rely on this. It’s just a rough estimate so you have a ball park idea of what you can afford to pay in rent.
Suppose you plan on the average item in your store to sell at a retail price of $150. Your plan is to sell 35 items per day for a total daily sales of $5250 ($150 x 35 = $5250), not including sales tax. If your daily total sales are $5250 and you plan to be open 25 days per month, you can estimate your monthly sales will be approximately $131,250 ($5250 x 25 = $131,250).
A general rule of thumb, in retail, to calculate how much rent you can afford to pay, is to figure out 10% of your monthly retail sales. That number represents the most you will want to pay in rent, “all in.” All in means that is rent, plus any additional C.A.M (common area maintenance) fees that you will need to pay to the landlord on top of the flat rent.
So, let’s do a little math. If your total monthly sales are estimated to be $131,250, the amount of rent you can afford to pay to your landlord, all in, is $13,125, ($131,250 x .10 = $13,125). - Legal Requirements and Business Registration: You want to make sure your personal assets are protected and that you set up your business properly. The first place you want to get in contact with is your state’s Secretary of State’s office. They will let you know how to set up an LLC in your state and can point you in the direction of what other offices you will need to contact in order to set up your boutique.
I am not a lawyer and I can not advise you but I recommend you set up an LLC for your business, and get a EIN number from the IRS to make your business a professional entity and protect any assets you have. You will want to contact a lawyer to help you set this up.
If you live in a state that has sales tax, you will want to contact your state board of equalization or sales tax board to get set up for collecting sales taxes from customers and paying them to the state per their terms. You don’t want to mess that up as states take their sales tax revenues very seriously.
Be sure to register your business name and obtain any necessary licenses or permits required to operate a retail store in your area. Your city’s business office will be able to help you with this and any permits you need. Be sure to consult a business lawyer or business advisor to ensure you do everything to comply with local regulations. - Secure Funding: Determine the startup costs for your boutique, including inventory, lease expenses, utilities, and marketing. What are your funding options now? Do you have personal savings or equity in your home. HELOC (Home Equity Lines Of Credit) are usually pretty good sources of cash to finance a new business. But remember, you are financing your home. If you fail to make the payments, your home is on the line. I just want to make sure you understand what is at risk and don’t miss any payments.
Family and friends is usually a pretty good source of funding as well. Do you know someone close to you who might want to bet on you? Chances are, the people who know you the best, and know your character, are the ones most likely to loan you money for your new business venture. Put together a business plan and pitch your ideas to them. Maybe they will want to partner with you? You just never know.
What about crowd funding or angel investors?
I wrote an article how the 5 Ways to Make Money Without Spending a Dime so be sure to check that out too. It’s got some pretty good ideas for ways to make cash quickly – and it just might help you start your boutique business. - Set Up Supplier Relationships: Establish relationships with suppliers and wholesalers to source inventory for your boutique. Negotiate terms, pricing, and delivery schedules to ensure a steady supply of products that align with your brand and target market.
I don’t know what type of boutique you are wanting to start, but you can find millions of product ideas on sites like Alibaba. If you are looking for fashion, jewelry, shoes and just about any other type of fashion apparel you can imaging, I recommend checking out the Magic show in either New York or Las Vegas each year. They are tremendous shows and have absolutely nothing to do with magic 🙂
NOTE: You will need a business card and either a resale license (shows you are registered to pay sales tax in your state) or some other form of business Identification in order to register for the show. All the better to set up your LLC now, get your EIN from the IRS website, open a business checking account with those items and have checks and business cards printed. That way, you can get into the shows without any trouble.
If you don’t have your business name yet, no worries. You can set up an LLC and then once you know your business name, you can set up a DBA “doing business as” name and that can be the name of your store. Again, plan this with your lawyer, but do plan it! - Store Design and Layout: Create an inviting and visually appealing store layout that showcases your products and reflects your brand identity. Consider factors such as interior decor, lighting, signage, and display fixtures to enhance the shopping experience for customers.
When I was designing my stores, I did all of this myself. I wanted my store to be eclectic, romantic and edgie, and I just made it all work. I would recommend, if you are not gifted at store design, you hire a professional.
Here is an article on some of the top retail design firms. You will want to reach out to them, or others you may already know of, discuss what your vision is and ask them for pricing quotes for design. - Hire Staff: Once your store gets close to being built, you will want to begin to recruit and hire knowledgeable and customer-oriented staff to assist with sales, customer service, and store operations. I’d recommend hiring a few seasoned pro’s and a few newbies that you can mold from the start.
Make sure to write up an employee handbook for them to read before they start their first day. That way, they know what is expected of them and they come ready to get to work. Be sure to provide lots of on the job training on product knowledge, sales techniques, and customer engagement to ensure a positive shopping experience for your customers.
One thing I see a lot in retail are sales associates that are just “turned loose” on customers and are supposed to sink or swim. That is scary to the employee and annoying to the customers. Make sure you put some time into properly training your employees how you want things done, how you want the store to look and so on. You will be so happy you did. - Marketing and Promotion: Unless you are in an area with crazy good foot traffic (which some of you will be), you will need to develop a marketing strategy to raise awareness and attract customers to your boutique. Utilize a mix of online and offline marketing channels such as social media, email marketing, influencer partnerships, local advertising, and special promotions or events.
Be sure to start an email list right from your first sale. Use a good CRM (Customer Retention Management) system and never spam your list or sell it for profit. Protect your customers. If they love your store, style and wares, they will want to hear from you. If you abuse that trust, they will unsubscribe immediately. Retail Pro is one of my favorite retail inventory and CRM systems and I highly recommend you check them out. - Grand Opening and Beyond: Plan a grand opening event to generate buzz and excitement around your boutique. Invite absolutely everyone you know and everyone they know. Have a photo booth, selfie wall, balloons, champagne and snacks. Offer customers and employees free headshots if they come to your event. Offer special discounts, giveaways, or exclusive promotions to attract customers on opening day. I love a good raffle at a grand opening party. Raffle off a $500 gift certificate, or five $100 gift certificates. I found, when doing this, the winners come in, buy several things with their gift certificate, and become life long customers to the store.
As you get open and start to sell, continuously monitor and evaluate your boutique’s performance. Gather feedback from customers, see what’s selling and what’s not and then adapt your strategies to optimize sales and make your customers exceedingly happy.
Remember, opening a boutique requires careful planning, dedication, and hard work, but with the right strategy and execution, it can be a fabulously rewarding and fulfilling business venture.
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