It can be overwhelming to think about a boutique business plan. Luckily, here is a helpful guide to get started.
If your goal is to open a fashion boutique, then you need a plan that could win an Olympic gold medal if there were such a category. The plan must turn your small space into a unique, trendy hot spot. Plus, it must show the various ways your profits will grow.
You need to create a successful boutique business plan. This may sound complicated. We get it. That’s why we put together a list of tips to help you in the process.
What’s Your Boutique Type?
Choosing your type of boutique is deciding how you will make money. Consignment boutiques make money by selling other people’s merchandise and taking a percentage of the sale. Retail boutiques are stocked with items you purchase at a discount, mark up the price, and sell for a profit.
A franchisee boutique has a business model established. You purchase the franchise and can sell the products of a company that already has a following. Staying inside the franchise boundaries is a must. Some franchises take a percentage of your profits.
Online boutiques are just that; everything is sold online from a selling platform that takes a percentage of your profits or your website.
Who Is Your Customer?
Boutiques succeed when there is a customer base you are targeting. Are you selling to women in their retirement years or young adults enjoying college life? Is your customer looking for clothing to wear on vacation, the boardroom, or a Friday night party?
Getting to know your customers will help you create a niche and narrow selections to make your customers happy.
Where Are You Located?
You can have the hottest clothing in town, but if your boutique is poorly located, it won’t be successful. To pick the right location, think about your customers first. Where do they hang out? Shop? Run errands? Don’t make your target customer travel far or out of their way to find you. Chances are, they won’t. Instead, make your boutique accessible and inviting.
Compare foot traffic and investigate other shops in the area. Consider signage, visibility, zoning, and costs of the location. Find out who provides maintenance and upkeep and if there are additional costs. Also, consider your personal needs, like how far away from your home and family is the location. Avoid choosing a site that will make your life more challenging.
Who Is Your Source?
Where you buy products to sell in your boutique can increase or decrease your profits. Many retailers attend trade shows, shop online, and talk to artisans. This takes a lot of time and effort, for which you are not compensated.
Wouldn’t it be much nicer to have one source that meets all your product needs? We agree. Buying from an online wholesale supplier is the most efficient way to get trendy, popular clothing at a discount. Finding the right wholesale supplier means checking reviews, learning policies, and consulting with their staff.
What Are Your Profit Margins?
Retailers can utilize three profit margins: net, gross, and operating. Net profit margins are what you have left after expenses and income. The formula for calculating net profit margins is net income divided by revenue multiplied by 100.
Gross profit margins represent the income left over after accounting for the cost of goods. The formula is total revenue minus cost of goods sold divided by revenue multiplied by 100.
Operating profit margins can be found by dividing operating income by revenue and then multiplying that by 100. Operating profit margins account for all activities that are needed to help your boutique operate. Examples include rent, labor, and administration.
What Is Your Marketing Plan?
Now that you know who your customers are, you must decide how to get them to visit your store and make purchases. Your marketing plan will lay out the various ways you will attract customers. Key focus areas for marketing in your successful boutique business plan include your budget for promotion, how to get your advertisements in front of the right customers, how you will portray the product, and how you will track results.
Marketing plans can be structured to include an executive summary, target markets, products and services, distribution channels, competitive profile, and action plans.
Who Works for Your Boutique?
If you plan to hire staff, create an organization chart describing each person’s role. You also need to decide how much you will pay them, hourly or salary. Do you prefer hiring several part-time employees or one salaried employee?
Recruiting boutique staff involves thinking like your customers. When you walk into your boutique, what would make the perfect employee? Answer the following:
- Do they get excited about fashion, especially the items in your boutique?
- Can they interact with customers in a friendly manner without being too pushy and overbearing?
- Do they speak the language of your customers?
- Are they coachable?
- Does their appearance reflect the products you sell?
- Are they able to learn new technology, such as point-of-sale systems?
- Are they reliable and trustworthy?
Add to these questions any others you feel are essential characteristics of your employees.
What is Your S.W.O.T.?
S.W.O.T. is a method to analyze your boutique. It can help you create a successful boutique business plan. It starts with examining your boutique’s strengths. Strengths include anything that gives your company an edge over your competition, from longer store hours to location.
Weaknesses should also be examined. Weaknesses are anything that is not necessary or does not provide added value to your business. An example of a weakness is only carrying one line of clothing.
Opportunities may come up that help your business be more successful. In the fashion industry, opportunities may be getting inside tips from your wholesale supplier about new trends.
Finally, threats are the things that could impact your business’s success, such as cost increases in taxes or shipping.
While these tips are not inclusive, they are a great starting point for creating a successful boutique business plan, one you can start today.