Do you want to know exactly how much it cost to start an online clothing boutique? If YES, here is a detailed cost analysis for starting an online clothing store and raising finance.

One of the reasons why the clothing store (boutique) business will continue to thrive is the fact that people can’t do without putting on clothes. People who patronize clothing stores cut across the rich and the poor, the highly placed in the society and the lowly placed; everybody needs clothes to cover their nakedness.

Having provided you with a:

  1. Boutique Industry Overview
  2. Market Research and Feasibility
  3. Online Boutique Business Plan
  4. Online Boutique Marketing Plan
  5. Online Boutique Name ideas
  6. Clothing Store Licenses and Permits
  7. Cost of Starting an Online Boutique
  8. Clothing Store Marketing ideas

We will consider how much it cost to start an online clothing boutique from scratch including the operating costs.

  • Industry Overview

The clothing store (boutique) industry comprises of small retail stores that sell a limited range of clothing and accessories. Clothing stores (boutiques) can be strictly designer based (i.e. only one designer’s collection is sold there), or they may sell a mix of designers’ labels (brands) that specifically cater for the local market.

Players in the Clothing store (Boutiques) industry are defined as having only one location and typically focus on providing high-end or niche products for consumers. Changing fashion trends and of course consumer well being is essential to industry growth because products are generally more expensive and rely on consumer discretionary incomes.

As a result, the start of the recession and its lasting effects on the US economy hurt industry performance. Per capita disposable income fell as many individuals lost their jobs; accordingly, consumer confidence plummeted and consumers cut spending, causing the industry to contract in 2009.

The clothing store (boutique) Industry revenue has since recovered; however, the industry is facing more stringent competition than ever before because of the rising number of imports and consumers’ shift to online shopping.

Over the years, clothing stores (boutiques) have experienced tremendous growth in all cities in the United States of America and in most parts of the world. In response to the ever-growing demand for clothes and other fashion accessories, clothing store owners have opened additional stores thereby creating chains of stores across different cities. They are always ready to expanded into new markets and of course adapt to the ever-changing trend in the fashion industry.

Over and above, the clothing store (boutique) industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale in a street corner like the average mom and pop business or you can choose to start on a large scale with several outlets (chains of stores) in key cities.

How Much Does It Cost to Start a Clothing Store?

When starting a clothing store business just like any other similar business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profit, grow the business and perhaps expand the business beyond one location to other locations within your country and other cities in the world.

When conducting costing and economic analysis for your clothing store business, you just have to critically examine these key factors; place, product, pricing and promotion. As a matter of fact, you would have to review these key factors at regular intervals while running your clothing store business. As a clothing store business owner, you just have to have a proper grasp of your competitive landscape.

Clothing store owners should also know that running their own single clothing (independent clothing) is different from managing or operating a clothing store chain or franchise. Managing or operating a clothing store chain or franchise attracts additional impediments like incentive alliance, bureaucracies, growth strategy, operational guidelines et al.

It is important to note that the cost of clothing and other fashion accessories is one of the most important factors contributing to the overall cost of a clothing business and should be considered as a major factor when carrying out your costing and economic analysis.

Over and above, the cost analysis as it relates to starting a standard clothing store business in the United States of America, Canada, United Kingdom and Australia can be said to be almost the same except for few variations. For example, the cost of purchasing designers’ clothes and fashion accessories from international brands are same especially when bench–marked against the US Dollars.

Other factors that may be slightly different in terms of costing when it comes to starting a standard clothing store business in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, promotion and branding cost, rent/leasing amongst other factors.

Over and above, when it comes to starting a medium scale clothing store business, you should be prepared to either rent or lease a standard and centralized shop facility with good human and vehicular traffic; this is going to be one of the areas where you are expected to spend the bulk of your start–up capital.

How Much Does It Cost to Start a Clothing Store in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard clothing store business in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Retail software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the clothing store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard store facility in a good and centralized location – $200,000.
  • The cost for remodeling the store facility and construction of shelves and racks – $100,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory (stocking with a wide range of clothes, shoes, trousers, pants, caps, belts and other fashion accessories from both local and international fashion designers, hangers, pegs, mannequins et al) – $200,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost for the purchase of furniture and gadgets (computers, printers, telephone, fax machine, flat screen TVs, sound system, tables and chairs et al) – $14,000.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of seven hundred and fifty thousand Dollars ($750,000) to successfully set up a medium scale but standard clothing store business in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the capacity of opening other outlets within a short time frame.

Starting a small scale but standard clothing store business with a small store facility and limited stocks per time in the United States of America will cost about fifty thousand dollars to one hundred and fifty thousand dollars ($50,000 to $150,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a clothing store operating in just one location.

When it comes to starting a standard and large scale clothing store business with several outlets in key cities in the United States of America, a clothing store business with the intention of selling franchise, then you should look towards budgeting well over two million dollars ($2 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Clothing Store in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard clothing store business in the United Kingdom;

  • In the United Kingdom, Online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit,Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – £13,300.
  • Marketing promotion expenses for the grand opening of the clothing store in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring a business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – £28,400.
  • The cost for leasing a standard store facility in a good and centralized location – £187,000.
  • The cost for remodeling the facility and construction of shelves and racks – £95,000.
  • Other start-up expenses including stationery (£300), phone and utility (gas, sewer, water and electric) deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000.
  • The cost for start-up inventory (stocking with a wide range of clothes, shoes, trousers, pants, caps, belts and other fashion accessories from both local and international fashion designers, hangers, pegs, mannequins et al et al)- £195,500.
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500
  • The cost of purchase and installation of CCTVs – £4,500.
  • The cost for the purchase of furniture and gadgets (Computers, printers, telephone, fax machine, flat screen TVs, sound system, tables and chairs et al) – £20,500.
  • The cost for building and hosting a website – £600.
  • The cost for opening party – £6,300.
  • Miscellaneous – £8,000.

You will need an estimate of seven hundred and thirty thousand Pounds Sterling (£730,000) to successfully set up a medium scale but standard clothing store business in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the capacity of opening other outlets within a short time frame.

Starting a small scale but standard clothing store business with a small store facility and limited stocks per time in the United Kingdom will cost from forty-five thousand Pounds Sterling to one hundred and forty thousand Pounds Sterling (£45,000 to £140,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a clothing store operating in just one location.

When it comes to starting a standard and large scale clothing store business with several distribution outlets in key cities in the United Kingdom, a clothing store business with the intention of selling franchise, then you should look towards budgeting well over one million, eight hundred thousand Pounds Sterling (£1.8 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Clothing Store in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard clothing store business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means).
  • Legal expenses for obtaining licenses and permits (Health department license and business license)and permits (Fire department permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Retail software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the clothing store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard store facility in a good and centralized location – $200,000.
  • The cost for remodeling the store facility and construction of shelves and racks – $100,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory (stocking with a wide range of clothes, shoes, trousers, pants, caps, belts and other fashion accessories from both local and international fashion designers, hangers, pegs, mannequins et al) – $200,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost for the purchase of furniture and gadgets (computers, printers, telephone, fax machine, flat screen TVs, sound system, tables and chairs et al) – $14,000.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of seven hundred and fifty thousand dollars ($750,000CAD) to successfully set up a medium scale but standard clothing store business in Canada. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the capacity of opening other outlets within a short time frame.

Starting a small scale but standard clothing store business with a small store facility and limited stocks per time in Canada will cost from fifty thousand dollars to one hundred and fifty thousand dollars ($50,000CAD to $150,000CAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a clothing store operating in just one location.

When it comes to starting a standard and large scale clothing store business with several outlets in key cities in Canada, a clothing store business with the intention of selling franchise, then you should look towards budgeting well over two million dollars ($2 millionCAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Clothing Store in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard clothing store business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Retail software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the clothing store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard store facility in a good and centralized location – $200,000.
  • The cost for remodeling the store facility and construction of shelves and racks – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility(gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory (stocking with a wide range of clothes, shoes, trousers, pants, caps, belts and other fashion accessories from both local and international fashion designers, hangers, pegs, mannequins et al) – $200,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost for the purchase of furniture and gadgets (computers, printers, telephone, fax machine, flat screen TVs, sound system, tables and chairs et al) – $14,000.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of seven hundred and fifty thousand dollars (AUD$750,000) to successfully set up a medium scale but standard clothing store business in Australia. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with the capacity of opening other outlets within a short time frame.

Starting a small  scale but standard clothing store business with a small store facility and limited stocks per time in Australia will cost from fifty thousand dollars to one hundred and fifty thousand dollars (AUD$50,000 to AUD$150,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a clothing store operating in just one location.

When it comes to starting a standard and large scale clothing store business with several outlets in key cities in Australia, a clothing store business with the intention of selling franchise, then you should look towards budgeting well over two million dollars (AUD$2 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Estimating Start-Up Cost for Clothing Store Business Based on the following factors;

  • Specific Location

The fact that there are different sizes and niche areas as it concerns clothing stores does not mean that clothing store business can thrive in every location. Before choosing a location for your clothing store, ensure that you conduct thorough feasibility studies. The possibility of you coming across a clothing store that just closed shop in the location you want to start your clothing store business can’t be ruled out. This is why it is very important to gather as much facts and figures before choosing a location to set up your business.

It cannot be overemphasized that the location you chose to open your clothing store business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power, secured and with enough parking lots.

If you make the mistake of renting or leasing a facility for your clothing store business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.

  • Staff/Manpower

When it comes to starting a standard clothing store business on a large scale, you would need the services of the following professionals;

  • Chief Executive Officer (Owner)
  • Store Manager
  • Information Technologist
  • Human Resources and Admin Manager (May also double as Franchise Manager)
  • Accountant/Cashier
  • Merchandize Manager
  • Marketing and Sales Executive
  • Cleaners
  • Security Guard

Can a Clothing Store be Bootstrapped on a Lean Budget Right from Home?

Clothing store business is one of many businesses that despite the fact that it can be started with a relatively lean budget, it can’t be operated from the home. This is because you would not want people to continue to knock at your door and invade your privacy just because you want to sell clothes and other fashion accessories to them. As a matter of fact, it is a security risk and you are likely not going to get clearance from the regulating department in your city.

Although in some countries, you can successfully launch a small scale clothing store in your front yard or garage. With that, you can indeed bootstrap your clothing store on a lean budget within your residential apartment. Just ensure that you consult the required authority in your city to be sure you secure a permit to run a business in a residential area.

How Much Does It Cost to Buy a Clothing Store Franchise?

In the United States of America, the Average Cost of Purchasing a Clothing Store Franchise is $50,000. Examples of 3 Well – Known Clothing Store Franchising Companies in the United States of America are;

  • Big Frog Custom T-Shirts & More
  • Apricot Lane Boutique
  • Bellies to Babies Franchise

In the United Kingdom, the Average Cost of Purchasing a Clothing Store Franchise is £45,000. Examples of 3 Well – Known Clothing Store Franchising Companies in the United Kingdom are;

  • The Zip Yard
  • Celopman
  • Suit the City

In Canada, the Average Cost of Purchasing a Clothing Store Franchise is $50,000 (Canadian Dollar). Examples of 3 Well – Known Clothing Store Franchising Companies in Canada are;

  • Great Canadian Dollar Store
  • Mainstream Boutique
  • Once Upon A Child

In Australia, the Average Cost of Purchasing a Clothing Store Franchise is AUD$60,000. Examples of 3 Well – Known Clothing Store Franchising Companies in Australia are;

  • Big Frog Custom T-Shirt& More
  • Hip Pocket Work Wear & Safety Group
  • Nicholby’s Franchise Systems Inc

Sourcing for Finance for Your Online Clothing Boutique

If you want to start an online retail clothing store, one of the reasons why you probably would have chosen this form of business is to escape some of the cost involved in running bricks and mortar boutiques et al. It is pretty much cheaper to run an online retail clothing line as against running a conventional boutique. So you may not have to break the bank to source for start – up capital.

No doubt when it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor yourself before convincing your bank, investors and your friends and family members to invest in your business.

Here are some of the options you can explore when sourcing for start – up capital for your online retail clothing store business:

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for loan from your bank / banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.