A boutique located in a high human and vehicular traffic location in a cosmopolitan city will make on the average between $120,000 to $550,000 annually. Retailowner.com tracks the benchmarks of various USA retail businesses including boutiques and they came up with benchmark gross profits of around 20 percent and net profit of around 2 percent for convenience stores

Whenever any entrepreneur wants to start a new business, one of the first questions they usually ask is how much they are likely to make on the average daily, weekly, or yearly from the business. This narrative also applies to entrepreneurs who are looking towards starting a boutique business.

They would want to know how much they are likely to make daily, weekly, monthly, and annually from their boutique and of course, the profit margin they should be expecting from their investment. The truth is that there is no one mold-fits-all when it comes to how much a boutique owner is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average boutique makes yearly.

Factors That Determine How Much An Average Boutique Makes

  1. The Size of the Boutique

One cannot conveniently state the amount a boutique is expected to make yearly if you do not know the size of the boutique. The amount a small roadside boutique is expected to make annually will be different from the amount a standard boutique franchise with several outlets will make annually even if they operate in the same location.

Of course, the amount invested in a small roadside boutique will be different from the amount invested in a large boutique hence the amount they will both make will be different. On average, the approximate cost of starting a boutique could be anywhere between $5,000 and $500,000 depending on what you want to achieve.

  1. The Location of the Boutique

When it comes to setting up a new business, location plays a major role which is why feasibility studies and market surveys are essential before settling for a location. Usually, if your boutique is located in an area with good human and vehicular traffic, you may not have to struggle to get people to visit your boutique and make a purchase.

Please note that the amount a boutique that is located in a low traffic area will make yearly will be far lower when compared to the amount a boutique that is located in a high–traffic area in a cosmopolitan city will make. So, if you want to make it big with your boutique business, then you must be ready to rent a store in a high traffic area, a location with the right demography of people with the purchasing power to buy from you.

Please note that you are going to be paying more to rent a store in a high–traffic area as against the rent you are expected to pay in a low–traffic area.

  1. The Brands of Clothes and Other Fashion Accessories Retailed in the Boutique

Another important factor that will determine how much a boutique is expected to make yearly is the brand of clothes, shoes, and fashion accessories that are retailed in the boutique. Ideally, if you run a boutique that only retails high-end clothes, shoes, and other fashion accessories from top-rated designers like Coco Chanel – (CHANEL), Ralph Lauren – (Ralph Lauren Corporation), Tom Ford – (TOM FORD), etc, you are likely going to make more profits even though you are expected to spend more in stocking your boutique.

  1. Other Related Products and Services Offered by the Boutique

Aside from retailing a wide range of clothes, shoes, and other fashion accessories in your boutique, if you offer additional services such as online boutique, fashion consulting and delivery services, you will earn far more than an average boutique that retails limited style and brands of clothing, shoes and other fashion accessories.

  1. The Management Style of the Boutique

Another key factor that will determine the amount a boutique is expected to make yearly is the management style of the boutique. Trust me, the results you will get when you have a good manager will be far greater than what an average or bad manager will get even if you give the managers the same conditions to work and the same products to retail.

  1. The Business Model of the Boutique

There are different business models that a boutique can adopt and this business model offers different results. For example, the amount a boutique that also runs an online store with deliveries will make yearly will be different from the amount a strictly brick-and-mortar boutique will make yearly. The amount a boutique that also sells and operates a franchise will make yearly will be far different from the amount a strictly one location walk-in boutique will make.

For example, while ZipRecruiter is seeing annual salaries as high as $132,500 and as low as $17,000, the majority of Online Boutique salaries currently range between $26,000 (25th percentile) to $53,500 (75th percentile) with top earners (90th percentile) making $114,500 annually across the United States. This goes to show that the profits a boutique will make yearly is dependent on the business model of the boutique.

  1. The Advertising and Marketing Strategies Adopted by the Boutique

Another key factor that will determine the profit a boutique can make yearly is the advertising and marketing strategies adopted by the boutique. A couple of advertising and marketing strategies can help a business increase its earnings, but you may be expected to spend more.

But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a boutique that is engaging in aggressive advertising and marketing to make the same amount yearly as a boutique that is passive with its advertising and marketing.

  1. The Number of Years the Business is in Existence

In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is properly managed. This is because you would have over the years won loyal customers.

For example, in your first fiscal year (FY1) you might make a hundred thousand dollars ($120,000), in your second fiscal year (FY2) you might make two hundred thousand dollars ($200,000) and in your third fiscal year (FY3) you might make two hundred and fifty thousand dollars ($250,000).

Interestingly, most businesses including boutiques usually break even from their third year of operation. Usually, a small–scale but standard boutique that is located in a high human and vehicular traffic location in a cosmopolitan city will make on the average between $120,000 to $550,000 annually all things being equal.

Profit Margin of a Boutique

The retailowner.com tracks the benchmarks of various USA retail businesses including boutiques and they came up with benchmark gross profits of around 20 percent and net profit of around 2 percent for convenience stores.

To show the range of gross profit margins for a boutique that deals directly with major suppliers or manufacturers of clothes, shoes, and fashion accessories that they retail, you will notice that they operate with a gross profit margin of around 25 percent, while franchise boutiques can operate at a gross profit margin level of around 50 percent depending on the demand for the goods they are retailing.

In conclusion, the mark–up for products retailed by a boutique might not be the same and may be driven by other factors that are unique to the business environment.

Solomon. O'Chucks