If you like fashion and want to set up your own business, opening a clothing store is the best option. However, this is not easy. Starting a business requires careful thought and planning. Start by determining the target market and the characteristics of your store. Then, look for a strategic location. Take all costs into account and seek out a beginner entrepreneur-only loan if necessary. Market your business online to increase sales. Finally, make a massive store opening event to start your business.
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Method 1 of 4: Analyzing the Market
Step 1. Define your target market
Your target market determines almost everything in your store, from the products you sell to the location of the store. Start by thinking about who you will be selling your product to. Then, use those thoughts to make other decisions about your store.
- Think from the most common. Do you want to sell products to men or women? After that, start thinking specifically. Think about the age, occupation, and fashion you want to market to.
- For starters, start with what you know. If you've ever worked in a shop selling suits to business people, you'll know the market. Consider going into a field that matches your experience.
- Find out what allows you to make a lot of money. Suits may not be much sought after in a small town. However, the city can be flooded with tourists in the summer. If so, you should open a clothing store for tourists.
Step 2. Find out the best location for your store
Location is one of the most important things in starting a business that you should take care of. So, do a detailed market analysis. Look for locations that are frequented by pedestrians according to your target market. Observe where the shops selling similar items are located. Small business premises are usually clustered within a block to attract as many customers as possible. So, the location may have been specially prepared for you.
- Don't look for locations that are too close to similar shops. If there are many small clothing stores in the selected area, the target market may be oversaturated. Consider looking for another location.
- If you sell products to tourists, for example, position your shop near a tourist attraction.
- To get the attention of pedestrians, open a shop near restaurants and coffee shops. Locations that people frequent can bring in a lot of unexpected customers.
- Find out how much it costs to rent a store in the area of your choice. This will cost a lot. So, do not ignore the cost of rent at the beginning of planning.
Step 3. Look for product characteristics in your store
Big malls offer sale of branded goods at low prices. Your store will not survive if you follow such a business model. Think about what could be the difference between your store and other large competitors and small businesses. Sell a product that isn't in the mall, or develop something that can't be found in the area around the store.
- One good strategy is to sell products made by local artisans. This will give a different “taste” to the products in your store that cannot be found in malls.
- There may be many unbranded boutiques in your town, but no specialty baby clothing stores. This can be a good hallmark.
Step 4. Create a backup plan in case your business turns out to be a failure
Remember, starting a business is taking risks and there are many small businesses going bankrupt. Don't let this fact scare you, but also have a backup plan in case your attempt fails.
- Provide a reserve fund to live for 6 months so that you can just in case you need to find a job.
- Keep in mind that clothing stores usually have smaller profit margins than other businesses. Get into this industry because you really like it and want to work with people. This desire will help you receive smaller profits.
Method 2 of 4: Financing and Setting Up a Business
Step 1. Determine your total operating costs
Find out how much money is needed before opening a shop. If you don't take everything into account, your store is likely to fail. Operating costs, also known as fixed costs or fixed costs, are costs incurred on a regular basis to keep a store operating. Record all expenses that must be incurred each month. The final result of this calculation is your total operating costs.
- Common things for operational purposes are rent, utilities, insurance, and telephone/internet connections. If you take out a loan, the installment fee must also be included in operating costs.
- In general, the cost of renting a store should not exceed 6% of your annual profit. Keep this in mind when calculating business costs. If the rental price is Rp. 20 million per month, in a year you need Rp. 240 million. This means, in a year you have to earn a gross profit of IDR 400 million to comply with the recommendations above. If you can't make that much profit, look for a cheaper place to rent.
Step 2. Calculate the cost of inventory and labor costs
These costs are referred to as variable costs because they change every month. For example, you could limit purchasing supplies or hire fewer people to keep the store open. Calculate how much it will cost to purchase product inventory and hire employees. Then, combine the results with other available variable costs.
- Some other variable costs include advertising and marketing costs because you don't actually have to do any of these things to keep operating.
- Add up the variable costs and fixed costs to get an estimate of the overall cost or profit that you have to make each month so you don't go bankrupt.
Step 3. Create a business plan
A business plan is very crucial because it will help you focus, as well as convince potential investors who will finance your business. Compile a comprehensive description for your business by including the products you want to sell, operational plans, and the total costs required. Be prepared to explain this plan to potential investors.
- Start by describing your business specifically. What products will be sold and who will buy them?
- After that, clarify how you went into the market. Explain the market analysis you have made and how you stand out from the competition.
- Finally, calculate the total costs, both total costs and variable costs. Then, explain how much money is needed to start a business.
Step 4. Register the business entity legally
While not mandatory, there are many advantages to doing so. Establishing a business entity will differentiate business and personal financing so that your personal money remains safe. Merchants, manufacturers, and lenders usually prefer to work with authorized companies rather than individuals. Apart from that, you can also declare business expenses and get tax write-off rights as a business owner.
- The most common business entities are Limited Liability Companies (PT) and Limited Partnerships (CV). Most small businesses use CV entities that don't involve a lot of people.
- Get an official business license where the store operates. If you don't want to do the paperwork yourself, hire a lawyer or have another business take care of it for you.
Step 5. Apply for a capital loan or find a private financier
If you don't have enough capital to open your own shop, seek financing from a bank or financier. Apply for a small business loan from a local bank. If the bank does not provide sufficient funds, a financier can be the best option. Remember that financiers usually want to earn more than banks. They may want to take over part of your business to make loans.
- The loan amount depends on the total cost of your business. Experts recommend that you provide funds to open a shop for 6-12 months as it usually takes several months before starting to make a profit.
- In general, the costs required to open a small shop range from IDR 500 million to IDR 2 billion, or even more.
- Better excess capital than shortage. Most small businesses fail in their first year because they don't have enough capital.
Method 3 of 4: Managing Inventory and Hiring Employees
Step 1. Contact the supplier of goods to order a number of products
With a business plan and costing guide, get started filling your store. Look for the supplier or manufacturer of the item you want to sell. Choose the best product at the right price, then order according to the amount of inventory needed.
- Buy items in bulk to save costs. However, don't order more inventory than your sales target. If you spend all your capital on a product, you may not be able to afford other expenses.
- Contact the manufacturer directly rather than buying it at a wholesaler.
- Trade shows are a great place to find cheap wholesale goods.
Step 2. Sell local artisan products to make your shop stand out
Small shops are part of the community. The best way to be known in the community is to empower local artisans. Contact local jewelers, artists, and dressmakers to ask them to supply products to your store. This will give you the supplies you need as well as be a great marketing tool.
If there's no room for local produce in the store, organize a special monthly event to showcase local produce. For example, you could pitch a tent in front of a shop and ask local artisans to showcase their products there
Step 3. Find employees if necessary
The number of employees required depends on the size of the store. Ideally, 1 full-time employee and 1 part-time employee are required to take care of the 93 square meter area in the store. Think about how much work you can do on your own. Then, recruit as many employees as needed.
- Find at least one employee who can manage the store when you can't come. You never know when an emergency situation arises or when you will get sick. So, find someone who knows how to run a store.
- Remember that every employee you hire will add to your expenses. Make sure you only hire the people you need.
- If the hours in your store are irregular, adjust the number of employees according to the season. If you open a tourist-only store that is only busy during the holiday season, you don't need a lot of employees during the peak season.
Method 4 of 4: Marketing Your Business
Step 1. Create a store opening event
After all your hard work, make a bold move by hosting a grand opening event. Invite everyone you know and advertise the event across town. This is the perfect moment to show your shop to everyone and make it widely known.
- Give a special offer on opening day to show everyone the quality of your product.
- Invite local media to come to the opening ceremony. This will give you the opportunity to advertise for free.
- Invite the mayor or local politician to get more attention.
Step 2. Use social media to advertise
Social media offers a powerful low-cost advertising solution. First of all, create a custom account of your store on all the famous social media channels. After that, start advertising on those sites to get everyone's attention.
- Since your business has a physical location, target ads to people within 10-25 kilometers of your location. Advertising the shop to people 200km away is a waste of advertising budget.
- Update all your social media accounts regularly. If you haven't posted anything to Facebook in 6 months, people will think your shop is closed. Schedule at least 1 post per week for each of your social media accounts. Also, make big announcements, such as discount parties, across all your accounts and websites.
- Remember that advertising costs money. Calculate advertising costs carefully so as not to go over the budget.
Step 3. Participate in nearby events and festivals
Most communities have events to showcase local businesses. Make an effort to attend these events as often as possible to promote your business. Bring samples and products to sell so people can see what you have to offer.
- Bring lots of business cards when attending these events. Share your store's business card with everyone there.
- Visit the nearest small business empowerment office to find the schedule for the event. Attend as many scheduled events as possible.
- Do not leave the shop unattended or close the shop while attending an event elsewhere. Have your best employees run the store while you're away.
Step 4. Sell your products online to reach more customers
Websites like Amazon and eBay offer great opportunities for small business owners. If you only focus on selling conventionally, you will miss out on a huge potential to get more customers. Create an account in one or more online marketplaces to sell your products. This is a powerful way to attract more customers and increase profits when business is down.
- Pay attention to the quality of online sales. If you are known to have bad service, your account may be deleted from the website.
- Include your online store link on all your store's social media channels.
- Keep in mind that all online stores require you to pay a certain fee. Find out what costs are asking, then adjust the price of your product so you don't lose.
