Clothing retail is an old and profitable retail business idea. You can see clothing shops everywhere. Do you want to open a clothing store and need financing to get started? Do you want to create a clothing retail kiosk in mall? Before you start, you want to identify the potential of your catchment area before setting up your store? Do you want to find out when you will be able to pay yourself your first salary?
Now is the time to carry out your business plan, which will allow you to refine and start your clothing store project.
However, you don't know where to start? And you are wondering how to carry out your market research? What figures to put in your financial forecast?
Here's what to guide you!
Before starting to write your clothing store business plan, you will have to analyze the sector in which you are launching but, above all, verify the relevance of the choice of the location of your future store.
First of all, study the textile sector in France to fully understand how it is evolving. If you want to get into the women's ready-to-wear industry, the figures for the 1st half of 2015 from the women's ready-to-wear federation will be helpful to you. Also, note that franchises primarily drive the ready-to-wear market in France.
You will also have to identify and analyze those you consider to be your competitors: what do they offer that is different from you, what clientele are they targeting and how do they target clients, what is their approach in terms of price?
All of this data is essential to understanding your competition and how you will stand out from them. Get help from a student association if you can't come to all of these stores in person, but observing what your competition is doing will teach you a lot. And that will help you in the future.
Studying customers is also a significant aspect of your market research: what target you target (age, gender, location, level of income, etc.). What are their expectations and their ways of buying clothes? And This is what you are going to have to determine.
The business plan is an essential document when you want to open a clothing store. It is a reference document that will be presented to banks in particular to obtain financing.
Schematically, it consists of two parts:
The editorial part: your activity project
This descriptive section covers various chapters: summary of the project, presentation of the offer, analysis of the competitive environment, the definition of objectives, presentation of your strategy, presentation of the management team, and legal aspects of your storage project.
The financial part: the financial forecast
This part is, in fact, the encrypted translation of the editorial position. The objective of this part is simple: it is a question of evaluating the need for initial financing and demonstrating the potential profitability of the project and its sustainability at the financial level.
At this level, the objective will first be to develop a realistic financial forecast.
The turnover of your store will, of course, be one of the critical criteria to study. To evaluate it, you will need to estimate the average shopping basket of your customers and then multiply it by the number of customers expected in the store.
You will need to rely on your market research and the observations collected in the field for this. You will have to estimate how many people will pass in front of your store and evaluate the average conversion rate, that is to say, the number of people. Who will walk through your door and become a customer? The volume of business will also be significant - the margin being at the heart of your business.
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Evaluate your gross margin
The gross margin corresponds to the turnover less the cost of purchases of the products sold. It is a crucial indicator for your store. Indeed, the more the gross margin is limited, the more you will have to sell clothes to pay your fixed costs.
Be aware of fixed costs.
The fixed costs of a clothing store mainly include salaries (yours and that of your salespeople), rents and expenses related to your premises (electricity, insurance), as well as administrative costs (accounting, etc.). If your fixed costs are too high, they can put your store in the red. Evaluate them well from the start to avoid unpleasant surprises.
Don't underestimate communication.
Communication is essential to make yourself known when launching your activity: buying space in local newspapers, direct marketing operation, etc. But communication is also necessary to retain your customers over the long term. Have a good strategy to promote your clothing line and your store.
Take seasonality into account.
When you choose to open a clothing store, you should know that you will be subject to varying degrees of seasonality depending on the type of clothing you sell in your store. You have to remember to take this seasonality into account in your clothing store business plan because it will significantly impact your cash flow.
When you decorate a clothing retail store, choose the right store fixtures is very important. You can not just put some display racks or shelving stands there and open your store; the level of the retail fixtures not only helps you organize the whole shop and stands for the product level and presents the product quality.
Therefore, we should choose the right store fixtures and display racks and perfectly accommodate our clothing items.
Ant Display is a leading clothing shop fixtures manufacturer integrate into clothing display for several years; Whether you need stainless steel clothing racks or need an industrial pipeline display system, we have the best work for you. Our design team helps you create the full shop 3D design with full store fixtures applied so that you can choose the perfect shop furniture to display the clothes in the best way!