How to Start a Boutique Business
What comes to mind when you think of a boutique business?
For most of us, we think of an upscale women’s fashion store. If you’ve shopped there before, the knowledgeable employees know your name, your style, and what size you wear. The customer service is excellent, and they add a personal touch to everything. They make you feel good.
This is certainly a good example of a boutique business, but in today’s market, the definition of a boutique store goes much further than high-end women’s clothing.
Today, a boutique store is a business model and can be applied toward any niche market – from fashion to home goods, or even photography, pet supplies, wine stores, restaurants, and spas. The boutique business model crosses over a lot of industries.
What exactly is it that sets a boutique business apart from the rest?
In the example above, the thing that stands out the most is the customer service and the personal touch. It’s an extremely specialized business that will never cut corners just to save a few bucks, and will not sacrifice the customer experience for any reason.
The boutique business uses over-the-top customer service in order to leave a lasting impression on customers and keep them coming back. This model does not compete on price, but rather, is competitive because of the outstanding customer experience. It’s unique and distinct, with premium prices.
Sound right up your alley? Are you organized and passionate? Are you ready to start your own boutique business?
Here are the steps you can take to start your own boutique business.
Find Your Niche
First thing’s first, you need to decide what to sell. Be specific here. Boutique businesses tend to have a unique niche that they settle into, and they don’t stray away from it. If you plan on selling designer women’s clothing, don’t carry handbags, jewelry and children’s clothing. If you’re selling wine, don’t carry a bunch of cheap knick-knacks. A spa? No slippers or beauty supplies.
The idea is that you hone down your inventory to products, styles, or services that are very particular. You’re not there to provide something for everyone; that’s not what a boutique store does. That’s a department store.
Ideally, your chosen niche will be something you’re passionate about – something you can’t get enough of – because, let’s face it, your life will be revolving around it. Your passion and love for your chosen industry will translate through to your employees and to your customers, which is the kind of soul that true boutique businesses should embody.
Once you find your niche you can figure out the type of customer to which you will be marketing. Knowing this will help you make decisions on when, where, and how you will be implementing your marketing strategies, who you will be ordering your wholesale products from, as well as narrowing down a prime location for your store.
Figuring out this information this early in the process will aid in taking the next step: writing the business plan.
Before you go running in the other direction, hear us out.
The Business Plan
Sure, writing a business plan sounds scary. But in reality, it’s not that bad, it doesn’t take as long as you think, and it’s a helpful tool to keep you organized and on track. That’s not to mention businesses that have a plan grow 30 percent faster than businesses that don’t have one.
You’ve heard it before, but it bears repeating: A business plan is an important part of any business. It allows you to map out your business and develop your brand, as well as create the steps that you need to take in order to find success. Having a roadmap will help keep you on track.
Business plans don’t have to be lengthy. If you have no need for investors or bank loans, then a shorter “leaner” plan will do. But if you need capital in order to start your business, then a more formal business plan is likely necessary.
One of the perks of writing a business plan is that it forces you to really look at your financial analysis and ongoing expenses. This is where you will be able to do the research and development and figure out whether or not your boutique business has what it takes to survive in the long run. You will have to consider the costs of opening the store, renting or purchasing space, monthly utility cost, tenant improvements and furnishings, signage, graphic design, etc.
Furthermore, you can start to plan your inventory, find wholesale suppliers, and develop marketing strategies. You have the opportunity to get to know who your competition is, who your customers are, and the demographics of your community, all before launching your store. Doing this will give you the necessary tools you need to be ready to serve your customers and start making sales.
We won’t go into all the specifics of writing a business plan for your boutique business, but you can check out this business plan template from Shopify to get started.
Choosing a Business Structure
Getting into the nitty-gritty of the legal aspects of your business can be confusing or overwhelming. The information found on this page is not meant to take the place of any professional legal advice. We highly recommend seeking the guidance of a lawyer in your state before deciding on how to structure your business.
Sole Proprietorship: The simplest form of business structure, the sole proprietorship allows you to report your business’ earnings on your personal tax documents. You will probably still need to register your business name as a “Doing Business As” (DBA) and make sure to obtain and pay all of your state’s licensing requirements and fees. And luckily, you do have the ability to hire employees as a sole proprietorship; however, this may differ based on your state. The downside to this business structure is that if your business is sued, your business as well as your personal assets may be at risk.
Limited Liability Company (LLC): Establishing an LLC makes your business a separate legal entity from you, so if legal action is taken against your business, your personal assets are less likely to be in jeopardy. In general, there are additional filing fees and ongoing fees associated with forming an LLC, and filing your taxes will work differently than as a sole proprietorship because an LLC is a separate legal entity.
C Corporations: Like an LLC, a C Corporation is a separate legal entity from the business owners. This corporation is made up of shareholders, who are the legal owners of the business; however, it is technically the corporation as a whole that owns the business. Shares can be bought and sold publicly (i.e., on the stock market) with relative ease. These shareholders don’t have anything to do with the day-to-day operation of the business, but will sometimes have the ability to elect directors to do so. As you can probably tell, this structure is fitting for large-scale operations and is subject to much higher tax rates.
S Corporations: Very similar to the C Corporation structure, the S Corp is set up as a corporation in the eyes of the IRS, but may have some tax advantages over the C Corp structure. S Corporation shares cannot be bought or sold publicly, making it difficult for shareholders to exit the business.
Most boutique businesses will operate under a sole proprietorship or an LLC, but with professional legal guidance, you can make the final decision on how you want to structure your business.
Important, yet often underutilized, seeking guidance from other professionals and small business centers can be helpful.
There is growing evidence that finding a mentor can help you become successful and survive longer. According to a survey done by The UPS Store, small businesses that receive mentoring are twice as likely to survive beyond the five-year mark than those that do not receive mentoring.
A mentor will bring experience and knowledge that you’ll never be able to find in a book. They’ve been there, done that, and it’s the “done that” part that will be most valuable to you. Having somebody who is experienced in entrepreneurship will help you avoid detrimental mistakes and give you some reassurance if things are going a little rough. The encouragement and self-confidence boost you get from knowing that someone has your back will help get you through the tough times.
Finding a good mentor means that you have someone to bounce ideas off of. It’s someone to show you the ropes and help you untangle yourself should you tie yourself in knots. They will also help you avoid making decisions based on emotions and offer a voice of reason so that your emotions don’t get the best of you.
You can seek guidance at your local small business development center. These centers exist in every state and can offer advice and guidance during every step of creating your business, from writing your business plan to acquiring capital. They may be able to give you resources for special funding programs or supply you with contact information for other forms of help. They also have an online learning center with free resources.
Build Your Brand
This is the fun part. The part where you get to daydream and let your imagination run wild. This is the part where many of us start, because, well, it’s fun.
However, building your brand is an incredibly important process.
Have you ever heard the saying, “first impressions last a lifetime?” First impressions are made quickly, and for the sake of your business, it better be a good one.
The branding of your boutique business is the first thing that people will see, and it can make or break your business.
While this part is fun to do in the beginning stages, you can’t truly build your brand until you have a business plan and an idea of where you’re going to be located. You’ll also need to know your budget and the demographic that you’re marketing to.
Imagine your ideal customer – how they look, how they talk, what they wear, and what they do for a living. You can get really specific here because, the more you know about your customer, the better you’ll be at creating a brand that they can’t resist.
Do you know some brands that embody exactly what you want? Good. Research them. Look at their Instagram feeds and websites, and pay attention to the details. Don’t copy them, but you can get some great ideas and inspiration from looking at other brands. What color schemes do they use? Do they embody a minimalist style or something more ornate? Are their photos fun and flashy or serious and monochrome?
Your brand name is important as well. It should fit the style that you’re going for, as well as be easy to remember, simple to say, and something you’re proud of. Would you name a rugged men’s clothing store, “Amy’s Cute Digs?” Probably not.
(If you need some help creating a business name, you can find a business name generator over at Oberlo.)
Your business logo and color scheme play a huge role in the first impression as well. Unless you’re a graphic designer, the homemade logos are best left alone. It is worth your time and money to hire a professional graphic designer for this part.
Don’t Quit Your Day Job (Yet)
It may be tempting to do, but most entrepreneurs open their businesses and keep their 9-5 jobs, at least until their business is able to pay for itself, as well as pay you a living wage. Most of the revenue from your business will be (or should be) reinvested right back into building the business.
This part is hard. It might feel unfair. Not only are you still working your regular job, but you’re also running a business, and that’s a lot of work. But it’s worth it in the long run. According to a study published in the Academy of Management Journal, entrepreneurs who kept their day jobs were 33 percent less likely to fail.
If you have a physical location for your boutique business, you won’t be able to do the customer service part or work behind the counter. That means you have to hire an employee or have a business partner who can tag-team working those hours with you.
Open an Online Boutique
You can open an online store in conjunction with your physical store, or you can have an online boutique in lieu of a physical location.
Below, you’ll find some tips on where and how to set up an online boutique.
- It’s easy to build an online boutique store using a platform such as Shopify. This platform is endlessly customizable and simple to use.
- You don’t have to carry a physical inventory. Services like Oberlo make dropshipping easy.
- However, carrying a physical inventory gives you the opportunity to apply that personal touch that your customers want. It also allows you to double-check the quality of the merchandise before you ship it out the door.
- You still have to decide what business structure you want: sole proprietorship, LLC, or corporation.
- You can run an online store in your spare time without hiring an employee.
- Processing payments is made simple with online platforms like Shopify.