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As has been one of the major themes we have discussed on this platform, starting a boutique does cost money like any other business venture. With the rapid rise in ecommerce technology, the costs of creating a state-of-the-art business has come down tremendously. When it comes to the capital that you need, your online boutique will need to have a budget for inventory acquisitions, working capital, and the ever important marketing budget. In this article, we are going to discuss using private investors for getting the money that you need to start your store. We will address the important issues with private financing as well as addressing common questions about working with an investor.

Where can I find investors?

Admittedly, this is pretty challenging although it has gotten much easier over the past ten years to find qualified financial partners when starting a boutique. Foremost, you can work with established professionals that you know that may be interested in placing private capital with you to launch your operations. Typically, these are people that you already have an established relationship with and have established a certain degree of trust.

If this is not an option for you, then you can use many popular online platforms that will allow you to establish a profile. Major platforms include:

It should be noted that you will most likely need the help of an attorney as you navigate this process. This is due to the fact that certain securities regulations may kick in when you starting to acquire capital from a number of different sources.

You may also be thinking about working with your friends and family to get the funding you need. Later in this article, we will discuss many of the pitfalls that can happen when you work with loved ones in a business venture.

Can I expect to get a loan from an investor?

The chances of getting a loan from a private investor in order to launch an online boutique are limited. This is due to the fact that there are inherent risks when starting any business venture. Most investors will want a certain percentage of your business in exchange for the money that you are seeking. Additionally, the investor may want to have a seat on your board of directors coupled with quarterly financial reports to see how their investment is doing. However, in some cases you can get a loan from an investor. Typically, this involves a much higher interest rate and quicker repayment period. When you are determining what type of financing that you should use for your online boutique then you are going to want to consider speaking with a bank regarding what they can provide you for startup financing. If this is more appropriate for what you are looking to do then you can reference our article about obtaining business credit for starting a boutique.

Do I need a boutique business plan to show to my investor?

There is a 100% chance that the investor is going to want to see a full scale business plan. In this document, you will need to showcase to your funding source how much capital you are looking to raise, how you intend to market your boutique, the fashion and apparel industry, and who you are targeting as your primary customer base. A typically business plan has the following chapters:

• Executive Summary
• Usage of Funds
• Boutique Operations Overview
• Market Analysis
• Marketing Plan
• Financial Plan

The most important sections of the business plan are the marketing plan and financial plan. Any qualified or accredited investor is going to want to understand the anticipated financial results over a three year period. On this website, we have several business plan templates that you can use for this purpose. You can also reference our article about creating a business plan for a boutique.

One of the most difficult aspects of developing this type of document is the financial plan. This is where the vast majority of people get lost as they are unfamiliar with the common terminology associated with a profit and loss statement, cash flow analysis, and balance sheet. Within the financial plan, you are going to need to determine how many apparel pieces you will sell on a monthly basis, the anticipated revenue per item, and the average underlying cost of your inventory acquisitions. This will allow you to determine the anticipated gross profits (sales minus the cost of inventory) that you will receive a monthly and yearly basis. You will also need to have a well defined understanding of your monthly operating costs including storage, marketing, legal/accounting, and other general expenses.

An additional difficult section to complete is the boutique marketing plan. In this section, you will need to thoroughly outline what social media platforms you will use, how you will engage in search engine optimization, and how you will properly position your boutique’s brand within this marketplace. Additional considerations that should be discussed is how you will use third party marketplaces such as Amazon (either through direct sales or the Amazon FBA program), eBay, Walmart, Target, Etsy, and other entities that allow for third party sales.

If you are struggling to create your boutique business plan then you may want to consider using outside help for this purpose. Often a business planning firm can help you organize your thoughts and develop the entirety of the document on your behalf. Fiverr has a number of business plan writers that can assist you with this process.

Do I need to attorney when working with investors for my boutique?

It is highly recommended that you retain the services of an attorney when you are seeking private financing. Foremost, the contract between you and an investor should only be drawn up by a licensed practitioner. There are numerous considerations that will come into play once you begin to actively solicit capital. Additionally, a highly qualified attorney will walk you through many of the common pitfalls that can occur when you are working with an investor. Most importantly, the attorney drafted contract will discuss many of the scenarios that could happen if things do not go as planned. In the long run this will substantially reduce the risks of litigation that may occur if the business does not do as well as planned.

If you are seeking to secure capital from a number of different private investors then you may also need to comply with state and federal securities legislation. Only a qualified attorney can help you to determine whether certain securities regulations apply to you and your capital raising efforts.

In the event that you and your investor are determined to work together to develop the contract then there are a number of resources that you can use online to put this document of documentation together. LegalTemplates.net offers a broad range of fill-in-the-blanks templates that you can use in order to have the necessary contract in place. These templates are made specifically for each state.

Do I need to incorporate before finding investors?

Typically, you do not need to incorporate before finding investors. Of course, once you begin to negotiate with your investor then it will be time to establish your corporation or limited liability company. If you have reached this part of the capital raising process then you are going to need an attorney to assist you with the contract as well as the incorporation process. As an alternative to a lawyer, you can work with a certified public accountant that is local to you for incorporation. You can also use one of the numerous online companies that are available for this purpose as well. Well regarded incorporation services and registered agents include:

Do I need to hire a CPA for this process?

Through the life of your business, you will need a certified public accountant. This is due to the fact, like all businesses, is that you will need to file quarterly and annual tax returns regarding your boutique’s operations. You will also need to file sales tax documentation as well. In any city or town, there are always a number of certified public accountants that can help you with all matters pertaining to your accounting. Your CPA, as mentioned above, can also help you as it relates to completing the incorporation process.

Should I ask for money from my friends and family to start my boutique?

Generally speaking, this is not a good idea. Although it may seem tempting to work with people that you know – if things do not go as planned it may result in fractured relationships. People and money are a strange combination. Let’s consider a scenario. Let’s assume that you work with a friend and acquire an investment of $10,000 to launch your boutique. Now, let’s also assume that the business does not do well. This could ultimately lead to feelings of resentment between your friend. Additionally, since your friend is a part owner in your boutique – they may want to direct the way that you run the business. If you are not making as much money as originally anticipated then they may try to have you spend more money on marketing or engage in business practices that you do not necessarily agree with. Using money from friends and family should be one of the last types of financing that you should consider unless you have no other choice.

On a side note, there is one other topic regarding friends, family, and money. In most instances, a family/friend investor will want a direct equity participation in the business. However, in some cases they may be willing to lend you the money rather than acting as an investor. First, for the same reasons discussed above – if this does not work out as planned – you may ruin your relationship with the person. There is a flip side issue to this coin. If your online boutique is highly successful and you are only required to pay back the loan – this may lead to feeling of jealousy. A loan does not require that you provide any profit to your lender. It simply requires repayment of the principal and interest. Again, this something to consider if you are seeking borrowed capital versus a private investment from people that are close to you.

What the problems I can face when working with an investor?

The primary issue that you may face when working with a private funding source is that you are ceding a certain amount of control over your dream. The funding source is most likely going to be a part owner of your company. With that ownership come certain rights. They are going to be able to examine the financial returns on a quarterly basis and if things are not going as planned then they may have questions about how you are operating the company. As discussed above, it is for these reasons that it is imperative that you have a well written contract that clearly stipulates the level of control or managerial input that a funding source will have for your boutique.

One of the other issues that you may face is when your business takes off and begins to generate substantial amounts of profit. It may be tempting for your funding source to want to sell the business to a third party for a significant earnings multiple. However, you may want to run the business indefinitely. This should be one of the points that is made within the investment contract. Moving forward, you may need to buy out your partner at a predetermined price. Again, planning for these types of issues will save you an immense amount of headache down the road. In the event of a business sale, you may need to have a formal valuation completed, which can come at a very large price.

What else can I do to attract investors for my boutique?

Foremost, you can start as much of the business as possible on your own. If you develop the website, begin a modest social media campaign, and start generating a small amount of revenue on your own then you will be in much better position to acquire capital from a third party. The days of simply having an idea and getting money to build a business are long gone. Additionally, when you bring something tangible to the table – you are in a much better position to negotiate. You will be able to lower the amount of equity that you will need to offer in order to get the investment. If you go through the initial process of starting the business on your own – you may find that you can reinvest the modest profits that come into the business without needing outside capital. You can take a look at our article on how to start a boutique with no money in order to gain insight into the ways that you can start bringing in money without having to make a massive capital investment.

Conclusion

In closing, there are many ways that you can obtain the necessary financing for your boutique. Most importantly, you need to make sure that working with an investor is a right fit for your business. You will also need to consider whether or not the investor or funding source that you are working with is the right person/group to finance your boutique.

One of the most complicated aspects of operating any business is managing the ongoing financial needs of your boutique. This requires ongoing reviews of financial statements including your profit and loss statement, cash flow analysis, and balance sheet. Of special importance for most small business owners is the cash flow analysis. Unlike large corporations that generally have substantial amounts of cash and access to credit – your business may struggle with this matter at the onset of operations. Within this article, we discuss matters that pertain to ensuring that you can remain profitable and cash flow positive.

Hire an Accountant and a Bookkeeper

Let’s talk about hiring a bookkeeper first. Foremost, many business owners will initially operate as their company’s bookkeeper when they launch their business. For the most part, this is perfectly fine as you are not incurring a large number of transactions. As you expand, you may want to hire a bookkeeper. As you will have hundreds to thousands of transactions to manage on a monthly basis (sales and outgoing expenses), it will take a substantial amount of time to tabulate all of these ledger entries. The cost of a bookkeeper is relatively low. There are numerous online services that you can use that can quickly complete this task for you on a monthly basis.

On a side note, it is extremely important that you compile reports on a weekly and monthly basis as you get up and running. This is especially true during the early months of the business where managing your boutique’s cash flow will be the foremost priority. One of the ways that you can reduce the headaches associated with bookkeeping is to continue to integrate state-of-the-art software into your operations. Platforms like Shopify provide a number of tools that compile your sales reports. This is especially important as it relates to filing sales tax reports.

You can also hire a person that will come to your location and manage your books on a face-to-face basis. This may be a good fit if you operate a brick-and-mortar boutique or if you are looking to hire a full-charge bookkeeper. In this capacity, the full-charge bookkeeper acts in an accounting capacity by managing all aspects of your financial statements as well as issuing checks. Whether or not you provide check signing authority is up to you. In most cases, independent full-charge bookkeepers will often keep insurance policies and surety bonds in place.

Beyond your bookkeeper, you will also need to hire a certified public accountant in regards to your taxes. Your taxes, as a boutique owner, are about to get far more complicated. This is especially true if you own a S-corp or limited liability company (LLC) that has elected to be treated as a pass-through tax entity. You will most likely be issued a K-1 that will need to be filed with your personal tax returns. Only a properly qualified certified public accountant can guide you through this process. How and when you file your taxes and compile these reports is dependent on how you have structured your business. These days, the costs of a CPA are reasonable. For small businesses, you can expect an annual fee of $500 to $1,000 for completing your annual tax returns. You may also incur quarterly expenditures as it relates to quarterly filings for sales tax.

Use State of the Art Accounting Software

The complexities of maintaining a small business have become more complicated. Many years ago, people paid for products and services using checks or cash. Now, everyone has credit and debit cards that are tied to their personal and business accounts. It can very quickly get confusing. As such, it is best to use a software suite that will properly account for each transaction that you incur when running your boutique. Most importantly, you can use a software suite that has mobile application functionality so that you can photograph receipts (especially when cash is used). This will allow you to make all of the appropriate deductions that occur. Very popular software suites for accounting include:

• QuickBooks
• Xero
• FreshBooks
• Zoho

Many of these suites allow for integrations of ecommerce software so that online sales that you make will be included in your profit and loss statement without having to manually enter the transactions. You can work with your CPA to determine which type of accounting software is most appropriate for you. Additionally, your CPA can help you set up your accounts so that the profit and loss statement is properly formatted in order to more easily complete tax returns.

Keep Your Personal and Business Accounts Separate

This is probably the most important thing that you can do in order to ensure that your boutique’s finances are kept in order. Many business owners often struggle with keeping a complete division between their business and their personal expenses. In order to keep a clean set of books, you should use corporate credit/debit cards and related accounts solely for your business purposes. Although there are some instances where your business may incur a personal expense (such as a meal that you have with a client), these types of transactions should be few and far between. This business uses the American Express Plum Card in order to manage expenditures. There are numerous benefits for using this card, and it allows for a longer period to pay certain expenditures. It is a great tool for managing your cash flow on an ongoing basis.

It should be noted that your accountant will thank you profusely by keeping your personal and business expenditures separate. In order to better manage your boutique’s financial affairs, you can take a formal salary that is separate for any profits that your business is generating. Your CPA will most likely advise you that you will need to draw a formal salary once your business becomes profitable. The amount of salary that you draw should be discussed with your CPA. There are numerous regulations that guide this aspect of your operations.

From time to time, you may incur a business expense that you paid for personally. If this occurs then you should submit a formal expense report to your bookkeeper or accountant so that you are properly reimbursed for this expense. Again, it shouldn’t happen often.

File Your Taxes On Time!

This is a must. One of the ways to quickly cause major issues with your boutique is to not properly file your quarterly and annual taxes in a timely fashion. This can cause you to owe back taxes, penalties, and interest. Additionally, this will create an immense amount of aggravation and anxiety as you will need to work with taxing authorities in order to remedy these matters. You may also incur the added cost of having to have your CPA or a tax attorney represent you to fix this problem.

Maintain a Working Capital Line of Credit

As a boutique entrepreneur, you will face a cash crunch from time to time. This happens to all small businesses owners through their careers. It can be very stressful. Even for companies that maintain low operating costs, there will be times of slow sales. One of the ways that you can stymie the anxiety that comes with this matter is to maintain a working capital line of credit. In a separate article, we addressed the ways that you can finance your boutique which focused mostly on business loans and obtaining business investment. A working capital line of credit, in practice, is nearly identical to that of a credit card. However, the revolving balance that you are provided is much larger and the interest rate is generally lower. Once you become operational, you can work with a local bank, credit union, or financial institution that will issue you a working capital line of credit that will better help you mange your cash flow needs.

Stay On Top of Problems

As a boutique entrepreneur, you have many tasks to complete. When you start your business, you will be the company’s accountant, marketing strategist, customer service specialist, and every other title within your organization at some point of time. However, there are two primary functions that every good entrepreneur handles. First, is to manage risk. That is the ultimate job of any entrepreneur. It is encompassed in each action that you will take everyday at your boutique. This includes making the appropriate determinations of how much inventory you should buy, how much you should allocate towards marketing (without overspending), investing in new concepts, and reducing operational risks. The second aspect of every good entrepreneur is how to be a good problem solver. Operating a successful business, now matter how many protocols that you put in place to make the shop run smoothly, will always incur problems from time to time. These can be marketing issues, employee issues, or financial issues. Since we are talking about a boutique’s finances in this article, let’s stick with the last topic.

It may sound cliché, but nipping any financial issue in the bud will save you an immense amount of stress down the road. If you notice that sales are slowing then you should be proactive in mitigating these matters by increasing you marketing budget or eliminating non-core expenses. If you have invoices that becoming or are about to become overdue then you will need to address how to better improve and manage your cash flow. Again, your retained professionals can be an invaluable source of advice as it relates to these matters.

Conclusion

While managing a business’ finances is not a fun thing to do, it is absolutely imperative for any successful organization. If this is something that you continue to struggle with then it may be in your best interest to use both a bookkeeper as well as state-of-the-art accounting/financial management software that will make your life much easier.

It should not be surprising that most online boutiques are started as home based businesses. In fact, you will be able to remain competitive with some of the largest brands out there when you start your business for home. You know why? Because you do not have any costs normally associated with a large scale business. You will not need to pay rent, draw a salary (initially), or maintain expansive distribution facilities. Although the wholesale pricing that you receive on your boutique’s inventory acquisitions may be higher, you will still be able to remain pricing competitive through your low cost operating infrastructure. In this article, we are going to focus on a number of different topics as it relates to starting a home based online boutique. Similar to other articles that we showcase on these platforms, we will integrate common questions into the article as we progress through this discussion.

What will I need to get my business going?

First, you are going to need a business name. At this point, I am sure that you have come up with a number of different names that you want to use for your boutique. You will need to conduct a search to make sure that no one else is already operating a similar business using your intend name. Once you have completed that matter, it is time to register your domain name. There are a number of different companies that you can use for this purpose including:

• BlueHost.com
• GoDaddy.com
• HostGator.com

All of the above companies are businesses that have strong reputations and they will also be able to host your website.

It should be noted that you can acquire a domain name and have a seamless ecommerce experienced provided by an end to end service provider like Shopify. This platform will allow you to use your own domain name while integrating their state-of-the-art software so that you can immediately create product listings and showcase your products to your buyers.

Do I need a business plan for my home based boutique?

It is always a good practice to have a business plan in place so that you can appropriate budget your startup funds. For most home-based businesses, this type of business plan does not need to be a large scale document. This is especially true if you are self-funding your venture. When creating a home-based boutique business plan then should focus heavily on how you intend to market your business. Since the operational methods that you will be employing are relatively straightforward, a major component of your work will need to address how you intend to create a presence on social media, video sharing platforms, and engage in a budgeted search engine optimization campaign.

One of the other important things to note within your business plan is how much revenue you anticipate in each month. This is where business planning can become a bit more of an art than a science. A frequent question is how can this type of figure by calculated? Generally, you should take your marketing budget and times it by five to seven. This will give you a good estimation of what a well run online boutique should generate. When you are addressing the issue of your marketing budget within the plan, you should ensure that you have substantial capital allocated towards these expenditures. Without traffic to your website, there will not be any revenue.

Another common theme that should be woven throughout your plan is how you intend to grow the business over a five year period. Common questions that you can address include:

• How much will I need to allocate towards greater marketing efforts?
• What are the most cost effective ways of using my marketing budget?
• What is the ROI for each aspect of my online boutique’s marketing operations?
• How much do I need to allocate towards inventory acquisitions?
• Will I need to hire staff in order grow?

Admittedly, these are difficult questions to answer as no one can see into the future. However, you can map out a number of scenarios that showcase different outcomes. We have created a number of programs that you can use on this platform to help you make these determinations.

Now that I have my boutique’s domain name and ecommerce platform established, what comes next?

Now is actually one of the more fun parts of starting a business. You get to select the types of inventory that you will provide to your customers. This can be done in one of two ways. First, you can directly acquire inventories on a wholesale basis from a number of marketplaces and suppliers (see below). You will need to make a direct cash payment in order to acquire these inventories although certain credit terms can be applied. Alternatively, you can start your online boutique using dropshipping. In this capacity, you will not directly carry any inventories but rather list products for sale on your website that you will purchase as each order is received. This method of operation can substantially reduce your operational risks while allowing you to allocate more of your time and budget towards marketing matters. As you review this platform, you will see that we have a broad range of articles specific for this type of business model.

Will I need to start a LLC or register my business before I start to sell boutique products?

This type of question should be left up to your certified public accountant. Generally speaking, you can certainly acquire your domain name prior to launching operations. However, there are a number of tax and legal considerations that should be addressed prior to generating revenue. This includes having the necessary sales tax license and related documentation in place. If you intend to use a limited liability company (LLC) to hold your business’ assets then you should definitely work with your CPA in order to establish the corporate entity, obtaining your EIN from the IRS, and complete all other paperwork mandated by the state and federal government. Although this may seem extremely complicated, it is a very straightforward process. Most of the forms and documentation that needs to be completed take only a few hours. You can have all of these matters completed by a CPA or incorporation service for a modest expense (usually $200 to $500 dollars). The following an incorporation services that can use:

What are costs with establishing a home based online boutique?

Thankfully, the costs of starting an ecommerce business are relatively low. With just a few hundred dollars you can have a professional logo created and a website developed that will showcase your initial product lines. If your budget is higher then you can work with a number of professionals that can assist you in getting your online boutique up, running, and marketed to your targeted demographics. Generally, a baseline amount of startup capital can range from $500 to $4,000 depending on how aggressively you intend to start your business at the onset of operations. If you intend to build your business slowly then you can start with a more modest amount of capital and reinvest the profits from each sale into your growing venture. If you are seeking to quickly turn your online boutique into a full-time venture then you will need more capital in order to drive an expansive online marketing campaign that will encompass search engine optimization, social media marketing, influencer marketing, and multi-channel distribution.

What types of boutiques become the most successful?

Most successful boutique entrepreneurs start within a specific niche. With the advent of the internet and the prevalence of ecommerce, the competition has swelled. In order to thrive, many boutique owners seek to create a unique niche by fulfilling a specific need among targeted demographics. When you are starting to formulate your boutique’s business plan and marketing plan, you should focus heavily on who will be your ideal customer. This includes understanding not only the types of apparel products that they want but also where they live, how much money they make, and their annual budgets to spend on apparel.

What is the best ecommerce software for my online boutique?

We have reviewed numerous ecommerce platforms over the past ten years. As an entrepreneur, I am always looking at ways that I can improve my business and increase sales. For many years, my platforms used very simple shopping cards to process payments and manage my sales. There are now a number of software companies that provide comprehensive software suites that manage inventory, sales, sales tax, and integrate seamlessly with integrated analytics that allow for greater insights into ecommerce. Of all of the reviewed software suites, Shopify ticks all of the boxes as it relates to making life as easy as possible as a boutique owner. Their software provides comprehensive management tools, analytics, and marketing tools that you can use to drive sales.

Can I sell my boutique products on third party market places?

You certainly can! In fact, you may find that you are initially generating substantially more money by also listing your products on Amazon (via direct distribution as well as through the FBA program), Etsy, eBay, Walmart, and Target. On these platforms, hundreds of millions of global users visit on daily basis. They have an immense amount of trust with their customer base. There are a number of unique software suites that you can use that allow you to upload images and product listings among all of these marketplaces.  Shopify has applications that you can use to integrate an Amazon store with that of your other ecommerce suite needs.

How do I market my online boutique?

As you are developing this business as a home based enterprise the chances that you are starting with a smaller capital base are pretty high. The most cost and time effective way to develop traffic to your boutique is to aggressive use social media marketing and video marketing. The usage of both of these strategies will drive substantial traffic to your website very quickly. You can also use targeted advertisement among all major social media platforms in order to understand and refine your sales funnel.

Video marketing is also a quick and low cost method of creating brand awareness while also increasing your inventory turnover and concurrently increasing your conversion rate. People love to watch videos, and your customers will gain a much greater degree of trust with your business as you continue to create new content to view.

As you begin to generate revenues, you can invest into longer term marketing strategies such as search engine optimization. Using this technique, people will find your website through organic search results when they conduct queries for specific types of items. For most boutique entrepreneurs, this is a longer term approach to marketing as this technique can take one to six months to become fully effective.

One of the other methods that you employ in order to further drive sales is to become a social media influencer on your own. The primary reason why you are starting a boutique is probably because you have a great taste in fashion, apparel, and home décor products. You can simply promote your own online persona by creating videos and engaging in online groups to further your personal brand as an influencer while also increasing the brand name of your online boutique.

Where can I find inventories for my business?

In order article, where do online boutiques buy their inventories, we provide lists to a number of major marketplaces where you can acquire products that you will sell through your online boutique. Most importantly, you will first need to register with these platforms and provide a valid wholesale license prior to ordering merchandise. Your CPA can work with you in regards to obtaining the necessary documentation.

How much time and effort do I need to put into this venture?

Quite a bit! Developing a successful business takes a substantial amount of time and effort. If you are starting your operations on a shoe-string budget then you can anticipate that it will take more time-based effort on your part as you are going to need to complete most of the marketing on your own rather than outsourcing it to a third party. Additionally, you will need to curate a highly selective list of apparel, fashion, and home décor products that are going to quickly be sold. Even if you are starting out with a substantial amount of capital, the time needed to bring your home based online boutique to profitability is substantial. However, once you are up and running (and hopefully pulling in profits!) then you will find that you are able to more effectively manage your time while outsourcing non-core functions to third parties. It should be noted that there is absolutely nothing wrong with “toeing-in” to this venture. You can spend just a few hours a week working on your business until you gain traction. That is one of the major perks of ecommerce driven businesses.

Conclusion

There a few things that are more satisfying in life than starting your own business and having it reach profitability. You are not only creating an income vehicle for yourself and for your family, but you are also creating wealth. Once you start generating profits, you have created an entity that has true salable value. There is always an immense demand for boutiques that are profitable and have low operating costs.

On this platform, we have thoroughly discussed starting a boutique from scratch. In this article, we are going to change gears. Today, we are going to talk about how you can potentially buy a boutique. One of the major benefits of buying a boutique is that you will instantly have an operational and profitable business that you can grow. In fact, this is the reason why the vast majority of people that are looking to get into a certain industry conduct an acquisition. When buying a profitable venture, you instantly can operate the business on a full time basis with a focus on improving operations, increasing revenues, and expanding marketing operations. As with some of our other work on this platform, we are going to address specific issues while also answering common questions that arise.

Where can I find boutiques to purchase?

There are numerous websites that list businesses for sale. These platforms are very similar to websites that are specific for buying and selling real estate except that they are geared towards established businesses. For brick and mortar boutiques, you can take a look at BizBuySell.com and BusinessesForSale.com. If you are looking to buy an online boutique then you can take a look at Flippa.com.

Alternatively, you can work with a business broker. These individuals work with both buyers and sellers of businesses. Many of these professionals often have a specific niche in regards to the type of industry that they cover in regards to representing business buyers/sellers. A simple online search will yield numerous websites among brokers that specifically deal in boutique and retail businesses. It should be noted that your business broker should be a fiduciary to you if you hire one to search for a boutique business for sale. As always, you should also retain an attorney to work in tandem with the broker in order to ensure that everyone’s interest is aligned with yours.

How can I finance my boutique acquisition?

Unlike raising capital for a startup boutique, it is far easier to obtain capital for acquiring an existing business since it is far less of a risky venture. Many financial institutions are willing to provide you with 75% to 80% of the purchase price. The remaining capital will need to come from you or your business partners. Banks may be willing to provide you with a conventional business loan if the boutique has an extensive profitable operating history. For newer businesses that are profitable, you may need to use a SBA (Small Business Administration) loan in order to carry out the acquisition. Banks and small business financing companies are far more willing to provide a business loan provided that it is backed by the SBA. It should be noted that you will need a strong credit score in order to qualify for this type of financing.

If you have less than stellar credit then you may need to work with private investors in order to complete the acquisition. In some cases, you can have a private investor provide the down payment and act as a guarantor for any business loan that you may acquire.

What professionals do I need to hire when buying a boutique?

If you have found the business that you intend to purchase then you should immediately engage both an attorney and a certified public account (CPA). These individuals will be an invaluable resource as you progress through the acquisition process. Foremost, your CPA will be able to review any financial documentation that is provided to you by the current owner. A well qualified CPA will let you know if there are any discrepancies or red flags throughout their review.

You are also going to need an attorney. First, your attorney will review all contracts between you and the seller. Your attorney will also send a letter of intent that showcases to the seller that you plan on purchasing the business provided the certain criteria are met. An attorney is also a very good resource when negotiating the final price of the business, a non-compete clause, and other matters that are part and parcel with buying a boutique.

Should I interview the employees of the boutique?

Absolutely! In fact, talking with the existing employees of the boutique that you intend to purchase will allow you to know if there are any problems with the business. Although most employees may be somewhat reluctant to discuss any existing issues, you will be able to use your intuition to sense of the people that work for the business are happy.

Will I need a business plan when buying a boutique?

Yes, you are definitely going to need a business plan. In fact, the business plan for a boutique acquisition in many ways is more complicated than a business plan for a startup. This is primarily due to the fact that you are going to need to address the transition period that will be needed once you close the deal. A well written boutique business plan that is specific for an acquisition will focus on the ways that you, as the new owner, intend to aggressively expand the business.

You will also need a business plan if you are seeking financing for the acquisition. As discussed above, you can easily finance your business through a conventional business loan, SBA loan, or in tandem with a private investor. All three types of financing sources are going to want to see a comprehensive business plan that concurrently provides a timetable of business growth. In order to complete this document, you will need the existing financial statements from the current boutique owner. You should receive at least two years of tax returns, two years of profit and loss statements, a current P&L, and a current balance sheet.

What type of due diligence will I need to conduct?

In short, a lot! You will need to work with your advisory team to scour the financial statements that were provided to you by the seller. Again, your CPA will have an extensive background in forensic accounting. They will be able to help you determine if there are any issues that arise. Additionally, you are going to need to confirm any and all reviews that the boutique has received online. Sometimes, business owners will engage in less-than-preferable practices in order to make their businesses look better than they are. It is almost very important that you speak to the vendors of the boutique. They will provide you with substantial insight as to the inner workings of the business as it relates to dealing with third party suppliers. You’re attorney can also conduct a search regarding any pending litigation matters or liens that may be associated with the business. This is why most business purchases are done as asset-sales rather than stock sales. If this is a brick-and-mortar business then you will also need to work with the company’s landlord in order to ensure that you can extend the lease indefinitely.

Should I have the boutique owner stay on for a transition period?

Yes, if this is possible. In many cases, a seller of a business will be required to stay on for three months to a year in order to make sure that the boutique properly transitions to your ownership. Generally, this will not be a full time position. In some cases, the previous owner will stay on in a consulting capacity. Additionally, in most instances – a portion of the sales price is withheld in escrow until the transition period is complete. This ensures that the previous owner will properly carry out their obligations to you as the company is acquired. These matters will all be covered in the contract between you and the seller.

Now that I have acquired the company, how can I grow it?

The vast majority of people buy an existing business so that they have a profitable foundation from which to expand operations. First, after the transition period is completed – a new marketing plan can be implemented in order to further drive sales. Most entrepreneurs allocate a certain portion of their business acquisition budget towards making general business improvements while concurrently expanding marketing campaigns.

One of the quickest ways that you can expand revenues is by placing more capital behind marketing campaigns that have been successful for the previous owner. As part of your due diligence, you can examine which marketing strategies have been used and what the ROI has been for each of these marketing strategies. You should be able to access of their online analytics and where the boutique’s traffic comes from on a daily basis. From there, you can make the proper inferences regarding their social media, SEO, and traditional marketing campaigns when expanding these budgets. You can also determine which products are the quickest to move and further keep these products in stock for both retail and/or online sales (depending on what type of boutique that you are purchasing).

As discussed previously, one of the ways that boutiques develop repeat sales is through the use of loyalty programs. These types of operations can be easily implemented at both brick-and-mortar and online boutiques through the usage of specialized software suites. This will further drive repeat sales, which are extremely important during busy holiday seasons.

Once you have gained a handle on your business venture for a few years and have grown the business, you can always seek to acquire additional boutiques that you can integrate into your ecosystem. One of the issues that can arise in doing this is when you go to change the name of the boutique to those of your current operations. However, some boutique entrepreneurs take the approach of building a portfolio of many brand names based on the pricing point of the products that are featured in each location. Ultimately, how you intend to grow your business is up to you based on your vision for your empire.

A major avenue of growth for your brand will be to frequently attend regional trade shows and events that focus on fashion. At these events you will be able to rent booths in order to provide your products directly. These types of events are completely appropriate for both existing brick-and-mortar retailers as well as boutiques that operate solely in an online capacity. Anything that ultimately increases sales while creating a greater brand name will be a major boon for your business. There are numerous online directories that list events for this type of purpose. You can also check popular groups on Facebook that frequently discuss gatherings specific for the fashion industry.

The other way that boutique owners that have acquired their business through acquisition can expand revenues is through greater search engine optimization campaigns. As these businesses are already generating a positive cash flow (hopefully!), you can use this stream of income to further increase online sales. You can reference our article about SEO strategies for boutiques if you want more information about this  marketing discipline.

Conclusion

In closing, buying a small to medium sized boutique can be a great way of getting into this industry without having to take the risk associated with starting a business from scratch. Of course, buying any business enterprise has its own risks as we discussed. However, the benefits typically outweigh the risks given that you will instantly have a business that is producing a profit and a positive cash flow. Depending on the size of the business that you have purchased – you may be able to live on the profits while you further expand operations. Additionally, you will be able to leverage the existing operations of the business to create new revenue opportunities while putting your own personal touch on the boutique.

As always, be sure to hire qualified attorneys, CPAs, business advisors, and business valuation experts that will help you immensely throughout the process. Although this can carry a large upfront expense, it is far better to have an immediate knowledge if something is not right with the business that you intend to purchase.

In short, this can vary greatly. Generally speaking, it will take $5,000 to $25,000 to launch a full scale online boutique. The costs that you will need to account for as you developing your online boutique include:

• Accounting Costs – $500 to $1,000
• Business Planning – $300 to $2,000
• Inventory Costs – Varies
• Legal Fees – $300 to $2,000
• Logo and Graphic Design Expenditures – From $100 to very expensive
• Marketing – $100 per month to $5,000 per month (depending how much you have to start your business
• Website Development – Free to very expensive
• Working Capital – Varies based on your personal needs

Accounting Costs

The complexities of almost every tax code are typically too much for the average citizen to deal with on their own. This is especially true if you are going to start a small business, which complicates your tax returns even more (especially if you are going to start a LLC or S-Corp that will be taxed as a pass-through entity). As such, it is imperative that a qualified CPA is retained to help you through this process. Generally, most CPAs for a small business charge $500 to $1,000 to complete the necessary tax filings that are required on an annual basis. There are also a number of online companies that offer tax preparation suites including:

• Intuit
• TurboTax

One of the ongoing expenses that you will also incur is bookkeeping. Of course, at the early stages of your business – you can always act as the your boutique’s bookkeeper. As these are reasonably straightforward businesses, you can simply use an Excel spreadsheet or software suites such as:

• Quickbooks

There are also online services where you can hire a remote bookkeeper to help you. These services include:

The cost of these services range from $30 to $200 per month.

As your boutique expands, you may also need payroll services. Over the past five years, my business has used Square.com’s payroll. It is highly affordable and easy to use. Other online payroll services that you can review include:

The monthly fees for payroll management suites typically ranges from $30 to $500+ depending on the size of your organization and the number of employees that you retain.

Business Planning Costs

As with many functions of starting a boutique business, you can do most of the work on your own without having to use professionals (with the exception of CPAs and attorneys). When you are developing a business plan for your new boutique, you can initially start by doing this on your own. This is especially true if you are not raising capital with your business planning document. Please reference our article on Creating a Business Plan for Your Online Boutique in regards to this matter.

However, if you are looking to raise capital then it may be in your best interest to hire a qualified business plan writer or business planning firm that can help you create a document that is appropriate for a bank or an investor. Fiverr has a number of highly qualified experts that can create beautiful business presentations for your business. Typically, the cost for a professionally written business plan ranges from $400 to $2,000 depending on the scope of what you need. If you have a substantial amount of information available and can provide it to your business plan writer then the fees will typically range from $300 to $700. If you need a comprehensive business plan where all aspects of the document are done for you then these fees will be $1,500 to $2,000.

Inventory

Unlike the other expenses of starting a boutique, the amount that you spend on inventory is completely up to you. You will need to make a determination (as part of your business planning) which products you will be selling and your anticipated inventory turnover rate. For companies that acquire their own inventories on a wholesale basis, most entrepreneurs stock two to four months worth of inventory.

One of the common themes throughout this platform is how to get your boutique up and running for as little capital as possible. If you are concerned about acquiring inventory that may not be quick to sell, then you can always start your operations using dropshipping techniques or by establishing an online boutique that deals with affiliate marketing rather than direct sales. One of the nice things about operating in a drop shipping capacity or affiliate marketing capacity is that you do not need to take massive inventory holding risks (which includes changes in taste among your buyers).

In our article, How to Start a Boutique With No Money – we discuss the usage of drop shipping that allows you to provide your customers with a broad range of apparel, fashion, home décor, and accessories from a number of nationally recognized suppliers. If you are starting a boutique on a limited budget then working with drop shipping merchants may be your best option for your inventory operations. As time progresses, you can easily integrate your own carried inventories into the product mix. This is especially true once you see which products are being quickly purchased among your customers. This is a common strategy that is used among startup boutique entrepreneurs in order to increase their profitability on an ongoing basis.

Legal Costs

Every successful startup boutique needs proper legal counsel. The legal costs that come from launching this type of business include:

• Incorporation Filings
• NDAs and Contract Development
• Registered Agents

It should be noted that there are a number of different platforms that you can use that can drastically reduce legal fees associated with your boutique. Although some entrepreneurs choose to work with an attorney for their incorporation, there are a number of services that can help you with this process including LegalTemplates.net. This platform also has a number of sample contracts, non-disclosure agreements, and other legal forms that you can use throughout the life of your business. These platforms, in some instances, offer real-time support from attorneys and paralegals depending on the complexity of your legal needs.

Logo Costs

Every business needs a logo, and it can cost quite a bit of capital to work with a professional designer that can create imagery and a social media kit that compliments the brand that you are looking to build. Generally, logo development can range from $100 to $1,000 depending on how many different styles you would like to see. It should be noted that logo development is also done concurrently with your social media press kit. These kits include a number of different logo sizes and templates that you can use throughout your website and among social media pages. If you are in the market for a logo, social media kit, and other graphics for your platform – you can visit Fiverr. There are thousands of highly qualified graphic design professionals that can work with you to develop the imagery that you need for your boutique.

Marketing Costs

Similar to your inventory expenditures, the costs associated with your initial marketing budget can vary. When starting a boutique, you will need to allocate a substantial portion of your startup costs towards marketing which will encompass search engine optimization, pay per click marketing, hiring influencers, and engaging in targeted advertisements among social media platforms.

Initially, many boutique entrepreneurs use targeted advertisements on Facebook and Instagram in order to create immediate visibility for the brand as well as the products being sold. These types of campaigns can be started for as little as $50. Most social media platforms require very little upfront cost as it relates to running a targeted advertisement campaign.

One of the most cost effective aspects of marketing is the usage of social media influencers. Generally, each dollar that is spent on influencer marketing should yield five to seven dollars of revenue. Given that these people have fan bases of tens of thousands to millions of people, they can easily drive substantial traffic to your online boutique. These costs can be as little as $200 to over $5,000 depending on the celebrity status of the online influencer.

Pay per click is a more expensive form of advertising, but it can immediately drive traffic to your website. Generally, a fee of 50 cents to $2.50 is charged each time someone clicks on the advertisement. It should be noted that you will need to develop a number of internal metrics that will determine what percentage of your visitors are converted into customers (typically 1% to 5% of visitors should buy something). As such, you will need to compare this figures (and the average order revenue) to the cost of traffic driven through pay per click means.

The long term growth of your online boutique will require a dedicated an ongoing search engine optimization campaign. This will allow your business to be found when specific types of searches are conducted for the products that you sell. Throughout this document, we have covered the fact that you can conduct your own SEO in-house. This process consists of ongoing content writing as well as working with third party websites to promote your business. However, this is a very time consuming process. Additionally, it can take one to six months before the efforts of your SEO campaigns take hold. As such, you may want to consider hiring a search engine optimization firm that can assist you in this process. For lower-end firms, their monthly fees can be as little at $100. For highly established firms, these fees can easily exceed $5,000 per month. It is up to you how quickly you want to roll out these campaigns. It should be noted that there is never any guarantee that you will have success with this type of marketing. However, if it is done correctly then you can experience a substantial surge in your revenues over an extended period of time.

An additional that you may incur is the ongoing issuance of press releases. While this used to be a more prominent way of creating brand name visibility, it has fallen by the wayside given the rapid rise in social media. Most companies (of any size) typically make their announcements to their customer bases through Twitter, Instagram, and Facebook. However, there is still a benefit in crafting and distributing press releases. This is due to the fact that may websites will mirror your release on their platforms. Generally, the cost of a press release will range from $100 to $200 depending on which service you use. 

Website Design Costs

As with most of the other categories discussed in this article, the costs associated with web design can vary greatly. In many instances, you can do the entire design of your website on your own via easy to use templates. Ecommerce engines such as Shopify have a number of templates that you can easily customize to fit the needs of your online boutique.

For some people, there is a preference to work with a professional designer or design firm that understands your vision for your boutique. In these instances, a completely custom WordPress based website can range from $500 to $5,000. Typically, more expensive customized websites include specialized software modules and integration of ecommerce technology suites that enhance the buyer’s experience. For most people that are starting their boutiques on a budget – usage of Shopify templates, Wix, or related entities is the most cost effective way of getting up and running. One of the benefits of using these platforms is that they are very user-friendly and these large scale organizations provide a host of customer support services to make sure that your business runs as smoothly as possible.

Working Capital

Every business is going to need to pay bills even prior to revenue generation. For many boutique entrepreneurs, these businesses are often started as a side hustle before they can be transitioned into a full-time job. Depending on the amount of capital you have to invest and the time you can dedicate to starting your boutique, this can take one to two years. As such, you will need to have capital available to pay for website expenses, marketing, and your own personal costs as you develop your online boutique and your brand. For most online focused boutiques, these businesses are typically started as home based businesses. This eliminates high expenditures for rent. However, entrepreneurs with a larger capital base may seek to start a large scale enterprise immediately (which typically requires an investment of $50,000 to $100,000).

Other Cost Considerations

Although we have covered most of the expenses you will incur when starting a boutique, there are other considerations that you may want to factor into your budget. These expenses include:

• Furniture, fixtures, and equipment including desks, tables, chairs, computers, etc.
• Graphic design software such as Adobe (if you are going to do your own graphic design work).
• Photography equipment

However, most people going into this venture have most of these items available to them. Again, just another thing to calculate when you are developing your first year budget and online boutique business plan.

Do you have $20 to $100 to spend? Are you ready to put in the work to develop a business? If you answered yes, then congratulations! You can start your online boutique pretty quickly without having to spend an exorbitant amount of money. One of the nice things about the world today is that numerous ecommerce service providers have developed packages that allow for the seamless development of ecommerce websites. As has been discussed throughout this website, most people now use Shopify to act as their online solution for selling products online. This company provides a host of easy-to-use templates, SEO tools, marketplace tools, and marketing tools that can help you direct hundreds to thousands of people to your store on a daily basis. Of course, you will need to start small but once you begin to generate revenue – you will be able to add more products to your inventory, engage in larger marketing campaigns (especially using social media influencers), and reinvesting into the ongoing expansion of your business.

One of the first things that are probably coming to mind is how you can sell products if you need to first buy inventories. The good news is that you do not. You will be entering with world of drop shipping. With this business model, you do not purchase any goods until your customer has placed an order on your website. Once the customer places the order, you simply inform your drop shipping partner of what product to send to the customer. In many instances, drop shipping companies will include an invoice that features your own custom logo. There are numerous apparel, home décor, fashion accessory, and related product firms that love to work with drop shipping ecommerce websites. This type of business model allows them to focus on acquiring inventories and engaging in distribution rather than having to engage in a wide spread marketing campaign. It is your job as the ecommerce company to drive traffic to your website and it is there job to send the products as they are ordered. On this platform, we have developed a number of information packages that you can use so that you can source drop shippers for any type of boutique product available. Here, we focus on apparel, home décor, housewares, and furniture. However, there are drop shipping partners that provide other inventories as well as such electronics.

Before selecting the types of products that you will acquire, you will need to conduct an immense amount of market research. Most importantly, you are going to need to review current fashion trends. One of the ways that you can quickly conduct market research for the apparel, fashion, and/or home décor industries is to visit platforms such as Instagram. You can also follow prominent influencers on these platforms that showcase their styles and clothing. Major social media influencers almost always have extensive YouTube channels that you can review as well for this purpose. One of the ways that you can keep track of the types of clothing that you see is by downloading the Excel based tool. You can then sort this list by brand and influencer while concurrently determining which pricing points are most appropriate for your target audience. It should be noted that many drop shipping businesses often keep popular brands in stock so that faster inventory turnover can be achieved by their marketing partners.

One the key elements for starting a successful boutique when you are working with limited resources is that you must become an expert regarding online marketing with an immense focus on social media marketing. This includes developing pages on Facebook, Instagram, Twitter, as well as video platforms such as Tik Tok and YouTube. Over time, as your audience of followers grows – you will be able to more effectively hone in on which customers purchase the types of products that you are offering through your platform. For many boutique entrepreneurs that have stared on smaller budgets, one of the fastest ways that they build an audience is to become a social media influencer on their own. There is zero cost associated with establishing an account on YouTube. In turn, you can easily create a number of videos (simply using your phone) where you discuss topics that are relevant to the types of products that you are offering. As your clout and sphere of influence expands, you can leverage your existing social media presence to drive people to your website. It is imperative that all of your social media accounts link together so that new content that you publish its distributed among these platforms concurrently.

A common method of creating a strong brand name is to develop a podcast that features a weekly episode. In many instances, individuals that are seeking to become an influencer in the field of fashion, home décor, and apparel will often create podcasts which are broadcasted live. Once the recording is finished, many podcasters will then upload the video to YouTube and their respective social media channels in order to further drive viewer interest. This type of marketing can easily compliment the other campaigns that you will undertake in order to drive organic traffic to your boutique.

An additional method of starting a boutique with no money is to complete your own search engine optimization (SEO). The key to a successful SEO campaign is to create a tremendous amount of insightful content. You can discuss fashion or home décor trends, develop blog posts about aspects of products that you find interesting, and discuss prominent people that are in your field. Over time, more search engines will rank your content higher in the body of results and you will receive numerous visitors to your website on a daily basis. Typically, it takes about one to three months for this type of marketing to become effective. As your company expands, you can work with regional and national level SEO firms that will assist you in increasing the visibility of your brand. It should be noted that if you are going to engage in content marketing an ongoing basis then you should set three to five hours a week aside in order to create in-depth content that will appeal to a broad range of demographics.

When you use Facebook, Instagram, and Twitter to promote your products – you can do so using targeted advertisements once you begin to generate cash flow. These types of advertisements are relatively inexpensive and tens of thousands of people can be attracted to your website at a minimal cost. It should be noted that Shopify has a number of programs available that seamlessly integrate this type of marketing into your operations at a very low cost. As your company expands and you need outside help to manage these matters, you can hire firms that specialize in managing Facebook, Instagram, and Twitter based marketing matters. These firms are excellent resources for refining these types of marketing campaigns given their expertise in the field.

As your platform expands and you have the cash flow necessary to acquire inventories, you can begin to directly fulfill orders for your clients. As discussed earlier, most people starting a boutique on a shoe string budget use drop shipping methods in order to drive their initial sales. As you gain traction, you can begin to source products that are in demand that you and your staff can directly ship to clients. Your gross margins will typically increase once you begin direct distribution of products. In many instances, you will be able to work with your existing drop shipping partners in order to acquire highly competitive wholesale pricing.  

Once you achieve the ability to purchase your own inventories, you can also use programs like Amazon FBA in order to drive sales. This program allows you to directly send your products to Amazon and they will act as your fulfillment provider. Your customers will order these goods directly through Amazon, and you will be paid through your business account. It should be noted that you can also list your drop shipping products through Amazon as well. Very similar to how your Shopify (or similar platform) store operates, you will receive the order from Amazon which you will then forward to your drop shipping partner. For many new boutique entrepreneurs, this can be an excellent way of increasing your revenues as you establish a brand. These operations can be started concurrently started to a proprietary ecommerce platform (such as Shopify).

An important element of remaining successful when starting a boutique from scratch is to focus on creating a curated list of products that you find fashionable and modernly styled. Your boutique should express your fashion tastes and those of your targeted demographics. In many cases, the most successful online boutiques have the owner serve as the brand ambassador for the business. As discussed earlier, through aggressive social media operations – you can easily create an immense audience that feels similarly to you about certain products. Being able to connect with your audience on a personal level is a major component of building a strong brand. We will continue to develop new content that focuses on creating these types of connections with your target audience.

Another method of creating revenue streams for your boutique to initially act in an affiliate marketing capacity. For these types of operations, you will receive a commission each time a successful sale is driven to a third party website. This method is similar to that of drop shipping except you are only driving traffic to another merchant’s site. If this is something that appeals to you then you can forgo establishing a Shopify account and simply create a WordPress based platform that will allow you to list products from other websites. Similarly to a drop shipping focused boutique, you will need to engage in a broad based marketing campaign that encompasses SEO, pay per click, social media, and video based advertisements. As your influence and traffic to your website grows, you can seamlessly integrate products that you can directly sell to your customer base. As you explore our website, you can access a number of resources that will show you how to conduct these types of operations.

Commissions for affiliate marketing based operations typically range from 4% to 10% for each successful sale driven. For drop shipping based operations, the gross profits can range from 15% to 30%. However, it is far easier to simply refer products to your audience of users rather than having to directly manage incoming sales. It should be noted that there is nothing that indicates that you cannot do both at the same time. Although this may contribute to a more challenging user experience, this can produce income while your brand’s visibility gains traction. It is important to experiment with different types of revenue generating models as you establish your online boutique.

One of the things that you can consider once your business has become profitable is the acquisition of capital in order to further fuel the growth of your business. This includes using a working capital line of credit, revolving credit facility, or soliciting an investment from a private investor in order to expand your operations. Given that you will be generating highly predictable streams of revenue from your operations, you can also potentially obtain merchant account financing should you want to begin to sell your own inventories directly rather than through drop shipping methods. This website has numerous articles that discuss the financing matters regarding the development of a boutique. Many startup entrepreneurs will often use credit cards or other types of high interest financing when they are starting to get their online boutique off the ground. However, you should carefully consider your financing options especially when using higher interest rate credit facilities. In many instances, it is best to start your boutique on a very low budget before taking on any debt to further expand your operations. If you do have questions regarding these matters then you may want to speak with an accountant that is local to you before you make any decisions of this nature.

Overall, there are very few things in life that are more gratifying than starting your own boutique business. Once you achieve profitability (which can occur quickly if you keep your costs low), you will be poised to rapidly expand your operations. Additionally, your hard work will pay off as you recognize a significant monthly income while concurrently developing a value asset for your net worth.

In this article, we are going to provide a step-by-step guide for starting a boutique. We are going to discuss the initial steps that you will need to take in regards to planning your budget and incorporating your business all the way through launching your business and maintaining a committed apparatus for conducting marketing. Let’s begin!

Step 1 – Determine the name of your business and your boutique niche

One of the common mistakes that boutique entrepreneurs and businesspeople often make is that they do not focus enough on carving out a unique niche within the fashion or home décor industry. There are numerous big box retailers and large scale ecommerce companies that offer every possible type of apparel or home décor item possible. The big question that you will need to ask yourself is how are you going to differentiate your boutique from your competitors? The majority of highly successful online boutiques focus on a very specific type of style, specific pricing point, and specific brands that will be offered (including proprietary brands that you may be developing). It will be up to you to procure a curated list of inventory that will be in demand among the demographics that you will be targeting through the life of your business.

Step 2 – Determine how you are going to sell your products

This is may seem like a straightforward question, but there are numerous ways that you can acquire inventories for sale to your customer base. Foremost, you can work with wholesalers that will provide you with competitive pricing when you purchase goods in bulk. On this platform, we provide access to numerous lists of apparel wholesalers that can quickly provide you with the inventories that you will carry through either your online boutique or retail store. If you are looking to reduce the capital risks associated with your business, you can always use drop shippers while you establish your online boutique’s brand and marketing plan.

Additionally, you will also need to make a determination of whether or not you will strictly use your proprietary online boutique website (or retail store) for sales. You are going to want to consider using Amazon (and their FBA program), Etsy, eBay, Walmart, Target, and related platforms in order to further drive sales. These methods can easily increase your monthly inventory turnover while contributing to greater exposure for your boutique’s brand name.

It should be noted that there is nothing stopping you from acquiring inventories directly while concurrently offering some products that will be distributed through drop shipping methods. If you know that certain products are going to be sold very quickly then you can directly acquire these products, which will ultimately result in greater margins for your business. In order to maintain a more complete online boutique, you can drop ship products (which will allow you to make a profit while eliminating a portion of your inventory holding risks).

Finally, if you want to generate a more modest amount of revenue or want to more slowly enter the field of owning an online boutique – you can always engage in affiliate marketing in order to drive your initial revenues. Using this method, you will list products on your website that are available for sale on third party platforms. You will typically receive a commission of 4% to 10% on each sale that you direct to your partners. This is a very low cost method of creating an interesting and eclectic list of products that your targeted demographics will want. This allows you to focus exclusively on marketing rather than having to directly procure inventories.

Step 3 – Develop Your Boutique Business Plan

Of all of the steps that need to be taken when starting a boutique, this one is generally considered to be one of the most complicated. Once you have determined your name, business model, and niche – then it is time to get cracking on this document. A well drafted online boutique business plan will examine how much capital you need to get started, the demographic profile of people that you will be targeting, how much you will need to allocate towards marketing, your anticipated revenues, your anticipated expenses, and how long it will take to reach profitability. I’m sure you have a headache from just having to think about that all at once. Most importantly, you should take your time when developing your business plan. It should be a well thought out document that addresses each of the questions above.

If you are planning to raise capital from a bank or an investor then you may need to work with a professional business plan writer in order to create a visually stunning presentation. We have developed a number of boutique business plans on this website that you can download and use to create a well written plan. If you decide that you would like the help of a professional for this aspect of your work, you can use platforms such as Fiverr that can help you find a qualified person to help you draft your plan.

The critical components of your business plan should focus on the anticipated financial results, demographics, and methods that you will be using to market your boutique to the general public. In order to determine your anticipated revenues, you will need to estimate the average amount of money that will be spent per customer per order. For online based operations, you will also need to determine your conversion rate. For most ecommerce businesses conversion rates vary from 1% to 5% depending on the products being sold. For highly niche platforms, the conversion rate is usually higher given that a specific audience is being targeted. Using these two metrics, you can calculate your anticipated revenues. One of the common rules of thumb is to also calculate your marketing expenditures into this formula so that for each dollar of money you spend on marketing – you will receive seven to eight dollars back in revenue. This is par for the course with highly competitive online boutiques.

In order to maximize your allocated marketing budget, you are going need to develop a marketing plan that showcases exactly how you will use these funds. We have developed a sample boutique marketing plan in a separate article. The methodologies that you are going to want to consider include social media marketing, targeted advertisements, pay-per-click, search engine optimization, influencer marketing, micro-influencer marketing, video production, press releases, and content distribution. The costs of each of these methods can vary greatly. Most boutique entrepreneurs focus heavily on both influencer marketing and search engine optimization as these methods produce immediate and long term results, respectively. It should be noted that a well developed and defined search engine optimization plan for a boutique typically takes two to six months to become effective. Influencer marketing can immediately drive traffic to your platform, but you will need to continue to provide substantial capital expenditures for this to work on a long term basis.

One of the main considerations that you will need to focus on when developing your marketing plan is the specific types of marketing messages that you will incorporate into your overall boutique marketing campaign. This includes understanding your customer, their wants, their incomes, their ages, location, and what trends that they will embrace over the next three to five years. Admittedly, this is easier said then done. There are professional marketing experts that dedicate their entire lives towards helping companies make these determinations. If you intend to use social media influencers in order to further drive sales then you can work with specialists that can actually pair you with people that will be able to boost your online boutique brand relatively easily.

As it relates to the amount of capital that you will need to start your boutique, a specific section of the business plan should be created to determine the aggregate amounts that you will need to allocate towards the following:

• Initial marketing
• Initial inventory (which can be eliminated if you are engaging in drop shipping)
• General working capital
• Office development and payroll (if you are immediately going to hire employees)
• Legal and accounting costs
• Unexpected costs

Step 4 – Incorporate Your Business

Once the business plan is done then it’s time to do more paperwork. You can reference our article about incorporating a boutique in regards to which corporate entity is most appropriate for your business. As always, understanding these matters falls into the scope of needing to consult with an attorney or CPA. There are many benefits and disadvantages to each type of corporate entity discussed.

Step 5 – Register Your Domain Name

Now that you have determined the name of your business, it is time to open up shop! This step assumes that you did not first register your domain name when you first decided to start a boutique. There are numerous companies that where you can register a domain name.

Step 6 – Set Up Your Ecommerce Website

This can be done in a number of different ways. The quickest and most cost effective way for starting a boutique is to use an established ecommerce technology provider such as Shopify. This business provides a simple and easy to use interface which features a number of customizable templates. You can have your business up and running in a matter of hours. If you are struggling to develop your ecommerce platform then you can work with a number of experts that can help you. As always, we recommend that you take a look at the number of professionals on Fiverr that can help you with this part of your boutique’s development.

Step 7 – Source Your Boutique’s Inventory

There are thousands of wholesalers that can affordably provide you with the underlying inventories that you will sell through your online store. As we discussed earlier in this article, there is also the option for working with drop shippers that will supply your underlying inventories. If you are working with a limited budget for inventory acquisitions then drop shipping may allow you to begin generating profits which you can then use to acquire wholesale inventories as you expand. We will continue to provide comprehensive lists of suppliers that you can use for direct acquisition and dropping shipping for apparel, fashion, accessories, and home décor items.

Step 8 – Let the Marketing Begin!

Now that you have your online boutique up and running, it’s time to start marketing! When you developed your marketing plan (within your online boutique business plan), you timetables will now be put to use. In most instances, boutique entrepreneurs will start using social media advertisements, pay per click, and influencer marketing in order to drive the initial traffic to the website while search engine optimization campaigns take hold (which again can be one to six months).

If you find that you are struggling with managing the marketing aspects of your business by the sixth month of operation then you may want to work with a dedicated marketing manager. A qualified social media expert can help you refine your marketing campaigns so that they are more focused on your core demographics. Even if your online boutique marketing campaigns are doing great, it is important to determine which aspects of these operations are producing the most sales. Additionally, you will want to examine the progress of your search engine optimization campaigns.

Step 9 – Run the Business

This is where the day to day operations of your boutique start. As a fellow business owner, this can be quite a grind. Owning and operating a boutique is not a 9 to 5 job. You will be required to answer emails as they come in, prepare orders, and ensure that your marketing campaigns are running properly on a daily basis. For many boutique entrepreneurs, the operation of their boutique (especially an online store) is a part time job until substantial profits are generated. It should be noted that this is also an important time to take good care of yourself. The development of any new entrepreneurial venture is stressful. You are going to wait anxiously for you sales to start and you are going to want to put everything you have into your business. Even if you are working numerous hours per day bringing your boutique to profitability, it is important to allocate time for eating, relaxing, and sleeping.

Step 10 – Close The Books!

After you first year of operations, it is time to close the books. This means preparing all of the necessary profit and loss and balance sheet statements that will be required for your tax returns. It is a good practice to complete your bookkeeping on a monthly basis so that you can track the progress of your business. This will also allow you to determine the return on investment for each type of marketing that you undertake.