How to Start a Boutique 01: Online or Brick & Mortar?

Welcome to the first chapter of my new blog series: How to Start a Boutique.

If you’ve ever wondered how to start a boutique, you’ve come to the right place! Over the next several posts, I’m going to take you all the way from the very beginning of your dream to opening day.

Having been through the process myself, my goal is to help you along the way of starting a boutique and provide some key resources for you that were not available to me when I was opening my boutique. I’m so excited to bring you this in-depth information in my “How to Start a Boutique” series—a comprehensive and amazing guide to starting your very own boutique business.

A good place to start is figuring out your business model—whether you will go solely online or open up a brick and mortar boutique.

If you’re ready to go, let’s get started by defining the most important part of this entire journey—your dream.

Defining Your Dream

We all start with a dream—sometimes we just need help clarifying it.

Now close your eyes and imagine your life just as you have always wanted it. Do you imagine yourself in your  boutique day to day helping out customers and merchandising product? Do you love helping people style their outfits and the thought of anything techie sends you into a tizzy? Or do you envision yourself mobile and having the freedom to work the hours you choose interacting with your customers through social media?

Having a brick and mortar boutique will most likely require you to be there during set hours. With my first boutique, I opened in a mall which meant that I had to be open during the hours the mall was open. Even if I shut my gate for a few minutes while I ran to get lunch in the food court could potentially result in a fine. As a small business and a one-woman boutique it was quite challenging for me at times! As time went on, I realized that I wanted to move my boutique to a location that wasn’t in a mall to give me more freedom with my hours.  The mall has it’s perks of foot traffic, but ultimately it was better for me to be able to choose my own hours.

On the other hand, an online boutique will give you even more freedom with your hours than with a brick and mortar boutique. If you imagine yourself working a more flexible schedule and you love making pretty packages—then starting an online boutique may be for you. I love getting a notification on my phone that I have an order and if I am busy during the day, I can still package it at night and have it ready to ship the next day. If I want to go on an extended vacation, I can make a note to my customers that I will be out of town and will ship their orders when I return. When I started my brick and mortar boutiques I essentially worked 7 days a week for almost 2 years straight.

Or perhaps your dream involves both. A lot of people may choose to get started online and then venture into owning a brick and mortar boutique. Every one of these options is a valid choice, so long as you realize that regardless of your long-term path, you need to fully understand the realities of each situation before making any choices. Entering the retail industry is risky business—like any entrepreneurial endeavor—but you can make a calculated, informed decision about your dream when you know what life as a boutique owner is really like. It’s no secret that career satisfaction plays a major role in determining our overall levels of happiness in life. Doing work that you love can fulfill your life—the key is to figure out what it is that you really want.

Let’s look at some of the key differences between owning an online boutique and owning a brick and mortar boutique to help you understand what you’re getting yourself into.

Getting Started

Forbes estimates that a brick and mortar boutique will cost at least $100,000 to start, so it’s no wonder that many people choose to start off with an online boutique first! It also depends where you will be opening your boutique. A boutique in Los Angeles or New York is going to cost you a lot more than a boutique in a small town in the Midwest. For example, I was able to start my boutique for about $40,000 in a smaller town in Wisconsin (in 2006).

With an online boutique, the start up costs are much, much less. Another option to make your costs even lower with an online boutique is with drop shipping. Drop shipping gives you the ability to sell items in your online boutique without having to purchase the inventory. When an order is placed the company that provides the drop shipping services will also ship the order as well. There is a lot less financial risk involved with drop shipping. The downside to drop shipping is that you will be selling the exact same thing with the exact same photos as a lot of other online shops. A big way to make an online boutique your own is in your product photos. You have complete creative control in your photo shoots so you can show off all of your amazing clothing and accessories.

Investing in an online boutique is can be less of a financial risk than investing in a brick and mortar boutique.  Your overhead for an online boutique will naturally be less than buying or leasing a space for your brick and mortar boutique. On the other hand, a brick and mortar boutique offers the benefit of customers being able to come in, try on your merchandise, and have you sell it to them. If you find the right location with excellent foot traffic, the overhead for rent can often times be worth it! Although—when things are slow, you will still need to come up with your rent money.

For both a brick and mortar boutique and online boutique you will need to obtain your seller’s permit and business license. These costs vary greatly from state to state and also business type to business type. It could cost you as little as $50 or as much as $800. This is something you will need to research with your local government office and much of it can be done online.

Once you have your seller’s permit, you will be able to purchase wholesale merchandise—one of the first orders of business that you’ll want to start looking into. It may take a while to source brands that you want to work with and to attend trade shows and place orders.

In the ever evolving retail industry, finding creative ways to sell your merchandise will become increasingly important.  There are a lot of different options for consumers, so it will be important for you to stand out and be different than all of the rest.

Your Daily Routine

No matter what route you decide to take, the reality of the situation is that you will be working long hours. Being a small business owner isn’t for the faint of heart.

Operating a brick and mortar boutique will require you to be in the boutique most of the time. You’ll be frequently helping customers, folding clothes, merchandising your window display, holding in store events, and so much more. If you are fortunate enough to hire employees off the bat, you will still need to train them and then manage them to make sure everything is running smoothly. A typical day spent in my boutique would involve a lot of cleaning, decorating, maybe some buying, helping my customers, accounting, and so much more—but it was also a lot of fun for me and very rewarding.

Operating an online boutique will involve a lot less face to face interactions. You will be spending a lot of time updating your website with new merchandise, taking photos of merchandise, updating your social media accounts, replying to customers emails, and packaging and shipping orders. If you love the idea of a boutique, but are more of an introvert, an online boutique may be more your speed.

Evaluating the Risk

As we established earlier, opening a boutique requires quite of a substantial monetary investment upfront. You’ll have initial inventory, displays, website costs, and so on. That’s a big risk to take right off the bat for a small-time entrepreneur with a dream—and you may have trouble finding someone to finance your aspirations.

A few options for financing are bank loans, crowd funding, saving up for it yourself, or a combination of any of these ideas or others. I took out a loan from the bank to supplement what I had already saved to open my boutique. That option worked out great for me, but I may have tried crowd funding if it was more prominent at the time that I was starting my boutique.

According to the SBA, over 50% of small businesses fail within the first five years.  As if there already wasn’t enough anxiety already! This is a huge risk, but also a risk worth taking to follow your dreams. I  knew I had to try owning my own boutique or else I knew I would always wonder “what if”. And since I was only 23, I knew I still had time to recover if things failed. At the same time, I made very conservative financial decisions and did a lot of the work myself or with the help of my family when renovating my space. I could have gone all out and hired a team of people to design and construct my boutique which would have exponentially raised my costs, but instead I chose to take on a lot of the work myself so I didn’t have to spend more money. There are a lot of things that you will be able to do on your own—it just takes some time and research. Start off small and work with your budget. There is nothing wrong with growing your business slow and steady.

Choose Your Path

Whether you choose an online boutique or brick and mortar boutique, the realities of the boutique business can feel a little daunting and discouraging – but don’t let it get you down! It will all be worth it in the end to see your hard work come to fruition.  Hopefully with this series you will have a lot fewer unanswered questions about where to begin. Consider your options thoroughly and create a business plan that outlines what you really want, how you’ll achieve it, and where you’ll find the funding to get started.

Coming up next: In the second chapter of “How to Start a Boutique”, we’ll get down to one of the most fun parts of planning—deciding what you’ll sell and coming up with a concept for your boutique.