Check out the courses we offer

Setting up a Clothing Boutique Business

All you need to know about starting and running your business

Business guides » Setting up a Clothing Boutique Business

What is a Clothing Boutique Business?

There are more than 11,000 clothing retail shops in the UK and more than 34,000 businesses operating within the fashion and textile industries. Even with the recent closing of some beloved retailers in the UK, the clothing industry was still estimated to be worth nearly £55 billion in 2022.

A clothing boutique differs from regular clothing businesses as it usually refers to a smaller shop that is privately owned (rather than a chain or franchise) where customers can expect a more personalised service and access to more unique clothing items. Shopping in a boutique usually gives the customer a 1:1 experience where they can interact closely with the owner or the employees and ask for their advice and expertise. A boutique usually has a more limited inventory compared to regular retail shops.

A clothing boutique can choose to sell any type of clothing, including:

Dresses Suits Trousers Shorts
Skirts Shirts/ Blouses T-shirts and tops Jackets
Jumpers/ Cardigans Swimwear Underwear Coats
Footwear Jewellery Accessories Socks and tights

You can choose to focus on a specific type of clothing, such as formalwear, casualwear or beachwear or even on a specific clothing niche, such as novelty socks, prom dresses or graphic t-shirts. Different types of clothing retail at different prices and will appeal to different target audiences. When setting up your business, you will need to decide the types of clothing you want to sell.

As well as determining the clothing you want to specialise in, the niche you want to operate in and your target audience, you must also decide the type of boutique business you are going to set up.

There are several different ways you can choose to run a clothing boutique business, including:

  • Open a clothing boutique shop (a physical location).
  • Set up an online clothing boutique business with its own website.
  • Run your clothing boutique business through an already established website, such as Etsy.
  • Set up a clothing boutique social media page and use this as your primary selling strategy.

 

You may choose to start small and then grow your business as your customer base and profits increase; for example, you may initially operate an online clothing boutique and then expand to a commercial location as your business grows.

There are many different tasks and responsibilities associated with running a clothing boutique business. These responsibilities can vary, depending on the type of business you set up.

However, some of the main responsibilities can include:

  • Keeping up to date with fashion trends.
  • Designing your clothing or planning your collection and inventory.
  • Ordering stock and managing your stock inventory.
  • Overseeing deliveries.
  • Pricing your products.
  • Displaying products in your shop or modelling your products and photographing them for your website.
  • Advising customers and helping them with any requests, needs or complaints.
  • Serving customers, taking orders and handling payments and receipts.
  • Organising sales and promotions.
  • Handling returns and refunds.
  • Bagging or packaging your products.
  • Organising customer deliveries (if relevant).
  • Managing staff (if relevant), including hiring, training, completing payroll and day-to-day management.
  • Ensuring the high quality of all your products.
  • Ensuring your business complies with all health and safety regulations and legal guidelines, including fire safety and electrical safety.
  • Ensuring the cleanliness of your property.
  • Advertising and marketing, including managing your website and social media.
  • Completing business and administrative tasks.

 

Running a clothing boutique business can be both financially and personally rewarding. If you are thinking of starting up a clothing boutique business, a passion for clothing and the fashion industry and previous experience working within the clothing industry will be extremely beneficial. You will also need strong organisational and business skills and a well-prepared business plan. If you open a boutique shop, good interpersonal skills and the ability to advise customers will also be advantageous.

Types of Customers

Once you have determined who your typical customer base is, you can then decide how best to target them. You will need to gather information and insights into your clients. You can do this via multiple sources, including social media.

Your typical customer base will depend on multiple factors, such as:

The types of clothing you sell

This is one of the most significant factors in determining your typical customer base. You may choose to specialise in a specific type of clothing or offer a variety of clothing options. The clothes you sell can also vary depending on the season. Consider the types of clothing you sell and who is most likely to buy this clothing when determining your typical customer base.

How and where you sell your products or services

The way you operate your business will likely have a significant impact on your customer base. You may opt to set up a clothing boutique shop, for example, on your local high street, set up your own boutique website, or sell your clothing through social media or an already established website. Consider your primary selling strategy when trying to identify your customer base and keep in mind that your typical customer base could change as your business grows and evolves. If you open a clothing boutique shop, consider your location when determining your typical customer base.

Whether you sell clothes aimed at a particular age or gender

Although clothing is not limited to a particular gender, certain types of clothing are more popular with certain people. For example, if you set up a clothing boutique that specialises in formal suits, your customer base is likely to be made up primarily of men. If your business sells prom dresses, your typical customer base is likely to be teenagers. If your clothing boutique focuses on children’s clothing, your customer base is likely to be primarily made up of parents and grandparents.

The materials and fabrics you use

Whether you design your clothes yourself or purchase already-made garments to sell on, the types of materials and fabrics you choose and the quality of the materials can impact your typical customer base. For example, you could opt for premium materials, such as silk, cashmere and leather, or cheaper materials such as cotton and polyester.

Your pricing

This is another important factor in determining your customer base. Clients often have a specific budget in mind when purchasing new clothes. Customers can typically be separated into three categories with different ideas of the type of products they want and different budgets.

  • Budget: Price is one of the most important factors for this type of client. They will be less concerned with the quality of the materials and the longevity of the garment. This customer tends to favour fast fashion.
  • Mid-range: This type of customer is looking for a combination of quality and affordability. Although price won’t be the most important factor, it will definitely be something they consider.
  • High-end: This type of customer is willing to pay the highest prices for the highest quality garments. They will likely be looking for a luxury shopping experience and will look for clothes made from high-quality materials that are likely to last for longer.

 

Your business brand and aesthetic

Your branding and aesthetic are key to attracting customers. Your business name, logo, and the design of your shop or website are all key to the types of customers your business will appeal to.

Your marketing and advertising strategies

Your marketing and advertising strategies will have a significant impact on the types of customers you attract. For example, if you advertise on social media sites, such as Instagram or TikTok, you will be more likely to attract younger customers.

Your reputation or customer reviews

This is another important factor that many shoppers look at. They may look at your customer reviews or decide based on recommendations from friends and family.

Your reputation and reviews will likely be based on:

  • The quality of your clothes.
  • The shopping experience.
  • Your pricing.
  • The ordering and delivery process (if relevant).
  • Your website (if relevant).
  • The attitude and helpfulness of your staff (if relevant).
Clothes hanger cartoon
Socks Cartoon
Clothing Cartoon

Equipment You Will Need

Your equipment is an essential requirement, as without it you will not be able to operate your business. Your equipment costs can vary significantly depending on the type of clothing business you set up and your primary selling strategy (i.e. online or a physical shop).

Although your equipment requirements can vary, below is a list of equipment typically required by a clothing boutique business:

Clothing Shop Equipment

If you choose to open a clothing boutique shop, some of the equipment you will likely require includes:

Signage

There are multiple types of signage you will need for your boutique, including:

  • Shop front signage (with your business name and logo).
  • Opening hours signs.
  • Pricing signs.
  • Promotional signs.

 

Ensure your signs are attractive and eye-catching, that they fit your business’s brand and aesthetic and that they clearly demonstrate the type of shop you are running.

Clothing rails, racks and shelves

There are different styles of shelving and clothing racks, such as:

  • Rolling racks.
  • Double bar racks.
  • Spiral racks.
  • Shoe racks.
  • Belt and tie racks.
  • Floating shelves.
  • Gondola shelving.
  • Illuminated displays.
  • Wall-mounted rails.
  • Double clothes rails.

 

You will need to decide which works best for you, depending on the size of your shop floor and the aesthetic of your business.

Hangers

You can never have too many hangers, particularly as some customers may request to take their hangers home with them or some hangers may break. There are many different types of hangers you can choose from made from different materials, including wood, metal, plastic and padded hangers. Choose your hangers based on the types of clothes you will be hanging up. You can also choose hangers that are a particular colour or design to fit your boutique brand.

Dressing rooms

The majority of shoppers prefer to try on clothes before buying, so not having a dressing room could have a negative effect on your sales. You will need to partition off an area of your shop for customers to try on clothes. Each dressing room should offer complete privacy, using doors or curtains. They should also feature a small stool or bench, hooks to hang the clothing and a mirror.

Mirrors

Mirrors are an essential piece of equipment as your customers will want to try your clothing or accessories on or hold your garments against their bodies. Depending on the size of your shop, you will need several full-length mirrors on your shop floor and at least one full-length mirror in each dressing room. If you sell accessories, such as hats or sunglasses, smaller mirrors are also recommended. If you sell shoes, you could also opt for shoe mirrors.

A seating area

Depending on the size of your shop, you may opt to include a small seating area where customers can wait, for example, while their shopping partner is trying something on in the dressing rooms. A seating area can also be utilised by customers who are trying on shoes. Opt for comfortable chairs that are easy to clean and fit the aesthetic of your shop.

Display cases

Display cases are used to display jewellery and accessories. You can choose:

  • Table cases.
  • Wall cases.
  • Free-standing cases.

 

Your display cases can be glass-fronted or open from the front. The type of display case you will need depends on the items you are displaying (e.g. jewellery, sunglasses, hats).

Mannequins

Mannequins are essential for clothing shops, as they allow your customers to see the garments more clearly, including the way they fit and the way the material falls. Mannequins can also be placed in your window and act as an advertisement and bring people into your shop. The number of mannequins you need will depend on how big your shop is.

Shopping baskets

Shopping baskets are not only more convenient for your customers, but they can also encourage them to purchase more – increasing your sales and your profits. Choose baskets that are strong and hard-wearing and that fit your boutique’s brand.

Sales tags

Each piece of clothing you sell will likely be priced differently. You need to clearly display your pricing to customers and there are different ways you can do this, with the most popular being cardboard tags that are attached to each piece of clothing (usually via string or a plastic loop). These cardboard tags could have the price printed on them, or you could attach the price using a pricing gun or small stickers.

A cashier desk

This is the area where your customers will bring their items to pay. The desk should offer a degree of separation between your staff and the customers, which helps to ensure your employees’ safety and reduces the likelihood of theft from your cash till.

Your cashier desk may require:

  • A telephone.
  • A barcode reader.
  • A security label remover.
  • A counterfeit money detector.
  • A stapler.
  • A cash register and Point-of-Sale system (POS).
  • A receipt printer and receipt rolls.
  • An alarm button or panic button.
  • Paper shopping bags (ensure these are well-stocked).
  • Gift wrapping supplies.
  • Business cards.
  • Pens.
  • A fully stocked first aid kit.

 

A box cutter

A box cutter will be needed for any stock or deliveries. A box cutter can make it easier to open boxes, packaging tape and twine. It can reduce the amount of time it takes you to accept deliveries and creates a more efficient delivery system.

Storage shelves

Depending on the size of your shop (and the size of your backroom area) you may not keep all your stock on the shop floor at one time. If you expect to have a high sales volume or plan to stock multiple sizes of each product, storage shelves in your back room are recommended. If an item on your shop floor is low in stock, you can then move it from your back room to your shop floor.

A safe

If your boutique accepts cash, you will need a safe as a way of safely storing the cash from your till at the end of the day. You can also keep extra change in your safe in case your cash register runs out of change during the working day.

Window dressing materials

Your window is the first thing your customers will see. If you hope to capitalise on foot traffic and attract passers-by, you will need to ensure your window display is attractive. As well as mannequins, you could also include posters and signs, accessories and décor items.

Décor items and accessories

Decorating your boutique to fit your brand aesthetic is a key way to attract customers. You should ensure your décor items do not clutter your shop and detract from your clothing, but instead complement your brand and your garments (for example, if you sell beachwear, you could decorate your shop in a beach theme). Some décor items and accessories you could choose are lights, flowers and plants.

Cleaning supplies

Keeping all areas of your shop clean is imperative, particularly as different customers will be visiting your shop. You will likely need different cleaning materials for different parts of your shop. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser and a sweeping brush and mop.

A CCTV system

Because you will be storing expensive stock, CCTV can protect your business from potential break-ins and theft. CCTV can also protect your business in the event of an injury or accident and can provide vital footage to the police if a theft or incident occurs in your shop. You can choose the specification of the equipment and how many cameras you require.

Online Boutique Business

A computer/laptop and a Wi-Fi system

A computer can be used for running your boutique’s website and social media. You can also manage your online orders, organise deliveries and advertise your clothes. A computer can also be used for business and administrative tasks, such as ordering stock and doing your accounts. You will also need a Wi-Fi system to enable you to use your computer or laptop online.

A website

A website is useful for advertising your business and will likely act as your primary selling strategy. It should contain photographs and descriptions of your clothing (including the materials) and the sizing. It should also show the areas and locations you offer delivery to and your customer reviews. Your website will likely feature an option to order online. Design your website to include your business logo and to reflect your branding.

Because you will be selling your clothing online, you will need to ensure it is packaged correctly to make sure the clothes aren’t damaged during transit. Ensure your packaging is sustainable and environmentally friendly and it is designed to match the aesthetic of your business.

Some equipment you may require as an online business includes:

Boxes of various sizes

Depending on the size of the order and the items ordered, you may need to send some deliveries in boxes. Choose boxes of different sizes to suit different orders. You may also need specific types of boxes, such as shoe boxes.

Compostable garment bags, mailbags, mail envelopes or corrugated cardboard envelopes

There are many different ways you can choose to package clothing. Your preferred method will depend on the size and delicacy of your clothing and your budget. Ensure your packaging is environmentally friendly and attractive and displays your business name or logo.

Packaging tissue paper, packing peanuts, Styrofoam inserts or paper bubble wrap

These items keep the contents of the packages securely in place and reduce the likelihood of any damage occurring. Most consumers of small businesses prefer eco-friendly packaging so keep this in mind when planning your packaging. For example, paper bubble wrap is similar to traditional bubble wrap but is more environmentally friendly, as it is made from recyclable paper.

Shipping labels

These labels will need to include:

  • Customer name.
  • Customer address.
  • The business name and address.
  • The shipping method.
  • The package weight.
  • A scannable bar code (if relevant).

 

Packaging tape

You will need packaging tape to secure your packaging and prevent any items from falling out or being tampered with.

Twine or ribbon

Twine or ribbon can be used to tie around your boxes or packaging to keep them more secure and make them more aesthetically pleasing.

Cards and delivery notes

Small business consumers appreciate personal touches such as a card or delivery note. They could also feature your business logo and information and a discount code to encourage repeat business.

Clothing

Typical Costs

When you are creating your business plan, an important consideration you will need to make is your expected start-up costs and running costs. Calculating your expected costs allows you to determine your initial investment requirements, your pricing strategy and your profit goals.

There are multiple costs associated with setting up and running a clothing boutique business. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.

Although the costs can vary depending on the type of clothing boutique you set up, some of the typical costs you can expect are:

Fabrics, materials and stock

This is one of the most important purchases your business will make and will be an ongoing cost. Regardless of whether you design your own clothes for someone else to make or sell already-made clothing, you will need to purchase materials or stock. The costs can vary significantly, depending on the type of fabric (e.g. silk or cashmere garments are significantly more expensive than cotton or polyester) and the type of clothing. Keep your stock or fabric costs low by shopping around and buying in bulk.

The cost of your fabric and stock each month will depend on:

  • The type of fabric.
  • How much of each item you require per month.
  • How you source your stock.

 

Models

If you are displaying pictures of your clothing on your website or on a brochure or advert, you will need to hire people to model your clothing. Depending on how many garments you need modelling and how many photographs you require, you may hire multiple models or one model. The cost of hiring a model can vary depending on their experience. To reduce your costs, you could ask friends, family or your customers to model your clothing.

Equipment

Your equipment is an important purchase, as without it you will not be able to run your business. You can choose to buy less equipment initially and expand your equipment as your business grows. The cost of your equipment can vary significantly, depending on how much equipment you require and the specification of the equipment. Purchasing equipment for your clothing boutique business typically costs between £2,000 and £20,000.

Maintaining, repairing and replacing equipment

Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment and machinery will come with warranties, repairs and replacements are inevitable – particularly because the equipment will experience frequent use. For example, your laptop and barcode reader may wear out and stop working effectively over time and items such as shopping baskets may become damaged. Correctly cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.

A business premises

If you open a clothing boutique shop, your premises will likely be your biggest expenditure. You will need to rent your premises on a monthly or annual basis. Rental prices can vary significantly, depending on the location and the size of the premises. City centre locations and newly built premises usually have the highest rental costs. Rental costs are often calculated per square metre. They can range significantly, from £500 to £15,000 per square metre annually. Your rental cost may be higher if you are renting an already established, refurbished or equipped clothing shop.

Refurbishment and installation costs

If you decide to set up a physical shop, you will need to consider your refurbishment costs. Unless your premises previously operated as a clothing shop, you will likely need to refurbish or convert your premises to install the equipment and furniture you need for your business and make the area fit for purpose. You will also want to refurbish and decorate your premises to fit the aesthetic of your business and make it attractive to customers. Renovation costs can vary, from £500 to £20,000 depending on the level and scale of work required.

Your business website

If you opt for an online clothing boutique, this is an essential tool for running your business. Your website will act as your primary selling tool and your advertising and marketing strategies, allowing potential customers to find your business. Your website should be functional, easy to use, attractive and search engine optimised, to ensure it ranks highly on search engines, such as Google. Your website will need regular monitoring, updating and upgrading. You also need to make sure your website is secure, particularly if you will be collecting any customer information or banking details. You may choose to set up and run your website yourself or hire someone to do this for you. You can expect to pay between £20 and £100 per hour for someone to set up and run your website.

Staff

If you hire any staff to work for your business, you will need to pay them at least the national minimum wage and account for other expenses such as holiday pay, sick pay, maternity/paternity pay, National Insurance and any company pension contributions.

Branding

When creating your brand identity, consider how you want your business to be perceived by potential customers. When creating your brand, consider the type of clothing you sell, your typical customer base and how you plan to sell your clothing. Branding can include creating your business’s visual identity, design and aesthetic, your business name and logo and your website. You could hire a professional to help you with branding or do some or all of the work yourself. Branding can cost between £500 and £10,000, depending on the level of work required.

Advertising and marketing

To ensure your clothing boutique business attracts customers and creates maximum profits, you will need to spend money on advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £100,000, you should spend between £1,000 and £3,000 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business. Online businesses also typically require more marketing and advertising. To reduce your costs, capitalise on free marketing strategies, such as on social media or in your local community.

Running costs

These are the day-to-day costs associated with running a clothing boutique business. Some running costs are paid monthly, and others are paid quarterly or annually. Your running costs can vary significantly depending on whether you set up an in-person or online business. Your running costs could include electricity, gas and water and your delivery costs. To maximise your profits, try to keep your running costs as low as possible.

Business insurance

There are multiple coverage options available for clothing boutique businesses. Your coverage requirements can vary depending on whether you set up an online business or open a shop.

Some of the coverage options you could choose include:

  • Public Liability Insurance.
  • Product Liability Insurance.
  • Contents Cover.
  • E-Commerce Insurance.
  • Employers’ Liability Insurance.
  • Buildings Insurance.
  • Stock Insurance.
  • Legal Expenses Insurance.
  • Personal Accident Insurance.
  • Business Interruptions Insurance.

 

Insurance costs can vary depending on your insurance provider and the level of coverage you require. Prices typically start at £15 per month.

Typical Pricing Customers

Once you have calculated the expected costs associated with setting up and running your clothing boutique, you can then determine your pricing.

Each of your products will likely be priced differently and your pricing strategy will be dependent on multiple factors, including:

The types of clothing you sell

Certain types of clothing are typically more expensive than others. For example, if you sell garments such as suits, prom dresses or silk blouses, your price points will automatically be higher than if you sell items such as t-shirts and beachwear.

The fabrics and materials you use:

When pricing your items, consider the cost of the fabric. Your materials should cost no more than 30% of your pricing. For example, if your fabric costs £21, the garment should be priced at a minimum of £70. Even if you do not design or make the clothes you sell, clothing made from more expensive materials will have a higher purchase price for you and this needs to be reflected in your pricing.

Your typical customers

Your typical customer base will have a significant impact on your pricing. Will you target budget customers, mid-range customers or high-end customers? Some factors that could influence your typical customer base are the clothing you sell, the materials you use and your primary selling strategy or location (if you run a shop).

Safely Running a Clothing Boutqiue Business

Safe practices in your clothing boutique business can help to protect you, your customers and your employees. Safe practices can also help to protect your business and your profits.

Some ways you can safely run your clothing boutique business are:

Implement an inventory system

Regardless of the type of clothing boutique you plan to set up, an inventory system can help you to keep track of your stock. This helps you to manage your inventory by ensuring you don’t run out of stock or overstock a certain item, resulting in lower costs and increased sales. An inventory system can also protect you from theft, as it helps you to quickly identify if a theft has occurred and allows you to access the CCTV footage and contact the police.

Provide receipts

Surprisingly, receipts are not legally required by retail businesses selling to consumers in the UK. However, a receipt can act as a transactional recording for business reporting purposes (e.g. when you are doing your taxes). Many customers also request receipts for their own records and in the event they need to return an item.

If you provide receipts, include information such as:

  • Your business name and address.
  • The item purchased.
  • The total price.
  • The payment method.
Clothing Boutique
Window Display in a clothing boutique

Properly maintain and set up equipment

Any equipment you use must be properly maintained, correctly set up and safe to use. You must protect yourself, your employees and your customers from accidents or injuries caused by equipment. You should also perform regular equipment inspections to ensure your equipment’s safety and help extend the lifespan of your equipment. Maintenance includes cleaning equipment regularly.

Carry out risk assessments

Although risk assessments are only a legal requirement for businesses with more than five employees, they are recommended to all businesses to ensure the safety of you, your staff and your customers. Risk assessments can help you to identify any potential hazards and risks in your business and how these can be reduced or eliminated.

As part of your risk assessment, you should:

  • Identify hazards.
  • Determine who could be at risk.
  • Evaluate any potential risks.
  • Implement relevant safety measures.
  • Record the results of the risk assessment.
  • Review the risk assessment regularly.

 

Implement security measures

If you have business premises or keep expensive materials at your home, security measures can be implemented to protect your business from theft. Some ways you can protect your equipment and materials include installing a CCTV system, using secure and reliable locks and installing an alarm system.

Use a secure payment system

If you accept online orders, this is a key way to protect your business and your profits. You must ensure all payments are completely secure and are made through secure and legitimate channels. This ensures none of your payments are lost or untraceable and reduces the likelihood that you will fall victim to fraud or theft. Secure payment systems can also help to protect your and your customers’ identities and other personal information.

Legal Requirements

Complying with any regulations or legal requirements is essential when setting up and running a clothing boutique business. The legal requirements can change depending on the type of boutique you set up.

Some factors that can impact the legislation you need to comply with include:

  • Whether you have business premises.
  • Whether you sell your products online.
  • Whether you hire employees.
  • The types of materials your clothes are made of.

 

Some legal guidelines and regulations you should be aware of are:

Comply with the Consumer Rights Act (2015)

The Consumer Rights Act gives the consumer the right to enforce terms about goods and reject or return any items that are not as expected.

The Act states that all products that are sold in the UK must be:

  • Fit for purpose.
  • Match any description given by you.
  • Of satisfactory quality and not faulty or damaged.

 

Comply with labelling requirements

If you manufacture, distribute or sell textiles (including clothing) you must comply with labelling regulations, including The Textile Products (Labelling and Fibre Composition) Regulations which specify that you must state the fibre content of each product. If a product consists of two or more components with different fibre contents, the content of each component must be shown.

It is also recommended (but not legally required) that you should include:

  • The country of origin.
  • The flammability.
  • Any care instructions.

 

Comply with the General Product Safety Regulations (GPSR) 2005

The GPSR ensures the safety of consumer goods and lays down a framework for assessing product safety under normal and reasonably foreseeable conditions. They ensure the safety of consumer goods by stating specific controls. As part of these regulations, you should undertake and document a risk assessment that assesses the risks and risk categories associated with your products and provide traceability labels.

Comply with the Copyright, Designs and Patents Act (1988)

This legislation gives protection to any original designs or craftsmanship. If you design your own clothing, under this Act, you must ensure you don’t copy another individual or business’s designs without seeking permission. If you advertently or inadvertently copy someone else’s design, you may be liable for statutory damages and can be sued in court.

Comply with the Nightwear (Safety) Regulations (1985)

These regulations apply to all adult and children’s nightwear and any baby garments that you sell. It is an offence to supply nightwear unless it has been treated so that it conforms to the flammability performance requirements, even after it has been washed. Under the regulations, you should also avoid selling items with higher flammability threads and trimmings. If you sell nightwear or any clothing that may be worn as nightwear, ensure you comply with these regulations.

Comply with regulations on cord and drawstring length

Under the BS EN 14682:2014 (safety of children’s clothing specifications), you must comply with the specific regulations regarding the length of any cords or drawstrings on children’s clothing. The requirements change based on the type of garment, the placement of the cord or drawstring and the age of the child.

Ensure toys, teddies and other play items are CE marked

If you sell certain products, such as children’s teddies, you must ensure they are CE marked before they can be sold. CE marking shows that these products have been checked and they meet all safety, health and environmental requirements.

Comply with regulations on choking hazards

Any items that may be considered choking hazards, such as buttons and sequins, must be securely fastened and be able to withstand at least 70kg of force. It is particularly important you comply with this requirement if you work with children’s clothing or toys.

Comply with retail legislation

There are several pieces of legislation you need to follow when selling goods to consumers. You must ensure your products are described correctly and that pricing is displayed visibly. You must also ensure your products are of good quality and are fit for the intended purpose.

Comply with the General Data Protection Regulations (GDPR) and the Data Protection Act (DPA)

You must comply with both pieces of legislation when storing or sharing personal information, such as your customers’ personal information, contact details and banking information. You must also apply for a Notification to Process Personal Data Licence. If you process or store personal information such as personal details and banking information, you will need to apply for a licence with the Information Commissioner’s Office and renew your registration every year.

Register your business

Your business must be registered with HMRC before you begin operating. You can choose to register as a sole trader or as a limited company. You will also need to register your business name and any other relevant information.

Register for self-assessment tax

This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.

As part of your tax responsibilities, you must:

  • Record all forms of income and expenses.
  • Complete an annual self-assessment tax return.
  • Register for VAT if you earn above the threshold (currently £85,000).
  • Pay National Insurance contributions.
  • Keep a record of your business accounts for the previous five years.

 

Clothing Boutique Shops

Some legal guidelines apply specifically to businesses with a physical location that is frequented by employees, customers and other members of the general public.

Some legal requirements you should be aware of if you are setting up a clothing boutique shop include:

Comply with fire regulations

If you run your business from a shop attended by staff or customers, you must ensure fire safety measures are implemented on-site. There are multiple fire regulations you must ensure you comply with.

For example:

  • Perform a fire risk assessment.
  • Comply with the Regulatory Reform (Fire Safety) Order 2005.
  • Implement any necessary fire safety measures.
  • Implement emergency procedures and ensure these are clearly displayed on your premises.

 

Comply with the Electricity at Work Regulations 1989

The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT).

Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998

These regulations apply to you and any employees you hire. You must ensure all equipment is fit for purpose and is maintained and inspected regularly. You must also ensure that health and safety risks are minimised to an acceptable level, that you (and your employees) have the correct knowledge and training to use the equipment, and that protective measures are put into place. You must also ensure the equipment is used under appropriate conditions.

Comply with employment legislation

If you employ any staff, you must ensure you follow employment legislation, including the Employment Rights Act (1996) and the National Minimum Wage Act (1998). You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.

Comply with the Health and Safety at Work etc Act 1974

The Health and Safety at Work etc Act lays out the duties of all employers in the UK regarding ensuring the health, safety and welfare of everyone in your workplace. As you are the business owner, you will be responsible for protecting the health and safety of your employees and any clients or visitors to your business.

Prepare a health and safety policy

The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your shop, who is responsible for specific tasks and how and when these tasks are completed. Follow the recommended tips from the Health and Safety Executive when creating your health and safety policy. You should make your policy easily visible to any visitors to your business.

Appoint a competent person

A competent person should be appointed to help your business meet your health and safety legal duties. You can act in this role yourself or appoint another person to fulfil this role. The competent person should have the skills, knowledge and experience to identify any hazards in your business and put controls in place to protect people from harm.

Comply with the Manual Handling Operations Regulations 1992

Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high (for example, when carrying stock or cleaning).

Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013

RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve you, your staff or your customers.

Apply for a music licence

If you play any music in your shop, you will need to apply for a licence with Phonographic Performance Limited (PPL) and/or a Performing Right Society (PRS) Licence. You can apply for both a PPL and a PRS online.

Appoint a first-aider

All workplaces in the UK must have an appointed first-aider. In the event of an accident or injury, you will then be able to administer the necessary first aid. Although a first aid qualification or certificate is not legally required, it is the easiest way to demonstrate your first aid training.

Online Clothing Boutiques

Some pieces of legislation apply specifically to online businesses, including:

Comply with the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013

If you sell any products or services online, you must comply with the Consumer Contracts Regulations. They outline your customers’ basic rights when purchasing online. This includes the right to a 14-day cancellation period.

You must also provide information, such as:

  • A description of the goods.
  • The total price of the goods.
  • How the goods will be paid for and how they will be delivered.
  • Any additional delivery charges and other costs.
  • Details of the right to cancel, including who is liable for the cost of returning items.
  • Information about the seller, including contact details and geographical address.

 

Comply with e-commerce regulations

If you have a website advertising your products or services or selling your products, you must comply with the Electronic Commerce Regulations. These regulations state how you communicate with your website users. Under these regulations, you must clearly display your terms and conditions, display clear pricing information and delivery charges and identify who sends any business communications. You must also ensure email privacy and comply with laws on distance selling.

Ensure your website is disability friendly

Under the Equality Act (2010), all websites in the UK must be accessible to people with disabilities. If you set up your own website, you must make reasonable adjustments to your website to ensure it is accessible, for example, having text-only versions of each page so that they can be read by text converters.

Ensure your website complies with the guidelines

If you set up a website, there are several guidelines you need to comply with, including:

  • Privacy policies.
  • Cookie legislation.
  • Service descriptions.
Clothing boutique display

Positives of Owning a Clothing Boutique Business

Running a clothing boutique can be rewarding in many ways. Some of the main pros associated with this type of business are:

Do something you are passionate about

If you are passionate about clothing and fashion, running a fashion boutique can be extremely rewarding. Sharing your talent and creativity with the world and spending every day immersed in a world you love can be extremely gratifying. Earning money while doing what you love can make your business feel less like work and more like a vocation.

Creative freedom

Running your own clothing boutique business gives you the complete creative freedom to create your own designs, follow your favourite fashion and style ideas and use your own ideas and expertise to advise your customers. Even if you are not designing the clothes yourself, you still have the freedom to choose exactly what products you stock. You will have the opportunity to pursue your creativity and your vision.

Design your dream business

You can make all the key business decisions and design your dream business. You can choose whether to set up a physical clothing boutique or operate an online business. You can also choose the type of clothing you specialise in, your typical customer base (e.g. you may focus on women’s clothing or open a children’s clothing boutique) how you want to run your business and the clothing designs.

Protect the environment

The fashion and clothing industries have become increasingly aware of their negative impact on the environment and consumers are increasingly buying from environmentally friendly and sustainable clothing brands.

Some ways you can be environmentally friendly include:

  • Use sustainable and eco-friendly materials for your clothing.
  • Sell garments that will last – not fast fashion.
  • Upcycle and recycle materials.
  • Follow ethical practices.
  • Use recyclable materials for your packaging.

 

Operating as an environmentally friendly business is not only personally rewarding, knowing that you are doing your part to protect the environment, but it can also help you to attract more business, as customers increasingly move away from businesses that are not eco-friendly.

Make people feel good about themselves

Selling clothing that your customers feel comfortable in and that makes them feel good about themselves can be extremely rewarding. Your clothing can empower people and make them feel more self-assured and confident. One of the best things about running a clothing boutique is seeing your customers smile in your clothing and receiving their positive reviews and feedback. Depending on the type of clothing boutique you set up, you could also be involved in the big moments in people’s lives, such as their proms, weddings, holidays and christenings.

A growing industry

The clothing and fashion industries are consistently growing, with 2023 set to see a growth rate of 15%. This growth is expected to continue, increasing the value of the industries. This makes now a great time to set up a clothing boutique business, as it increases your chances of success and allows you to maximise your profits.

Wide customer reach

If you operate your clothing boutique online, your customer base will not be limited to people who live or work locally to you. Instead, you can sell to customers all over the country, allowing you to grow your business and maximise your profits.

Connect with other people in the industry

You will have the opportunity to build connections with other people in your industry, other people who are artistic and creative and other local businesses. Building both professional and personal relationships allows you to stay up to date with new trends and techniques and create useful business connections that can help you to grow your business.

You can offer a personalised customer experience

You can offer customer consultations where you discuss what your customers want and offer advice and insight. Your customers will receive a personalised experience and are more likely to find the perfect garments. With a personalised experience, the customer is likely to be more satisfied with your service and recommend you to their family and friends.

You can start small

You don’t have to immediately open a boutique shop or begin operating your own clothing website. Instead, you can start small, for example, by working from home and selling your clothes on social media or on websites such as Etsy. Once you have established a client base and created some capital, you could then expand your business and increase your profits.

It is easy to promote your products

With the takeover of social media, promoting your products has never been easier. Set up social media accounts for your business to advertise and sell your clothes and share and promote your accounts to increase your followers and visitors. You can even offer your customers or social media influencers free products if they model your clothing and promote your business on their social media. Even regular customers may tag your brand in their pictures and videos. This can help you to grow your customer base and increase your sales.

Customer retention and recommendations

People are often loyal to their favourite clothing boutique and if they like your products, they will likely return to you again. You will likely have regular customers who may also recommend you to their family, friends or to people on social media. High customer retention and customer recommendations can help to ensure the success of your business.

Opportunities for growth

A clothing business has high scalability meaning it has the opportunity and capacity to expand and grow easily. Once your original clothing boutique succeeds, it is easy to grow your business, for example, by opening additional shops or growing your business online. You will already have positive relationships with suppliers, vendors, manufacturers and delivery companies and can utilise these relationships to help you grow your business with minimal stress.

Unlimited income potential

The more experience and exposure you gain, the higher prices you will be able to charge. As your business grows and you develop a good reputation, you will see your orders increase and your profits grow. You can even charge higher prices and hire more staff and expand your business to increase your profits. A clothing boutique can have a high-income potential and your profit margins are likely to be high. With a good business plan and strategy for growth, your business could have unlimited income potential.

A positive work environment

A clothing boutique shop can be a great place to work. You can work in a face-to-face capacity, helping your customers and connecting with them every day. You will also be spending extended periods of time with your employees and can choose to hire employees you think would be the best fit for your business. You will have the opportunity to build positive relationships and create a positive work environment.

Choose your workload

As the business owner, you can choose the hours you work and how many orders you want to accept each week and month. You can run your business around your personal life, for example, by only operating during the week. You can temporarily refuse new orders if you are at full capacity or you want to take time off. You can hire additional staff to reduce your working hours.

Be your own boss

There are multiple ways you can grow your business and increase your profits. You can hire more employees, expand your business or even open additional premises. You can make the best decisions for you and your business.

Stock For a Clothing Boutique

Negatives of Owning a Clothing Boutique Business

Although running a clothing boutique business can be rewarding in many ways, there are some potential cons you should be aware of, including:

Competitive industry

Not only will you be competing with other independent clothing boutiques, but you will also be competing with much-loved high-street shops and online retailers, such as Asos and Boohoo. Even supermarkets sell fashionable and affordable clothes now. A high level of competition can make it more difficult for your business to succeed.

A high number of returns

Returns are a huge challenge for businesses operating in the clothing industry. Clothing is the most returned item in the UK, followed by shoes, bags and accessories. Online clothing businesses have an average return rate of 30% and physical stores have an average return rate of 17%. Not only are returns bad for the environment, but they can also significantly affect your profits and cause your business to lose money.

High staff turnover

Retail businesses have some of the highest staff turnover rates. Roles such as shop assistants are typically occupied by younger people (such as college and university students) and those who are willing to work for minimum wage. Clothing stores typically have high staff turnover because of the lower wages, a lack of progression opportunities and because it is a highly competitive job market. Having high staff turnover can be stressful as you may feel like you are constantly hiring and training new staff. It can also result in instability in your business.

Following fashion trends

If your clothing boutique follows current fashion trends, you will have to change the products you are selling at least every six months. Fashion changes from season to season and many fashion trends completely lose their value from one year to the next, meaning that you will have to sell all your products before they lose their popularity. Any unsold products can result in lost revenue. Following fashion trends can also negatively affect your business if you miss the trend or catch on too late.

Building your customer base can be difficult

With so many already established clothing businesses in operation, it can be difficult to grow your customer base. It can take years to grow your customer base to where you want it to be, which means you receive less business and lower profits when your business first begins operating.

Potentially high start-up costs

Depending on the type of clothing boutique you choose to set up, it may require a high investment. The cost of your premises, refurbishment and installation costs, equipment and stock can be extremely expensive, meaning you will require a large amount of capital to set up your business. Not only does this mean you may need to source outside investment, but it also makes your business high-risk. Having a large initial investment also means it will take longer before you begin turning a profit.

High operating costs

A clothing boutique can be expensive to run, particularly with rising utility costs. Your ongoing rental and stock costs, the money you will lose from returns and thefts and your running costs can negatively affect your profits. Because your operating costs will be high, you will need to ensure consistently good business in order to make a profit.

High time commitment

You will be responsible for many different tasks, which can be very time-consuming, Your working hours will not be limited to the hours your shop is open as you will also have additional responsibilities, such as ordering stock, doing inventory, designing your clothing or choosing your garments, handling orders and deliveries and handling other business and administrative tasks. This can be extremely time-consuming and stressful.

Inconsistent business

The clothing industry can be seasonal, with many clothing businesses seeing increased sales in the lead-up to Christmas and Summer. There may be other times of the year when business is slower, and you receive fewer orders. This can make it difficult to predict your profits, make the correct stock orders and plan your staffing requirements.

Lost income from theft

Even if you implement theft protection measures, it is very difficult to eradicate theft entirely. Your customers could shoplift your clothing, or you could have employees that steal from your cash till or your inventory. Theft results in lost inventory and lost profits, which can have a significant impact on your income.

A lot of skill, knowledge and experience are required

To run a successful clothing boutique business, you will need to be highly proficient in a variety of skills and will need to have high technical knowledge and knowledge of clothes and the fashion industry. Previous experience designing and creating clothes or working in a clothing business is also beneficial. It can be time-consuming to gain the appropriate skills and experience.

It can be stressful

Not only is there a lot of pressure to fulfil the perfect order every time, but as the business owner, you will face the additional pressure of being responsible for your business’s success. You will have a lot of important responsibilities, such as ensuring health and safety, marketing and advertising, ordering materials, handling deliveries and dealing with customers. Handling all of these responsibilities can be stressful.

Your business could fail

Starting up your own business can be risky. Many new businesses fail which could result in you losing money or getting into debt. Your business could fail for several reasons, such as high local competition, an ineffective business plan or if the UK encounters another recession or a period of financial difficulty. If you have invested a lot of money and time into your business, this can be extremely disheartening and can result in you losing a lot of money.

Bad reviews

Although the majority of customers leave honest reviews, some customers are difficult to please and will leave a negative review because of the smallest complaint (even if it is something outside of your control, such as clothing not fitting them). Sometimes a fake customer also leaves a fake review, which can be extremely difficult to disprove and remove. Negative reviews can be extremely damaging to your business, particularly if your business is new or you’ve had relatively few reviews.

No benefits

As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.

Planning Your Clothing Boutique Business

If you are considering starting up a clothing boutique business, an effective and well-designed business plan is essential. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.

Your business plan should contain information such as:

  • Your company information.
  • Your company description.
  • The services you will provide.
  • Your branding, marketing and advertising plan.
  • The structure of your business.
  • The operational plan for your business.
  • The financial plan for your business.

 

When creating your business plan, some factors you will need to take into consideration include:

The type of clothing boutique business you are going to set up

Deciding what type of clothing business you are going to set up and your primary selling strategy is an important step when planning your business. Will you open a physical boutique shop? Will you run your own website? Will you sell your clothing via another platform? The type of clothing boutique you set up will impact your start-up costs and running costs, your typical customer base and your premises and staffing requirements. Consider your available capital and the market demand when making this decision. You may choose to set up one type of business initially and then change as your business grows.

The types of clothes you will specialise in

This is one of the most important factors you will need to consider when creating your business plan. You may choose to specialise in a specific type of clothing (such as beachwear, formalwear or underwear) or offer a wider range of clothing focused on specific clients (such as children’s clothing).

When deciding what clothes you will specialise in, consider:

  • The types of fabrics and materials you will use.
  • Whether your stock will change seasonally.
  • Your typical client base.

 

Your target market

Determining your target market is a key step to helping your business succeed. Different types of clothing, different materials and different selling strategies can all influence your typical customer base. Your pricing strategy and the design and aesthetic of your business are also key in determining your typical customer base. Once you have identified your target market, you can then focus on how to attract them to your business.

Your business location (if relevant)

If you open a physical clothing shop, your location will have a significant impact on the types of customers you are likely to attract. It will also impact your premises’ rental costs. If your business is located in an area with high footfall or a place popular with your target market, the increased custom and higher profits will be extremely beneficial to your business. Consider your rental budget and your size requirements when choosing your premises.

Your competition

Your main competition will vary depending on your primary selling strategy. Analysing your competition allows you to look at what they do well and what you think can be improved upon. Being aware of your competition is an important step to ensuring the success of your boutique. You should also look at the types of clothing they sell, their pricing and their typical customer base. Analysing your competition also identifies whether there is space in the market for your business; for example, if there is already a successful beachwear shop operating close to your location, you may choose to focus on another niche or change your business slightly.

Your brand and your unique selling point (USP)

Creating your brand is a key way to ensure you stand out from your local competition. Branding can help you to focus your target audience, attract clients and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on the clothing you stock, your business’s visual identity and creating a brand story. Your business name and logo are also part of your branding so ensure you consider these when creating your business plan. A USP can also be part of your brand and can help your business stand out from your competitors. Consider what can make you stand out and how this fits into what defines your business.

Your advertising and marketing strategies

There are many ways you can choose to advertise your business. This can include partnering with other businesses in your area, advertising in your local community, advertising on social media and using paid online ads. Your marketing and advertising plan should detail what your brand is and how you plan to promote your business. As part of your marketing strategy, consider the most effective ways to reach your target audience and attract potential customers. Create an advertising plan that is specific to the type of boutique you are going to run and how you plan to operate.

Your equipment and stock requirements

Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of boutique you set up and whether you have a business premises. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment and the monthly replenishment costs, e.g. for replenishing your stock. You will also need to estimate how much stock you will require per month.

Your start-up costs and running costs

Consult the list above to calculate your approximate start-up costs and running costs. Determining your approximate costs allows you to calculate your initial investment and what your monthly or yearly running costs will be. You can then calculate whether you can finance your business yourself or whether you need to source outside investment, for example, from a bank or an independent investor. Being aware of your expected costs also allows you to create a budget, which is a key part of your business plan. Once you have calculated your approximate costs, you can then calculate your pricing policy and determine your profit forecast.

Financing your business

Consult the list of start-up costs and running costs above to determine what capital you will require. Can you finance the business yourself or will you need to source outside investment? You will also need to calculate when you are likely to begin turning a profit. If you require outside investment, you could consider a bank or other financial institution, a business loan or an investment partner.

Your pricing policy and sales strategy

How will you price your different products and services? What will your pricing be based on (e.g. types of product, materials used, the popularity of each item)? You should also take into account the pricing of your competitors. Once you have determined your pricing, you can then create a sales strategy to help you maximise your business opportunities.

Your business summary

Your business plan should include a detailed overview of your business, including the type of boutique you are setting up, the clothing you will sell, your primary selling strategy, your typical customer base, your staffing, premises and equipment requirements and your business goals.

Your business goals

Your business goals or objectives are an essential part of creating your business plan. Your business objectives highlight the targets and goals of your clothing boutique business and help you to create a one-year, three-year and five-year business plan.

Your business objectives should be SMART:

  • S = Specific
  • M = Measurable
  • A = Achievable
  • R = Realistic
  • T = Time-bound

Check you have complied with all legal requirements

Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.

Download our business plan