Editor's note: This article was excerpted from our Clothing Store start-up guide, available from Entrepreneur Bookstore.
We'll presume that your desire to open an apparel store isn't because you want to prove to your ex that you're actually hip and happening, or that you're so confident of your style that you need to share that good taste with the community. We'll instead presume that you have an acute business sense, a sincere interest in the clothing business and more than a little cash in the bank.
Opening an apparel store is serious business. For some of you, it may mean giving up the safety of your corporate job with its steady income, paid holidays, vacations and the opportunity for advancement. All this, and guaranteed 12- to 14-hour days. "Running an apparel store is more than a full-time job," stresses Nancy Stanforth, professor of merchandising at Oklahoma State University. "Running an apparel store is something you do all day every day."
Always Room For More
Fortunately, there's always room for the right kind of apparel store. Although you might not guess it by the number of malls and outlet centers cropping up, we're mostly a nation of small, independent merchants. In fact, most retail stores, and that includes apparel stores, are small, both in size and in sales volume, compared to a Gap or Old Navy. The typical apparel store is a small operation, usually run by the owner alone or by a husband-and-wife team.
Here is a handy set of questions that will help you determine whether fashion is indeed your forte.
1. Is this a business in which you have experience?
Maybe you've taken those merchandising classes; maybe you've watched your father, mother or grandparents run a business; maybe you spent a summer selling makeup over the counter at Macy's. In any case, your experience and business sense are as important as your interest in clothes.
2. Can you live with the inherent risk in the apparel business?
This isn't meant to scare you; we're only trying to present a balanced picture. If you're serious about opening an apparel store, you need to know that, like the restaurant business, the apparel business is risky. You may pour your life savings into a business that goes bust within a year.
"Nothing is sure-fire, and there are risks attached to starting any kind of business," says Fred Derring, president and owner of D.L.S. Outfitters, a New York City-based apparel marketing and consulting company, "but you've really got to love the clothing business because you can make more money doing almost anything else. Even in the restaurant business--if you're successful--you can make more money in five years than you can in 15 years in the apparel business."
3. Do you believe strongly in the apparel industry?
On a serious note, you really need to think about why you've decided to open an apparel store vs. a homeopathic pharmacy or an organic grocery store. Whatever your particular fashion passion, it has to be enough to carry you through the yearly holiday rushes as well as the slow summer lulls. It's like marriage: When times get tough, you need to remember why you took those vows in the first place.
4. Is your niche overcrowded or dominated by a few?
It doesn't take a Ph.D. to see that the apparel industry is crowded. All you need to do is save all those catalogs stuffed in your mailbox or visit your local mall on the weekend. But there always seems to be room for more, particularly if you're offering consumers something they feel they're lacking.
5. Can you become a specialist?
If you're opening an apparel store for the right reasons, you probably think you've got the corner on something someone else in your professional community doesn't. Maybe it's surf clothes; maybe it's chic plus-size fashions; maybe it's leather and jewelry imported from Turkey.
Specializing, or finding your niche in this business, is crucial to your success. And in many cases, all it takes is a little common sense. As Kira Danus, a buyer from D.L.S. Outfitters in New York City, says, "No apparel store should be stocking twill khaki shorts if there's a Gap within 10 miles."
6. Do you have a competitive advantage?
In a word, this is called "marketing." For now, hear this collective quote culled from every apparel entrepreneur interviewed for this business guide: "Today the competition isn't two doors down the block; it's at the local mall. People can get everything we sell at their local mall, so we have to set ourselves apart other ways. Pay attention to the demographics in your area, to the location and available foot traffic, to television and movies and what people are wearing on the street."