From rare, vintage fashion to contemporary clothes for all shapes and sizes, shoppers have increasingly turned to the eCommerce market to stock their wardrobes in recent years. But with that opportunity comes fierce competition.
Anyone looking to start an online clothing business will need to have an unequaled knowledge of both their target market and competitors. This makes writing a detailed, flexible business plan an essential first step to successfully launch and sustain your online clothing business.
A business plan will help you determine the startup costs you’ll need to buy inventory, set up an order fulfillment process and establish your online presence. It will also help you set realistic sales expectations and ensure that the revenue you bring in will be enough to cover costs and generate some profit.
In this guide, we’ll show you how to tailor your business plan to meet the needs of the fast-paced online fashion landscape – you can even download a free online boutique clothing store business plan template to help get you started.
The surge in online shopping presents a major opportunity for fashion-minded entrepreneurs looking to enter the online clothing space. But you’ll need to show a firm understanding of the industry, your target market, and the consumers you intend to serve if you hope to carve out a niche online.
As you begin writing your business plan, you should be prepared to go beyond the basics like your company description, focus and management team. While those are certainly important, the business plan gives you an opportunity to describe your store’s unique selling proposition and how you intend to set it apart from competitors.
You’ll definitely be asked what makes your business unique if you hope to secure any outside investment. So take the initiative and start detailing your store’s value proposition here. Maybe it’s that you sell popular clothing styles of old that most shoppers can’t find in stores these days. Or it could be that you emphasize sustainable sourcing and environmentally friendly packaging. The sooner you start thinking about your strategic advantages, the better prepared you will be to defend it to an investor or bank.
You will also need to conduct extensive Research into your target customers, including their demographics (age range, gender, income level and location) and psychographics (values, lifestyles, interests and personality traits).
One way you can do this is by creating what’s known as a Target Customer Persona. Basically, you’re creating a representation of your target market in the form of one ideal customer. To do this effectively, you will need to investigate their current online clothes shopping habits, pain points and customer experience expectations.
Then, realistically assess how your product offerings and brand values align with your ideal customer’s needs and desires. Adding this information to your business plan will provide a clear understanding of who you’re aiming to serve.
In your business plan, document how you will create a unique brand identity that sets your online boutique apart from competitors. This includes developing a memorable brand name, logo, and tagline, as well as defining your brand’s values, voice, and visual style.
Many stores offer customer retention incentives like loyalty programs. If you are considering strategies like reward programs or discounts for returning customers, use your business plan to determine which strategies make the most sense for your online store. It’s also an opportunity to consider the brand-building initiatives you might undertake to capitalize on these programs, such as personalized email marketing campaigns.
Another consideration for your brand – and your business plan – is whether to host your online clothing store on an eCommerce platform or sell through a standalone website. Platforms like Shopify and BigCommerce streamline many aspects of the online shopping process, but have costs of their own that can grow as you try to scale your business.
In your business plan, consider the costs of choosing a platform versus the boost you can receive using a host like Shopify to let it handle logistics like order processing. Then, outline the platform you’ve chosen and the reasons for your decision.
Your business plan is the place to detail your plan for effectively capturing the attention of your target audience and converting them into loyal customers. In your business plan, detail your marketing budget, reintroduce your target customer traits from earlier, and detail the channels you’ll use to reach them. In a space with as much competition as online clothing, you will likely need to use a combination of tactics to reach your target audience. These might include:
Platforms like Instagram, Facebook and Pinterest are powerful tools for reaching and engaging your target audience. Explain how you’ll develop a consistent posting schedule, tailor content for each platform and leverage paid advertising to reach a wider audience.
In your business plan, explain how you’ll nurture relationships with customers and promote new products through email marketing. Discuss your plans to create engaging email content like newsletters, promotional offers and new product announcements. Consider how you will measure the success of your email campaigns through metrics like open rates, click-through rates and conversions.
While it may seem difficult to find the time to create high-quality, engaging content for your audience while running your business, it can be a valuable tool for attracting customers. Whether it’s blog posts, videos or podcast episodes, targeting certain Google search keywords that resonate with your audience will make your website more visible to them as they shop online. Be sure to discuss in your business plan how you will measure the success of your content marketing efforts through metrics like traffic, engagement, and conversions.
Do you know anyone who loves your style? If so, they could be your next influencer. While people tend to think of big-name celebrities when they think of influencers, establishing partnerships with customers who resemble your target audience can help generate exposure and build credibility for your brand. In your business plan, discuss how you might offer giveaways, collaborate on content or produce sponsored posts to showcase your products and build social proof.
No matter how popular a brand you develop, you will need to carefully manage processes like inventory management and order fulfillment to avoid disasters like running out of stock or facing delivery delays.
In your business plan, describe all of the logistical aspects of your business and the systems you will put in place to manage them. These include: inventory sourcing channels, whether they are wholesale suppliers or local artisans; inventory management methods, such as dropshipping, holding inventory in a warehouse or using a third-party fulfillment center; packaging and shipping methods; and return policies.
In addition, describe your contingency plans for how you will manage orders in case something goes wrong with one of your third-party suppliers or other partners.
A key component of any business plan is a detailed financial analysis. Financials can be intimidating for any business owner, but you will need to demonstrate in your business plan that your online boutique clothing store can be both profitable and financially stable. Proving that you have at least thought through the long-term vision for your business could be the difference between securing a loan or investment, or not.
Base your financial projections – ideally a 3-5 year forecast – on market research and up-to-date industry data. You may also want to consider different scenarios such as best-case, worst-case, and most likely outcomes to account for potential fluctuations.
Of course, trends evolve quickly, and what’s fashionable at the beginning of your forecast may be passé by the next season. So staying ahead of fashion trends and understanding the competitive landscape will help with your forecast as you go.
As you research trends in the fashion industry, respond to the changing needs of your customers, and identify gaps in the market that your online boutique can fill. As you do so, you may need to change where you source your clothing, or your marketing strategy, or your distribution channels. All of those will affect your financial forecasts. But that’s a perfectly normal part of the business planning process..
To help get your business started, check out our free online boutique clothing business plan template. You can download this document in Word form and use it as a foundation for your own business plan.
In addition to these resources, you may want to brush up on how to write specific sections of a traditional business plan. If so, take a look at our step-by-step guide on how to write a business plan.
