Clothing Store Business Plan Template
If you want to start a Clothing Store business or expand your current Clothing Store, you need a business plan.
The following Clothing Store business plan template gives you the key elements to include in a winning Clothing Store business plan. It can be used to create an online clothing store business plan, a women’s clothing boutique business plan, or business plans for a men’s clothing store, family clothing store, children’s clothing store and more.
Clothing Store Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here] is a new clothing store focused on upscale children’s fashions. We offer a wide variety of girl’s and boy’s clothing that reflect the latest trends. [Company Name] will offer infant, toddler and preschool aged children’s. Fashions will change with the season as well as with specific holidays and events (Christmas, Fourth of July, Back to School, etc). Gift wrapping service will be provided and gift certificates will be sold.
Products and Services
Below is [Company Name]’s initial product offerings.
- Onesies
- Bodysuits
- Tops (long sleeve and short sleeve)
- Bottoms (pants, skirts, skorts, shorts)
- Sleepwear
- Swimwear
- Accessories
- Shoes
- Sweaters
- Jeans
- Dresses
- Outerwear
Customer Focus
[Company Name] will primarily serve the residents who live within a 10 mile radius of our store. The demographics of these customers are as follows:
- 27,827 residents
- 1,750 workers (who do not live the neighborhood)
- Average income of $54,700
- 38.9% married
- 49.6% in Mgt./Professional occupations
- Median age: 34 years
Management Team
[Company Name]is led by [Founder’s Name] who has been in the retail clothing business for 20 years. While [Founder] has never run a retail store himself, he was assistant manager at another clothing store previously. As such [Founder] has an in-depth knowledge of the retail clothing business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no high-end children’s clothing store in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
- The management team has a track record of success in the clothing business.
- The children’s clothing business is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $330,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $165,000
- Working capital: $165,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.
Top line projections over the next five years are as follows:
Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
---|---|---|---|---|---|
Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new clothing store focused on upscale children’s fashions. Our products are fashionable and desired by parents who want to dress their children in the latest trends. [Company Name] will offer infant, toddler, and preschool age children’s clothing. Featured fashions will change with the season as well as with specific holidays and events. Gift wrapping service will be provided and gift certificates will be sold.
[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the clothing business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented an independently-owned children’s clothing store that enjoyed tremendous success. After several discussions with the owner of the store, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.
Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.
[Company Name]’s History
Upon returning from Fort Lauderdale and surveying the local customer base, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the store.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and website located at www…
- Determined the list of products to be offered
- Determined equipment and inventory requirements
- Identified 20 potential suppliers and received preliminary interest from them
[Company Name]’s Products
Below is [Company Name]’s initial product offerings.
- Onesies
- Bodysuits
- Tops (long sleeve and short sleeve)
- Bottoms (pants, skirts, skorts, shorts)
- Sleepwear
- Swimwear
- Accessories
- Shoes
- Sweaters
- Jeans
- Dresses
- Outerwear
The store will offer free gift wrapping service and sell gift certificates. Transactions will be completed by skilled salespeople, who will offer a high level of customer service and develop ongoing relationships with customers.
Store Design
[Company Name] will develop a 5,000 square foot store that includes the following:
- Main Showroom
- Storage Room
- Check-Out Counter
- Restrooms
- Stroller Locker Area
The retail location has 20 dedicated parking spots, which should suffice even in peak hours.
[Company Name] plans to be open 7 days a week, from 10 AM to 7 PM. As demand dictates, we may extend or reduce our hours.
III. Industry Analysis
[Company Name]directly or indirectly competes with all children’s clothing providers nearby our store. Competition will come from department stores, specialty children’s stores, and discount mass retail stores. Direct competition will come from companies offering high-end children’s clothing similar to [Company Name].
Industry Statistics & Trends
The following industry size facts and statistics bode well for [Company Name].
According to IBISWorld’s industry report, the U.S. children’s clothing market is estimated at $10.4 billion with just over 13,000 establishments. This translates to roughly $800,000 average revenue per establishment. The report says that key competitors in the industry include Toys ‘R’ Us, The Children’s Place, Gymboree, Tween Brands Inc. and Carter’s.
The following detail other trends in the market.
- Population growth is set to be strongest among children aged 5 to 9 years, while the 10 to 14 age group looks set to decline.
- Women delaying child bearing until they are older and wealthier, will have a positive impact on premium, branded products leading to retailers offering designer wear for tots.
- Research and Markets notes “The quixotic nature of the market, where high-end items are desired but the same consumers shop at Target.
- Infant and toddler wear continues to claim the lion’s share of this market.
- Research and Markets also notes “the proliferation of specialty “baby boutiques” and similar stores that cater to upscale and specialty niches.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name]will serve the residents of [company location] and the immediately surrounding areas.
The area residents we serve are affluent and are expected spend more on children’s clothing per capita than the national averages.
The precise demographics of the town in which our retail location resides is as follows:
Wilmette | Winnetka | |
---|---|---|
Total Population | 26,097 | 10,725 |
Square Miles | 6.89 | 3.96 |
Population Density | 3,789.20 | 2,710.80 |
Forecasted Population Change by 2017 | -0.02% | -3.76% |
Population Male | 48.04% | 48.84% |
Population Female | 51.96% | 51.16% |
Target Population by Age Group | ||
Age 18-24 | 3.68% | 3.52% |
Age 25-34 | 5.22% | 4.50% |
Age 35-44 | 13.80% | 13.91% |
Age 45-54 | 18.09% | 18.22% |
Target Population by Income | ||
Income $50,000 to $74,999 | 11.16% | 6.00% |
Income $75,000 to $99,999 | 10.91% | 4.41% |
Income $100,000 to $124,999 | 9.07% | 6.40% |
Income $125,000 to $149,999 | 9.95% | 8.02% |
Income $150,000 to $199,999 | 12.20% | 11.11% |
Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following three customer segments:
- Wealthy Parents: The store will attract wealthy parents looking to dress their children fashionably.
- Twenty and Thirty-Somethings: Whether or not they have children themselves, this customer group has friends and siblings who begin to have children and will be purchasing clothes for them as gifts.
- Grandparents: Grandparents will seek out high fashions for their grandchildren at [Company Name].
V. Competitive Analysis
Direct & Indirect Competitors
The following clothing stores are located within a 10 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Joey’s Clothing
Joey’s Clothing is described by their own marketing as “selection that can’t be beat” and has been in business for 32 years. Joey’s offers a wide variety of children’s clothing for ages up to tweens.
Joey’sfocuses on national and regional manufacturers that sell a wide variety of products. Joe’s generally has low and medium-priced options for each type of clothing. Joey’s does not sell at least 75% of the high-end products that [Company Name] plans to carry. Joey’s is also located on the outskirts of town and lacks foot traffic to its store.
Macy’s
Macy’s is in the mall in a neighboring town and carries a variety of children’s clothing. With national advertising and high volume of sales overall, due to the many departments within Macy’s, Macy’s is well-known in the community as a source for children’s clothing.
However, Macy’s is not seen as a place to shop for gifts for children as the clothing within are seem as uninteresting and relatively low fashion. The majority of shoppers within the Macy’s children’s department are price-conscious mothers, who shop based on sales and discounts offered. Others dislike Macy’s for the long waits at checkout within the store.
Gymboree
According to its marketing, “Gymboree carries high-quality children’s clothing and accessories in sizes newborn to age 12.”Gymboree opened a location five miles way from [Company location] one year ago. Gymboree has been successful, selling fashionable clothing that is still rugged enough to allow children to play.
[Company Name] has several advantages over Gymboree including:
- Gymboree sells only Gymboree brand clothing, limiting its options
- Gymboree is far from the downtown area where customer foot traffic gives greater visibility
- Gymboree does not offer gift-wrap service within the store
We expect that Gymboree will continue to thrive based on excitement about a recognizable chain among some townspeople. However, we expect that more and more customers will frequent [Company Name] based on the location and the fact that we are independently owned and operated.
Competitive Pricing
Joey's | Macy's | Gymboree | |
---|---|---|---|
Sweaters | $10-$15 | $15-$25 | $25-$35 |
Pants/Jeans | $15-$25 | $20-$30 | $25-$35 |
Dresses | $20-$30 | $25-$35 | $35-$45 |
Pajamas | $10-$15 | $15-$20 | $15-$22 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- 5 and Under Focus: [Company Name] will focus solely on clothing for children 5 years of age and younger, which is the fastest growing market segment by revenue. By focusing on younger children, we are able to carry a wider variety of high-end brands for these children.
- Management: Our management team has years of children’s clothing retail experience that allows us to sell to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders and newspapers, as well as clothing suppliers. As such, it will be relatively easy for us to build branding and awareness of our store.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering high-quality, fashionable clothing for children up to age 5
- Rotating clothing to always offer clothing for the proper season geared towards gift-giving
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be individuals living within a 10-mile radius of its store. The Company’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will offer discounts and/or provide other inducements for people to visit the store.
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the store, [Company Name] will organize pre-opening events designed for local merchants and press contacts to create buzz and awareness for [Company Name].
Pricing Strategy
[Company Name] pricing will be appropriate for the high quality and level of service associated with the store. Pricing will be on par with Gymboree, and higher (though better quality) than Joey’s and Macy’s.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General &administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing suppliers and managing supplier relations
- Hiring and training staff
Retail Functions
- Customer service and check-out
- Gift wrapping
- Gift certificate program management
- Display rotation and design
- Janitor/maintenance personnel to keep the store clean
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
Date | Milestone |
---|---|
[Date 1] | Finalize lease agreement |
[Date 2] | Design and build out [Company Name]store |
[Date 3] | Hire and train initial staff |
[Date 4] | Launch [Company Name]store |
[Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]is led by [Founder’s Name] who has been in the retail clothing business for 20 years. While [Founder] has never run a retail store himself, he was assistant manager at another clothing store previously. As such [Founder] has an in-depth knowledge of the children’s clothing business including:
- Store operations and management
- Floor sales
- Display design
- Retail marketing
- Hiring and training workers
- Children’s clothing fashions and trends
[Founder] has personal relationships with salespeople at a variety of high-end children’s clothing suppliers.
[Founder] graduated from the University of ABC where he majored in Communications.
Hiring Plan
[Founder] will serve as the store manager. In order to launch the store, we need to hire the following personnel:
- Assistant Manager (Will handle much of store operations and manage store on [Founder]’s day’s off)
- Check-out and Floor Staff (3 to start)
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of children’s clothing to customers.
The major costs for the company will be cost of goods sold (supplier costs), salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name is seeking a total funding of $330,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: approximately $165,000
- Working capital: approximately $165,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions& Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
Number of customers per day | Per location |
---|---|
Year 1 | 60 |
Year 2 | 65 |
Year 3 | 70 |
Year 4 | 76 |
Year 5 | 82 |
Average order price | $100 |
Annual increase in order price | 6.00% |
Annual Lease ( per location) | $100,000 |
Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
---|---|---|---|---|---|---|
Revenues | ||||||
Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
Expenses & Costs | ||||||
Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
---|---|---|---|---|---|---|
ASSETS | ||||||
Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
LIABILITIES & EQUITY | ||||||
Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
Share Capital | $0 | $0 | $0 | $0 | $0 | |
Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
---|---|---|---|---|---|
CASH FLOW FROM OPERATIONS | |||||
Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
CASH FLOW FROM INVESTMENTS | |||||
Investment | ($246,450) | $0 | $0 | $0 | $0 |
Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
CASH FLOW FROM FINANCING | |||||
Cash from equity | $0 | $0 | $0 | $0 | $0 |
Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
SUMMARY | |||||
Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |