First things, first. Start with a Business Plan. If you are starting from the ground, Banks or any lending institutions whom you are looking up for a loan, will definitely require you to submit your Business Plan. That will be their basis as to whether they will avail a loan for you. To give you an idea on how to make the "Plan" you can use the guide that is developed by the Howard University Small Business Development Center at http://www.ntia.doc.gov/opadhome/mtdpweb/busplano.htm  Just fill in the necessary details about your business. The business planning process is essential to help you flesh out your ideas and really think through what you need to do to make your business work.

When applying for a loan, the banks may ask for your past sales performances for which definitely, you don't have. Without it, they will ask for a collateral. If, you don't have a property to use for that purpose, you may not have the chance of getting a bank loan. It is strange to think that banks keeps on advertising about how easy it is to get loans but they ask for so much security when you try to apply for one. You may want to read the article "12 Tips on Getting Your Bank Loan Approved" before you meet with them http://www.powerhomebiz.com/vol12/bankloan.htm 

Government Grants are normally given out by the government to non-profit organizations or a project-based activity. Rarely are there any grants to help start out a business. You can check with the Catalog of Federal Domestic Assistance (CFDA) at http://www.cfda.gov , which lists all grants that the government gives. You may find a grant that you may qualify. We prepared an article on how to get grants and resources to help you find these grants, and you can find it at http://www.powerhomebiz.com/vol66/grants.htm . Try to find grants that focus on women and youth - those are your best bets.

For your next question, I recommend that you read my article, "Starting a Product-based Business" http://www.powerhomebiz.com/vol40/product.htm  which can give you some hints on what to do. It will give you a step-by-step approach to starting your business.

Remember, no financial institution will take you seriously if you have nothing to show that would convince them that you and your friends are worth risking their money with. If you have no collateral, one strategy would be to bring someone with established credentials (known in the community or in the field) as part of your management team - perhaps in an advisory capacity (if you are not looking for an investor). That would send a very strong signal to banks, financial institutions and leasing companies that you two are serious about this business. Of course, your next task would be to find that someone, and convince him/her to support and endorse your business.

Of course, you don't have to have a location immediately but it will help you much if you have one. My article, "Starting Business from Scratch" http://www.powerhomebiz.com/vol18/scratch.htm  will give some more tips.

You may need some inventory of items representative of what you intend to sell. Try to limit your inventory to specific categories. Try to specialize. Will you be in Women, Men, Children's clothing? You can have a little of each. It all depends on how much you can afford in the beginning. If you are limited with funds, try one line first and move as you progress later on.

We prepared a comprehensive article on starting a clothing business that may give you some ideas in setting the direction of your venture. You can find it at http://www.powerhomebiz.com/vol66/clothing.htm 

You can take a look at these books, if they can help you in your decisions:

So You Want to Own the Store : Secrets to Running a Successful Retail Operation by Mort Brown, Thomas Tilling http://www.amazon.com/exec/obidos/ASIN/0809232367/ref=nosim/powerhomebizguid 

Start and Run a Profitable Retail Business (Self-Counsel Business Series) by Jim Dion, Ted Topping (Contributor) http://www.amazon.com/exec/obidos/ASIN/1551801000/ref=nosim/powerhomebizguid 

Good Luck!

About the PowerHomeBiz.com Guide: 

Nach Maravilla is the Publisher of Power Homebiz Guides. He has over thirty years experience in sales and marketing of various products, which covered as he jokingly describes, "from toothpicks to airplanes"  He also had extensive experience in International trading and he always excelled in special promotional ideas for  retail outlets. 

The opinions expressed in this column are those of the author, not of PowerHomeBiz.com. Users should not treat the Guide's response as legal, accounting, or professional advice as all answers are intended to be general in nature. Such advice can only be properly given by qualified professionals who are fully aware of a user's specific geographical areas or circumstances, such as an attorney or accountant.