For small businesses to succeed, they must fill a niche that does not exist in the local marketplace. A niche can be defined as offering something special, to be highlighted, worth seeing and most importantly, different. Small businesses have found that for them to be different and gain customer recognition, they need to focus on a smaller segment while building brand identity.

However, it is not enough to specialize in children’s wear, maternity clothes, men’s clothes, teen’s wear, and others as carrying these products simply puts a small store in competition with department stores. Like any other market, the Goliaths of the apparel retail business ­ the big department store conglomerates ­ present stiff competition to small businesses in terms of pricing, merchandise variety, service capabilities, and advertising.

When starting an apparel retailing business, you have two choices: either to create your own brand or sell other brands. Own brands definitely offer higher margins over non-store brands, although average margins in apparel retailing could be anywhere between 40 and 50 percent.

You also need to think of the kind of merchandise that you will sell. You can offer couture or designer lines at premium prices. You can also offer bridge lines, which are usually made by designers but are of lower quality compared to the designer labels and are sold at lower prices. Some small businesses decide to offer closeouts & discontinued clothes, which are sold by manufacturers or retailers at the end of the season or will not be carried the next year. Another alternative is to offer factory-seconds or irregulars, which are clothes that do not meet the manufacturers requirements in quality (color not right or some flaws in production).

You can also choose to create your own store from scratch, or buy an existing store. Buying a store that has been in business for years is easier since you will already have a known location and existing customer base. However, you may also have to work hard to undo the previous image of the store, if you are not satisfied with it.

The first step to starting a clothing retail store is to develop its concept. This involves picking a very specific niche market that is not being filled and has the potential to sustain your store.

You may want to conduct some market research to help you narrow the focus of your store. Learn the age range of your customers’, their spending habits, frequency of purchases. Also consider what type of service you will offer and the price range of your goods.

Below are some of the profitable niches in apparel retailing:

If you will focus on this niche, make sure that you keep up with trends. Your licensed products must always be fresh as consumers are demanding clothes that are both fashionable and with real benefits for young children. Children today are more mobile and autonomous, and they need clothes that respond well to their activities.

As a retailer, however, you will be faced with stiff competition from imports and the declining birth rates in the western world.

In the United States alone, a study conducted by NPD Group, Inc. and the market research firm HealthFocus®, Inc called “The Skinny on Women, Health, and Diet” found that 54 percent of all U.S. women over the age of 18 are overweight. The study, a survey of more than 2,000 nationally representative households, defined overweight as having a body mass index over 25.

As a result, the market has responded to the clothing needs of the large sized group, as boutiques and retail shops for plus-sized women, tall and heavy men, full-figure women have proliferated. Designers who have previously ignored this market are now providing larger versions of their chic outfits. More retailers are carrying whole lines of outfits geared for the plus-sized set.

The retail clothes market for plus-sized women alone has enjoyed tremendous growth in the past few years, posting $26 billion in sales in 2000. This proves that larger women want to wear nice clothes, too. Hence, several niches within this market have emerged ­ plus-size businesswomen's clothes, loungewear, casual wear, and active wear.

The maternity retail business has come a long way from offering dowdy, muumuu style maternity clothes to those that helps women celebrate their style and look sexy even as their body changes. Clothes offered for pregnant women in the market now include hip and sexy maternity clothing, athletic wear and corporate clothes. After all, as pregnant women’s waistlines balloon, their lives and careers go on as usual. Professional women, for example, used to wearing smart career outfits would still want to wear suits and clothing suitable for work.

What kinds of clothes can you offer in your maternity retail store? First, it is important to remember that pregnant women want good fit in clothes. A pregnant woman needs clothes that fit her growing belly, without looking like she’s wearing her husband’s clothes all the time.

You may also want to choose merchandise that provides maximum versatility. Most retailers offer starter sets that contain matching shirt or blouse, skirt, pants and shorts. Others include suits. These clothes are designed for lots of occasions, from office to receptions and dinners.

Choose clothing that lasts the life of a pregnancy. Pregnant women are looking for clothes that could last into the last month and looks good post-pregnancy.