Starting a Retail Clothing Store Business

February 11, 2012 | By | 5 Replies More

QUESTION ON Starting a Retail Clothing Store

clothing store ownerA friend and I are wanting to start a retail clothing store. We are doing our research on grants, loans and the such, but my main question is where to start once we do get the money. Do we look for locations immediately and secure one, or do we look for inventory, or so on? I also would like some advice. We are both young, in our early 20’s and want to be taken seriously (as we are quite serious) by bankers and landlords, any suggestions or advice? Thank you so much.

– Anna


Dear Anna,

First things, first: start with a business plan. A business plan will help you secure financing for your business; as well as help you map out the direction you will take in jump starting your retail clothing store business.

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 Just fill in the necessary details about your business. Also check out our listing of free sample business plans. 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.

Getting a bank loan is NOT easy, more so during these tough economic times. The banks will want you to prove that you have the resources to repay the loan — even if the business will not work. Banks tend to look at existing businesses with solid financial performances more favorably than a new startup business.

If and when the banks still will consider you, they will ask for a collateral and look for assets. If you don’t have a property to use for that purpose, you may not have the chance of getting a bank loan. Banks also look at your experience in the business, as they want to assurance that their money is actually used well in the 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.

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.

You need to line up alternative sources of financing, especially if you don’t have the requirements needed by the bank. Perhaps Aunt Mathilde has some cash that you can borrow? Also look at crowdfunding as an option for raising the funds that you need.

As for government grants, 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, much less a retail clothing store. You can check with the Catalog of Federal Domestic Assistance (CFDA) at, which lists all grants that the government gives, and, which is the government’s portal for grants. We prepared an article on how to get grants and resources to help you find these grants. You have a better chance of winning grants if you find those that focus on women and youth — those are your best bets. Check out the Foundation Center’s database of grants for individuals.

For your next question, I recommend that you read my article, “Starting a Product-based Business” which can give you some hints on what to do. It will give you a step-by-step approach to starting your business.

Of course, you don’t have to have a location immediately but it will help you much if you have one. 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, or 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. I also recommend reading the blog post Growing Your Retail Store Business. The book featured in that blog post The Retail Doctor’s Guide to Growing Your Business: A Step-by-Step Approach to Quickly Diagnose, Treat, and Cure is an excellent primer of what you need for your retail store to succeed.

Good Luck!

Nach M Maravilla

Recommended Resources on How To Start a Retail Clothing Store

Article originally published in June 2001. Updated February 11, 2012

Nach Maravilla is the President and CEO of LLC. 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.

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Category: Business Types, Q & A

Comments (5)

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  5. jelly andrews says:

    Thanks a lot for sharing this one. I agree with this. You should really start with a plan. It is important that you visualized what your business would look like and how will it goes.

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