I've been in the industry for almost two decades and I can't possibly imagine a market that has higher turn over then the boutique industry. I think some good questions to ask oneself are:
- Why does a boutique fail?
- If 8 out of 10 boutiques fail, what can I do differently to find long term success?
Let's start with the first question, why does a boutique fail.
The short answer is that any business usually fails when its cash flow has run out.
A flailing boutique usually gets caught in a vicious cycle of needing to purchase new clothing to get that bump in sales but then not able to sell all of the clothing to get the cash needed for the next batch of new clothing. The cash in hand gets smaller and smaller until eventually there isn't enough cash for continual new items and sales decrease as a result. This cycle repeats until the company has to close.
I think its a good time to stop and say, so what if you fail and have to close.. At the very worse you might break even or lose a years worth of savings. But at least for 6 months to possibly 2 years or more you ran a business that you loved and had fun. I think thats an important lesson that I've taken away, that all of the women who failed making a boutique never regretted it.
So what can you do differently to ensure a long successful business?
There is no simple answer and even if you employed every technique in the book, sometimes the market just isn't open for new businesses to thrive. This may be because of over saturation of boutiques or an economic down turn.
Either way what you want to do is closely watch your cash flow. Being that the reason one fails is diminishing cash flow, you want to make sure you always have enough cash. This means not over purchasing stock, over spending, reducing expenses and rent and ensuring that you take have a strategic mark down strategy to implement to sell all of your clothing by seasons end.
There are more tools and advantages at a boutiques disposal than ever before. Advantages like: instant trends from shopping for wholesale online, massive marketing advantages with social media, an expanding amount of drop shipping companies that allows you to supplement tons of new styles at virtually no cost.
Who you should really be sorry for when it comes to the clothing market are big box stores. The days of big box stores advantages are closing fast, unlike boutiques they have very limited access to instant fashion and social media marketing and their cheap prices are not that far off in price for what a Mom and Pop boutique can offer.
If you're on the fence about starting a boutique then I don't think this is the right business for you to step into at the moment. One thing you will have to come prepared with is hard work and a willingness to endure a lot of tough adversity. ~Best of luck