From the Vault: Top 5 Tips for New Boutique Owners

Okay.

If there is one question or one series of questions, I get asked all the time, it is tips for brand new boutique owners. So in this week's bonus episode, I wanted to bring you back to my top five tips for brand new boutique owners. Because those of you who are getting started, man, it's tough out there, but there is such an opportunity out there, and I want to make sure that you get started on the right foot. I know when you look at Instagram, it seems like owning a boutique look so easy. Well, there's a lot to it. And so I want to make sure that we're thinking about the retail art side of the brain and the retail science side of the brain, and you are putting your best foot forward with.

Your brand new business.

So let's get into it. My five top tips for brand new boutique owners. Let's talk about your business strategy and the juicy details of what actually works.

From mainstream fashion to fashion on Main.

Street and the entire ecosystem behind it. How do we scale your company and.

Do it with a balance and the.

Happiness that we all seek? Let's hear from those insiders, experts and.

Strategists that actually make it happen.

I'm your host, Ashley Alderson from the Boutique Hub, and I can't wait to chat.

Hey, guys. Welcome to a very special episode of Boutique Chat. This week, there's no guest, no interview. It's just you and me, and we're here to talk about what it's like for those of you who are brand new to this boutique world. Maybe it's those of you who are newer to business. Maybe you are just starting your boutique. You're into it about a year, or maybe you're into it two years, but you're just starting to really take it seriously. Or maybe some of you are listening who haven't yet taken the plunge, but you're thinking about it. I want to make sure that amongst all the information you can find on the Internet through Google searches or through your membership at the Boutique Hub that we cut through the noise and break down. Top five tips for those of you who are brand new to this industry, because it's a tough one. Right? I want to share some highlights, but also some things that you should be aware of in this industry. And then again, five tips to help you start your business off right, Making sure that you're preparing yourself for the future and this opportunity as a business owner. Now, many of you probably got started in this business because you love clothes, right? You wanted the freedom and the flexibility of owning Your own business, which is great, by the way, if you are a mom, you're able to stay home with your kids, you're able to run to appointments and have flexibility that corporate America frankly doesn't allow. And if you love fashion and if you love people, there's no better way to connect with them than through owning your own boutique. I remember my first experiences with boutiques. I loved the fact that I felt like these people understood me, right? They had these unique, beautiful products that I couldn't find anywhere else. And when I went into the store, I felt like I was actually being served. It wasn't like going to a mall and just sifting through some endless clothing rack trying to dress myself. I felt at home with boutiques. And so it's no surprise to me that the industry today is blowing up the way that it has. Especially with the deterioration of big box retail and all of these mall closures. More and more people are going back to doing business with people and doing business with small businesses. Hence the rise in opportunity of boutiques, not to mention the ease of social media that makes starting an online boutique easier than ever. Now, there's lots of glamorous pieces to the job, right? Traveling to market and all the things we get to do on a daily basis as boutique owners. But I also want to cue you in on some of the not so glamorous parts of being a boutique owner and owning your own business. Because in retail it's nights and it's weekends and it's holidays and there's times when more than anything, as a business owner, what you want to do is go sit on the couch with your husband and family, but you're busy, you're tied to your phone, you've got orders to fulfill. There's nights where they're sleepless nights because you're worried about payroll or how you're going to make it or how you're going to cover this. So, surprise letter that came from the IRS this week. With some unknown amount of taxes that are now due, there's a lot of stress that comes with owning a business. And so while it's glamorous, I want you to be prepared for both sides of the coin, right? Because there's a lot of new boutiques entering this market today, but not all of them are going to make it. So if you're serious about this business and making it a long term run for you and your family and you want to know that you're investing your money wisely, I want to make sure that you get Started the right way. Are you with me here? So let's talk about these five essential tips that you need to start your business and operate your business in year one, the right way. So you're building with the end in mind, and you're building a business with some sort of longevity, not just a hobby. Hear me? All right, let's start with number one. First tip to making this business in the long run is do it legal. We see so many new boutiques today who simply get started by finding some clothes to flip and posting them online. But I want to remind you that making sure your business is legal from the get go is crucial. Now, there's two key ways I need to make sure that you do this here. The first is by filing with the IRS and getting your own EIN number. That's your employer identification number. And the reason that you do this is when you start your business entity, whether you choose to be a sole proprietor or an llc, or you go all in and start as an S corp, you need to have a way to protect yourself and your own personal Social Security number. And that's what your EIN number does. It gives you identification with the irs. And yes, it does mean that you're going to have to pay taxes. Now, this is a really important part. I want to make sure that you visit with your accountant and you understand, if you're new, how you're going to set up as either, again, a sole proprietor or as an llc. Because an LLC does give you a little extra layer of protection between you personally and your business. So you might visit with that accountant, make that decision, and again, get that EIN number right away. The second thing that you need to do right away to make it legal is making sure you're filing to get your state sales tax permit, because clothing items and decor items are taxable goods. So you're going to have to pay sales tax on these items, you're going to have to collect the tax, and you're going to have to pay the tax. So what this also means is not only having the permit is critical, but having your bank accounts set up in a way where you're actually collecting and saving that tax is also critical. As a business owner, no matter what business you're in, making sure that your personal finances and your business finances are separate is key. And then in terms of your business finances, having a separate checking account and a separate savings account so that when you collect sales tax, it can go right into your savings account and you aren't tempted to spend it on new inventory because Trust me, that happens all the time. Hear it all the time, I promise. The second thing to know, not only are you collecting and paying sales tax, but you also have to prepare for income tax. If you're new to this arena income tax, you can just budget that it's going to be about 30% of the funds that you keep. So if you make money at the end of the year, if you're paying yourself a draw and not actually on payroll, that's money that's coming to you personally. You have to know that about 30% of that, the IRS is going to come and collect from you. So. So again, every month or every quarter, however you want to do it with your books, make sure that you're saving that money and putting it in your savings account and you're better off to be safe than sorry, right? So save more than you actually think you're going to need. Because trust me, when you get a bill for $10,000 or 30,000 or 80,000 in the mail, it's a bit of a shock. So do yourself a favor, save for taxes and make sure you're building your business legally. Number two. And man, you guys, this is a common, common, common mistake for new boutique owners and even boutique owners who've been in business for a couple of years. And this is that pricing matters. Trust me, cheaper is not better ever, right? Being the cheapest Betty on the block does not build your business, it does not build your brand, and it certainly does not build long term success. In fact, in my opinion, when you build in terms of cheaper being better, you, you are setting yourself up for major failure. Now, you can tell yourself every day of the week that, oh, I'm going to do more business if my prices are cheaper than so and so down the street. Well, you might for a while. But I really challenge you to know your books and to know what are my expenses, what's my maintained margin at the end of the day? My margin is the percentage of money that I get to keep after we take markdowns, right? And then out of that margin, we pay our expenses and our payroll and our rent and we still have to invest in new inventory. That's the critical number to know. I also want you to know that being a closed flipper and taking less money for your goods, it doesn't build loyal customers, right? It builds bargain shoppers. Bargain shoppers at Walmart aren't loyal to Walmart. They're only loyal to a good deal. So when they're looking for where to buy their next outfit, they're just going to whoever is cheaper is better. Now, if you really want to build a long term business, the most, the most best, the best piece of advice I can give you is that people want to do business with people. They want to go where they feel connected and loved and served and understood and where they have a relationship with the boutique and the boutique owner. So if you look at any businesses throughout history who have that level of success, it's because there's a level of brand identity associated with it. So right from the get go, when you're pricing your products, keep in mind cheaper is not better, but building value is best. And your ideal price points for products are where the idea of perceived value outweighs the pain of perceived price. Let me repeat that. The ideal price point is where the perceived level of value. So better quality, more trendy, can wear a number of ways, can wash more than one time without falling apart. All these things add value, right? Where that exceeds the pain of paying that price. So if I know I can pay $50 for a top that I can wear and wash hundreds of times versus paying $20 for a top and it's going to be destroyed after its first time through the washing machine, what do you think I'm going to buy? I'm going to buy the more expensive one, right? But it's up to you as a business owner to outline and identify that for your customers and educate them on what the value is. Now if you're new to this business, you're probably going to hear a term keystone pricing when you get started. Keystone pricing is marking your items up two times. So if you buy something at wholesale for $5, you turn around, mark it up twice and sell it for 10 from the get go. I just want you to know that after you pay your expenses and after you take markdowns, because some things are not going to sell right away and you're going to have to put them on sale to get them to move. You're not going to have anything left with keystone pricing. So try to avoid cost based pricing and instead understand how can you price items at what their worth is in the marketplace and what they will go for. Now sometimes that's going to be markups around 2.5%, but other times with jewelry and accessories, it's going to be 8, 9, 10, or if you're buying off price 11 to 15%. The higher the better because the more items you can get a better maintained margin on, it's going to make up for the losses that you take on Items that just simply don't sell because that happens for everyone and you're not going to be the exception to the rule. There will always be something at the bottom of the barrel that just didn't go like you hoped it would. So avoid cost based pricing and know that cheaper is not better. Now, under this topic, let me get on a little bit of a touchy subject for a minute, but it's something I can't avoid talking about. It's far too important in today's industry, especially with Facebook groups. There's all kinds of Facebook groups called buy in groups that I want you to be aware of and I want you to stay away from. Now, what a buy in group is, it's a boutique owner. Actually, there's a couple different definitions. Let me tell you about the boutique owner. Buy in groups. First, this is where you would say, hey, customers, I'm thinking about ordering this item at wholesale. Tell me who wants to go in with me on this order so that we can get it all and I'll ship it out to you once it comes in. And you're basically selling those things at wholesale. Now, some people also call this taking pre orders. Now, I want you to know that this is a bit of a scary deal because most often the buying groups that we find online, Facebook's been cracking down on because they've been ordering from some knockoff companies, some overseas companies, and not getting products that are as they were described. It's a very quick way to ruin your reputation in this industry because first you're making customers wait a significant period of time between when they give you their money and they place their order and when the items actually shipped. There's also no way for you to do quality control and understand what it is you're ordering. There's no margin when you're selling things at wholesale directly to your customers, meaning you're just working for free and you're buying yourself a hobby that's building no long term, long term income or impact for you and your family. It's actually costing you time and money, right? And it's a quick way for someone to have a bad experience and tear you down on social media, which nobody wants to deal with. So with all that you have, please avoid pre orders and buy in groups because it's a quick way to get upside down. Now there's also wholesale buying groups where a number of boutique owners go in on items from overseas to bring into the States. I would also be really careful with these because most often these goods are copyright or they're trademark protected. And there's knockoffs that are being bought and sold all the time. And some of these things, if you're buying knockoff Louis Vuitton bags or any type of designer item or makeup, you can find yourself with a felony and end up going to prison for this. And we've again been seeing Facebook crack down on these things. So be very wary of anything you see with the term buy in associated with it. At the end of the day, when it comes to pricing and selling your goods, just remember this. People want to do business with people. They want to do business with someone they have a relationship with and that understands them. So be that person for your customers and then offer them value. And that's where pricing becomes most important. Number three, this one is all about you. Do you boo and let everything else fall by the wayside? You do you Meaning copy is not flattery. Whoever said imitation is the most sincere form of flattery was a liar and had clearly never been imitated in this way before. Because as a small business owner, when you pour your blood, sweat and tears and your family's time and hard earned money into starting a business, when someone comes along and copies it, whether that's taking your business name or taking your photos that you had done by professional photographer, copying your product descriptions, trying to knock off your brands, or if you're a graphic tee designer, taking your graphic tee designs and then claiming that you found them on Pinterest, it's not real, it's always an imitation. And just like I mentioned before, when we're talking about pricing strategy, people want to do business with people. So what I invite you to think about here when you're being inspired is how can I be inspired but do something that is completely me, that is completely my own, and how do I build my own brand in the process? You know, a couple weeks ago on the podcast we had Ali D as a guest and she said something so profound that I'm not ever going to forget. And that is, are you a close flipper or are you a brand builder? And I think it's pretty obvious what the difference between the two is. So close flippers, buy in groups, you name it, are going to find the cheapest way to and from the market, right? The quickest way to get the dollar in your pocket. But the brand builder is really the one who's interested in building a long term sustainable business that truly can impact your life and your family and your community and your staff. So I invite you in terms of starting your Business to be as original and unique as you can. Create your own content, create your own high quality photos, create your own designs. You do, you boo. Because copy is not flattery. Okay, number four. Number four is go to market. It's really easy as a brand new boutique owner to be on Fashion Go, who I also recommend by the way, and a number of online websites or Facebook groups where you can buy wholesale. But I don't want you to lose sight of the true market experience. Now, there's several great markets that we've been fortunate enough to attend and to work with and host events at ourselves at the Boutique Hub. And I would recommend that you pick one that fits you and that you go. Because at market, that's where you get to actually touch and feel product. You get to see and understand the industry as a whole and how it works. It's also where you can negotiate more than you can online and you can most importantly, build relationships with companies and reps that you want to do business with time and again. Because the wholesale retail partnership is truly a partnership. It's not a transaction where you're just buying something to flip it and make a fast buck. But if you're interested in building a brand, you're interested in partnering with a wholesale brand that's going to support you along the way and really be able to tell your style story. So go to market, whether that's Dallas or Atlanta, or go to Vegas to any of the shows that UVM puts on. There's a lot of great options out there, but I invite you to just go. And finally number five, and that's to be consistent. Be consistent. I think it's really easy as a new business owner, and I've been there myself, to compare your beginning to someone else's middle, to think that you're behind because you just started this business and you should be where so and so is because it looks so easy for them. But social media is smoke and mirrors, isn't it? It's an easy way for us to put someone else up on a pedestal and not understand the real numbers behind their business and what's happening on a daily basis for them. So just remember to set goals for yourself. To know how can I do better tomorrow than I did today? And then celebrate when you get there. Because as you grow, you're going to continue to hit milestone after milestone. But if you don't know what those are, you can't celebrate them. Right. It's important to enjoy the journey along the way. I'll never forget the statement that Ben Clark said to Eric and I one time when we were staying with he and Becca. Ben and becca own Kiki LaRue, a phenomenal online women's boutique based in Texas. And Ben said, you know what guys, it's not when you make your first million dollars that matters. It's enjoying every step of the way as you get there. And I want to invite you to think about that too. When you're new in business, it's going to take a while for it to take hold, to take off, to build an audience. Success doesn't happen overnight. It happens with people who are consistent and persistent and see the long term vision and believe in it. So I invite you to understand what is that vision? What are you going for, what's the goal, and what simple action can you take consistently on a daily basis to get there? Now, this means building your brand, building social media content, building lifestyle content, great photography, and it also means to know your numbers so that you can grow. Those numbers only attract Number grows is probably one of my favorite quotes of all time. So don't forget it. Make sure you're sitting down every day and tracking where you are and where you want to be and watch those numbers grow over time. Guys, thanks for listening to these five tips. If there's one last thing that I want to leave you with, it's this that the boutique hub and your business as a whole is meant for community over competition. It's so easy to get into business and to worry about, like I said, what everyone else is doing. But remember that business is better together and it can be really lonely at the top. Once you reach your goals. If you've got no one standing next to you to celebrate with you, then what was the point, right? So who can you bring along this journey with you to celebrate every single step of the way? I invite you to look at others in the boutique industry as your community, as your sisters, as those who have been there and they're in the thick of it with you. If you're a member of the hub, that's awesome. I'm sure that you've already found several boutique besties inside of our community that you can chat with on a daily basis. If you're not, I invite you to find someone who can be your go to. And if you have other boutique owners near you, don't be afraid to reach out to them. I'll never forget back in my days of economic development when a local retail store actually came to me because the store across the street from them had closed and they said, ashley, we're so concerned about this business across the street closing because they helped. They helped us. They built more traffic for us. And I said, you know, I'm not sure I understand what you mean. I thought they were your competition. Wouldn't you be happy that they closed? And they said no, because where two or more businesses are together, they become a shopping destination. So never lose sight of that in your own community. Where two or more businesses band together, you become a destination. Don't be afraid of your competition. Embrace it and find ways that you can work together and collaborate with one another. And guys, be proud of yourself. Be proud of yourself that you're here on this journey and that you're doing something that so many people fear. You're going out on a limb, you're taking a risk, and you're building a business to support you and your future. So just remember, be a brand builder, not a clothes flipper. And I wish you all the success in the world along them the way. All right, guys, I'd love to know what you think about this week's episode and about the top five tips to help you build your boutique in year number one. I'd love to know specifically though, what's the best piece of advice that you've ever gotten in business? The best piece of advice? What is it? Message me over on Instagram J. Alderson, and I'm going to be featuring your guys answers and your boutique or your brand each show in the month of July. So again, what is the best piece of advice that you've ever gotten in business?

I can't wait to see your answers.

This is going to be so much fun to share them with everybody.

My handle is ajalderson and send me a DM anytime. I'd love to catch up with you and hear all about your business. Now, I think you and I both know this is the tip, tip top of the iceberg and there's a whole lot more information to cover. And this is something that I am deeply passionate about and the whole reason the Boutique hub got so much started in the first place. So know that if you're not already maximizing the training library inside of the Boutique hub, there are gems of golden information in there. So please make sure you're using that to its fullest potential and not just listening, but taking action on what you hear. We update that training library each and every month at the Boutique Hub, either from our team and our experiences or from guest experts around the industry that we bring in to share their knowledge. With you or on a regular basis. And if you're not already using the groups at the Boutique Hub, specifically our membership group, that's a great place to come and ask questions about your business where either we can jump in and help support you or those boutique owners who are right alongside you in business can give their two cents as well. The only silly question you guys is the one that you don't ask. So make sure you're getting your business started off right. Surround yourself with people who who want to see you successful and take these tips and run with them. All right guys, if you have any more questions for me about this episode, DM me directly over on Instagram. That's the quickest way to reach me and to have a one on one chat. Okay guys, tune in next week where we have a guest coming that is probably going to be one of my favorite episodes yet and it's going to be all about Facebook Live. You're not going to want to miss it. So we'll see you next week on Tuesday. Petite Chat.

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