Start a baby store by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your baby store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a baby store?
Whether you are buying into a franchise, or starting out on your own, the investment required for a new baby store is significant. You will need capital for leasing/purchasing the storefront, initial inventory orders, hiring staff, point-of-sale systems, accounting computers, display racks, and living expenses for the first three years. You should not be surprised to need between $250,000 and $500,000 to start-up. If you are going for a big-box style store, minimum investment will be at least $1 million.
What are the ongoing expenses for a baby store?
Your payroll will be the largest controllable expense. Otherwise, maintaining inventory will always be a huge line item in your budget. Maintaining the property and computer systems comes in third.
Who is the target market?
Anybody who is expecting a baby, has a child, or knows somebody with children. While more profit per item can be made with a more upscale boutique, a budget friendly store will always be in high demand. Practically the entire world is your potential customer base.
How does a baby store make money?
You will be purchasing your products at a wholesale rate from a variety of manufacturers and distributors. You earn a profit by selling them at a retail rate.
How much can you charge customers?
You will need to actively run comparisons of baby products priced online and in your area. You may be selling some items for one dollar, while furniture can run in the thousands.
How much profit can a baby store make?
Hugely profitable international children's stores can generate annual income of up to $5 million per location, but a small boutique may see annual sales of around $150,000. The average personal income for a boutique owner is around $50,000 per year. The average net profit for apparel is between 5% and 10% while furniture offers better profit per piece, but much lower volume of sales.
How can you make your business more profitable?
You will need to find the balance of low-profit items that are always in demand like clothing, diapers, and small toys and offer an enticing mix of high-profit items such as furniture, accessories, and home decor pieces in order to ensure constant repeat business and encourage impulse sales.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your baby store is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: You can get $200 when you open a Chase business checking account with qualifying activities. Learn more.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a baby store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certificate of Occupancy
A baby store is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a baby store.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your baby store will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a baby store
Your name and brand must appear anywhere that a new or expecting parent visits. This can include OB/GYN and pediatric offices, the library, civic centers, gyms, and day care centers. A direct mail campaign can target homes that are actively seeking baby services. You may wish to launch a website with a blog full of baby advice or create social media accounts that interact with new parents in the area. Inserts in Sunday newspapers and carefully positioned online ads will put your store's name in front of as many potential customers as possible.
How to keep customers coming back
Your Grand Opening party should be fun and exciting. Hire a bounce house, clowns, face painting, and a snack station to create a festival atmosphere. Of course, you will want to offer some specials to get customers in the door to check out your beautiful and fun new store. For the first six months to a year, you may need to run specific bargains while you build your customer base. All those happy clients will return when you provide quality and unique products at a competitive price and provide exceptional customer service.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Baby Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you enjoy working with families and children, and also relish the challenge of maintaining a retail establishment, you may enjoy operating your own baby boutique. Business management will be a large part of your day, so the right person will have some solid knowledge or experience in that area.
What happens during a typical day at a baby store?
When you run your own baby store, you will be:
- Matching customers to the right product that fits their style, budget, and needs
- Completing sales
- Finding new products for your shelves by curating new vendors and product lines
- Hiring and training sales staff
- Balancing your books
- Maintaining the store--keeping it clean and in good shape
- Creating marketing campaigns that generate new interest among the community
- Setting up your own online store which requires a wrapping and shipping station
- Creating attractive displays in the store that helps your customers find the items for which they are looking
- Working weekends and extended hours, especially during holiday periods
What are some skills and experiences that will help you build a successful baby store?
Before you decide to open your baby boutique, you will need to know:
- Business management skills
- What the trending styles are
- Basic accounting skills
- Inventory control procedures
- Personnel hiring and training procedures
- Best customer service practices
- Current styles, products, and pricing for everything available in the baby store market
- The demographics of your target location to help build a store that meets local demand
- Accurate profit and loss projections for a start-up
What is the growth potential for a baby store?
If you should develop a unique shopping atmosphere with a selection of products that your customers can't get enough of, it is possible to expand your hugely successful single storefront to a second or multiple locations. Since people will always have babies, there is always room in the market for a fresh look at baby stores. Your commitment to style, price, service, and selection will determine your future success in this business.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a baby store?
While your new store should have a selection of unique toys and styles that can't be found at the competition, there are plenty of basics you should stock, too. When parents can buy everything from diapers and bibs to bottles and cribs, they will come back in the future. Coordinate with local day cares, labor units at your hospital, and other kid-central locations to cross promote products and services. You might want to rent booths at health fairs, town parades, and other public events and offer balloons or coupons to get name recognition within the neighborhood.
How and when to build a team
If you are opening a large store, you will start hiring management as soon as the location is ready for occupation. Your sales staff can be brought on board two weeks before opening.