How to Start a Hemp Clothing Store

Start a Hemp Clothing Store by following these 10 steps:

1. Plan your Hemp Clothing Store
2. Form your Hemp Clothing Store into a Legal Entity
3. Register your Hemp Clothing Store for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Hemp Clothing Store
6. Get the Necessary Permits & Licenses for your Hemp Clothing Store
7. Get Hemp Clothing Store Insurance
8. Define your Hemp Clothing Store Brand
9. Create your Hemp Clothing Store Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Hemp Clothing Store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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.

What are the costs involved in opening a Hemp Clothing Store?

You are able to grow your business from a small point upwards. For example, starting an online business may be a good starting point with lower costs. Then, you can work your way up to a retail location once you start doing well. In all cases, starting costs for a typical retail establishment and website are around $10,000 to $15,000 and sometimes more depending on the location. You'll need to purchase products to sell, furnish a location, cover warehouse costs, and handle the website costs.

What are the ongoing expenses for a Hemp Clothing Store?

Keeping your location operational typically involves continuing to pay rent on a leased space, keeping up with utilities, and keeping new inventory cycling through. You may need to pay employees based on the size of your store. Many hemp clothing stores have an online site, which may require funds to maintain it and to market it.

Who is the target market?

Hemp clothing could be beneficial to many people of all ages and styles. The key is educating people on the value of hemp as well as how it can be a better choice for them over other products. The target market for many hemp businesses, including the clothing industry, are people with disposable income who typically seek out organic or environmentally-friendly products. Yet, through educational material and marketing, it is possible to convert others to your business's products, too.

How does a Hemp Clothing Store make money?

Hemp clothing stores sell clothing pieces made of hemp. Your business might sell clothing online as well as offline. In order to make money, your business will need to work out deals with hemp clothing brands to keep products in store (and at the right price to earn a nice margin).

How much can you charge customers?

In areas with a luxury feel, it may be possible to charge premium prices. Companies must take into consideration the costs of doing business, the cost of the products, and profit margins before setting any pricing for their customers.

How much profit can a Hemp Clothing Store make?

Profit margins range from 25% to 50% for a hemp clothing store. There is profit to be made here, but to achieve this goal, companies have to buy at the right price and keep labor costs in line with expectations. In addition to this, costs are really dependent on location. Having a properly-priced space to lease that is more affordable may help to increase profit margins. Advertising costs are likely to be much higher early on when just starting your business.

How can you make your business more profitable?

Profitability involves cutting costs and increasing sales. To do that, you may need to expand to more locations, sell more products online, and increase your sales market. You may want to consider selling men's clothing if you are only focusing on women's, or add in children's items, non-clothing items, or more unique pieces if you do not already offer these and have demand for them. Artisan brands and handcrafted products can help to increase sales, too.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Hemp Clothing Store is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Hemp clothing is a unique product line. It takes someone that understands these products and, in short, is passionate about promoting them. The average American consumer may not know what this product is or the benefits it offers, which is why these business owners have to be willing to step up to educate and promote the items more strongly than the average clothing retailer.

What happens during a typical day at a Hemp Clothing Store?

Starting a hemp clothing store can be local businesses or an online shop. In all cases, the day-to-day tasks involve spending time working with hemp clothing manufacturers (small and large) to purchase a product then list it for sale. There are often instances in which owners need to support customers and answer questions. Marketing is another big part of this type of business.

What are some skills and experiences that will help you build a successful Hemp Clothing Store?

Having knowledge of hemp products is a good start. While there may not be a legal requirement to have a degree in the field or to have any sales experience, doing so is going to prove valuable. Experience managing profit and loss, setting prices, working with sales, marketing, and working in customer service industries will all prove useful. You'll need to be able to manage the process of purchasing quality products from distributors and manufacturers and negotiating the best price for those items, too. A hemp clothing business – even one that operates just online – also takes good organization and people-management skills.

What is the growth potential for a Hemp Clothing Store?

If a company does well with one location, they may be able to expand. If you are starting out online, you may be able to grow your online store by introducing new brands or a different line of products. Over time, hemp clothing stores can also build their business into a franchise spreading their hemp, good-for-the-planet products around the globe. There's really no limit to growth, but getting there takes a lot of hard work.