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 step guide to starting your purse 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 purse store?
An initial investment in merchandise and the rental of a store space will constitute the majority of initial costs. In addition, you will need to set aside money for:
- Utilities deposit
- DBA vendor’s license
- Appropriate insurance coverage
- Store interior design and decor
- Racks, counters, jewelry cases, mannequins, and other in-store display items
- Advertising and marketing campaigns
- Business cards and marketing materials
- Computers and POS software
- Website hosting and design
- Logo and trademark (if applicable) design
- Grand opening event
Experienced retailers suggest a minimum budget of $50,000.
What are the ongoing expenses for a purse store?
A purse store doesn’t require a large amount of space, but does need a prime location to attract customers. Therefore, rent will be a primary expense. Your employee numbers will more than likely start small, which will keep payroll and payroll taxes lower, initially. Other expenses will include:
- Merchandise investments
- Advertising and promotions
- Marketing and PR
- Travel and market research
- Telephone and internet
Who is the target market?
Specialty purse shops will primarily focus on customers with substantial incomes, who wish to remain fashion conscious. You will also attract customers who are looking to invest in quality or hard to find items.
How does a purse store make money?
A purse store makes money from the sales of purses, handbags, or other related items, such as wallets, tote bags, briefcases, or luggage.
How much can you charge customers?
Most purse stores offer merchandise between $200-750. Depending on the types of purses you’re selling, though, pricing can rise to the upper thousands. Some specialty bags will crack six figures.
How much profit can a purse store make?
Profit margins will always be relative to the size and scope of the business. For a smaller business, with few employees, yet high-ticket merchandise, the margins will improve, as long as customers are purchasing these high-ticket items. An average boutique style business can net anywhere between $30,000-70,000 annually.
How can you make your business more profitable?
A purse shop or other boutique style shop can generate a large amount of revenue through online sales through the store’s website. Being able to reach a buying market that isn’t in your region is key. Additionally, many purse stores offer jewelry, shoes, scarves, gloves, or other related accessory items. By maintaining the same exclusive feel for these items, customers will look to your shop first, when considering such a purchase.
What will you name your business?
Choosing the right name is very important. 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 purse store is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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.
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 purse business. Learn more about licensing requirements in your state by visiting SBA’s refe
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.
For 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.
Certificate of Occupancy
A purse business can be 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 purse business.
- 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 purse business 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 purse store
Social media and the internet are a small business’ best friends. Blogs, fashion forums, and photographs of your merchandise can all be part of a daily routine of promoting your business. And most social media output is free.
You will also be able to personally interact with your customer base, which often is instrumental in growing your base, even if they aren’t regular foot traffic for the store. Signage can also be critical, if you are in a secluded location or share space with other businesses.
For a small store, it may be wise to invest in a marketing and PR firm, who will manage an online presence for you, as well as work to promote your business through multiple channels. Fashion is as much about who you know as it is what you know. Public relations is designed to make these connections. As you make a name for yourself, consider buying spaces on fashion websites or periodicals, both online and in print.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
For a store such as this, your customers will be searching for exclusive and one of a kind styles. Knowing what your competitors offer can help you avoid over saturation and you can carve out your own niche in the industry. Open up a dialogue with your customers, too. Be personable, ask them what they want, and tailor to your clientele.
Strong customer service is always a positive. Many shoppers appreciate the familiarity and individual attention they receive from a favorite store. At the same time, be diligent about studying emerging fashion trends and purse styles. Exclusive shops understand that they are must be thought leaders for their industry. You must also be a confident guide for repeat customers. A trusted opinion is a powerful tool, when influencing customer decisions.
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 Purse Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
For those with an eye for style, experience in retail purse and handbag sales, or potential purse designers and manufacturers, a purse business can be an excellent fit. It is helpful to be aware of current fashion trends and passionate about handbags and purses, particularly as functional fashion accessories.
What happens during a typical day at a purse store?
As this is a retail business, interaction with customers will be a top priority. Changing displays and restocking items will also factor into day-to-day activities. Additionally, contacting vendors and ordering more merchandise will be a regular occurrence. If your shop specializes in antique/vintage purse sales or consignment, assessing the value and condition of these items will be necessary.
In addition, you will:
- Clean and organize the store nightly
- Oversee and implement new marketing/advertising
- Compare pricing and merchandise of competitors
- Online blogging and social media updates
- Interact with customers, both in-store and online
What are some skills and experiences that will help you build a successful purse store?
Owners of businesses which revolve around fashion and design will do well to be deeply involved within these same industries. A high-end purse retailer should be familiar with the designers and companies which are popular or on the rise. If you are selling vintage or antique purses, study the history and rare qualities associated with the sought after items. Visit websites, such as Antique Purse Collector’s Society to garner more information and become involved in this community of collectors and sellers. Be a student of your trade and continue to conduct research regularly.
In addition, experience in the following areas will be helpful:
- Retail or commission sales
- Marketing and advertising
- Computers and Internet blogging
- Communications or public relations experience
- An overall love for fashion and design
What is the growth potential for a purse store?
Specialty shops, such as purse stores, can be very lucrative businesses, if location and clientele are researched properly. Understanding the buying potential of your customers is key to success. Purses and handbags tend to be items which aren’t as quick to need replacement as shoes or clothing. Therefore, the store must attract return customers as well as casual retail shoppers. A location which will experience a larger amount of foot traffic will most likely help your store see more frequent sales and a need for expansion.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
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 purse store?
Small business retailers offer the following advice:
- Do not wait to launch your company until everything is perfect. Your business will be ever-evolving. Nothing will ever be perfect.
- Be open to new ideas, techniques, and strategies.
- Research the competition prior to opening your business. Research their: keywords, customers, who their sales reps are, their website, sales funnels, and distribution. This information will prove invaluable for the growth of your own organization.
- Location is critical to your shop’s success. Before you begin looking, conduct your own research to identify the neighborhoods that would best support your shop. Those spaces tend to get rented quickly, so be diligent in your hunt.
- In retail, it’s particularly critical that you define your budget and stick to it.
How and when to build a team
Depending on the size of your store, you’ll probably need at least one or two employees to help shoulder the burden of starting the business. Leave yourself enough open space on the calendar, day to day, so you will be able to take care of the surprises which pop up. Then, once the store is established, consider bringing on additional employees as sales rise or maintain a positive trend.