Start a shoe line 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 shoe line. 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 shoe line?
The more you spend on quality materials and manufacturing, the more money you'll pay to start your business. Costs are different for each designer, especially if you choose to open in a highly competitive area where even the cost of materials can run high. Those in the industry say to give yourself at least $200,000, though this isn’t a hard-and-fast rule. One designer started with $35,000 for all expenses (including travel), and planned to make it back within 9 months.
What are the ongoing expenses for a shoe line?
Shoe line owners may have the following ongoing expenses:
- Materials for shoes
- Production/manufacturing charges
- Retail space
- Marketing/website costs
- Employee salaries
Who is the target market?
The target market for most designers are those who have plenty of disposable income. Those who shop for inexpensive shoes are likely to go to major retail stores. However, the demographic of those who want trendy shoes is vast, and everyone needs to wear shoes regardless of how much money they make. Designers may want to develop a secondary line using inexpensive materials that may be purchased at a store like Target or Wal-Mart.
How does a shoe line make money?
Shoe lines have a profit margin on each pair sold. The amount a customer pays needs to cover not just the cost of materials and marketing. They'll also pay a premium for the designer’s time and efforts. Each designer will set their own profit margin based on the cost of production and the demand of their designs.
How much can you charge customers?
Top designer shoes can sell from between $300 and $600. Mid-range shoes may sell from anywhere between $75 to $200. A shoe store like Payless may charge anywhere from $20 to $50 per pair.
How much profit can a shoe line make?
The average profits for a shoe line is about 40%, so the profit margins are extremely enticing to newcomers. Should you sell 200 pairs at $400, you would make approximately $40,000 in profit a year.
How can you make your business more profitable?
Consider selling additional accessories, such as scarves or handbags. Once you understand the finer points of production, it's easier to add to your line of fashion items. You’ll already have the relationship and contacts necessary to take your business to the next level.
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 shoe line 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: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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.
Federal Business Licensing Requirements
If creating your own clothing, make sure to comply with the Federal Trade Commission’s regulations for labelling clothing products.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to own and operate a shoe line. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
Trademark & Copyright Protection
If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.
The nature of legal requirements in distance education is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements.
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.
Learn more about General Liability Insurance.
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.
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 shoe line
Promoting your shoes can be done either online or through more conventional methods like print ads in newspapers. If you're designing expensive shoes for younger people, you should likely try to connect with your audience primarily through social media. Structure your brand to cater to your demographic. So if you’re trying to market to the middle-class, don’t show your models wearing expensive designer clothes with the shoes. Word-of-mouth can also be a major component of your strategy as fashionistas are always looking for the next big thing.
How to keep customers coming back
Your customers may have a variety of expectations from your shoes, so you'll need to identify their needs before going any further. Most people want comfort coupled with style, but this will mean different things to different people. No matter what, ensure that your customer service is kind and dependable, and that your shoes last for longer than just a few wearings.
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 Shoe Line 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?
Ideally, the person who starts a shoe line will be able to match their ideas to the current public taste. They’ll also have an inherent love of shoes, as well as a sense of how to create footwear to fit a variety of types of feet/body types.
What happens during a typical day at a shoe line?
A shoe line owner’s day may consist of the following tasks:
- Designing shoes
- Marketing the line
- Networking with distributors
- Scouting manufacturers
- Additional design education
What are some skills and experiences that will help you build a successful shoe line?
Successful designers may come from all walks of life, but they normally have at least some experience in the fashion world. Some people start in retail, asking questions about each line and formulating their own plan on how to eventually become a designer. Experienced designers in the industry will say that much of creating a shoe line is about understanding the production process.
There's a lot to know about the steps necessary to turn an idea that may have started as nothing more than a sketch on a napkin into something that can be sold in stores. However, that doesn’t mean that you need a background exclusively in shoes to be successful. Shoe designers may have experience in other types of design as well (e.g., clothing, product handbags, etc.)
What is the growth potential for a shoe line?
The US market alone spends just under $30 billion on footwear every year, so the growth potential is there. Experts say that this number is only more likely to increase as shoes are an important way for people to express their sense of style.
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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 shoe line?
Most people find it easier to get started in a city that already puts a big emphasis on shoes. Even though the competition will be higher, there will also be more people to learn and grow from. Living in NYC, for example, will put you near not just fellow designers, but also innumerable production methods and fashion classes on how to design shoes.
Normally, designers already have an idea in mind of who they want to design for, but it’s worth noting the largest markets before getting started. The single most definable one is that of men’s athletics shoes. They account for 20% of all sales. Women’s casual follows at 17%, while women’s dress shoes are at 13%.
Study the human foot, and how different types of feet react to pressure. Once you have a handle on the form and function, work on getting a patent to protect your ideas. While knock-off shoes are common, this can give you legal recourse if you decide to pursue action against a particular entity.
Finally, be careful about where you choose to produce your shoes. Shoe designers usually use manufacturers located in China, which used to provide an inexpensive way of getting the shoes to market. However, China has become a lot more competitive in recent years, with price rising and labor falling. It may still be a viable option, but you may also want to search outside of China for more opportunities.
How and when to build a team
A shoe line owner will likely want to start on their own or with the help of one or two mentors. Once sales are strong, consider adding associate designers to broaden your line and attract more customers.