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 sock shop. 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 sock shop?
A sock shop will need the following in order to function:
- Retail space
- Infrastructure (e.g., display racks, etc.)
- Commercial insurance
What are the ongoing expenses for a sock shop?
Ongoing expenses include the cost of inventory, employee salaries and benefits, rent/mortgage, and the cost of maintaining your website. Another ongoing expense will be business insurance, and owners are strongly encouraged to purchase a good plan. While a sock shop isn't typically considered a hazardous place, you may have people trying on inventory in the store. If they slip at any point, they may hold you responsible for their injuries.
Who is the target market?
The target market can be anyone who wants a pair of socks. Realistically, if you’re selling novelty socks, the market is more likely to be young women in their teens and 20s. However, the demographic can be as wide as you make. For example, you can sell matching socks for parents and children, or men's dress socks in new designs.
How does a sock shop make money?
Owners will set a profit margin on all socks sold. They may choose to make small margins off large orders or sell smaller quantities of novelty socks at a higher margin.
How much can you charge customers?
Luxury knitwear socks can sell for well more than $1,000 per sock. However, you likely won't get very far if you price your socks that high. Novelty socks can sell for about $15 a pair and regular bulk socks can sell for about $2 per pair. Research sock prices in your area before setting your own retail price list.
How much profit can a sock shop make?
Average profit for a sock shop can be as high as $10 a pair. If you sell 50 pairs a day at a profit average of $5, you would make $250 per day.
How can you make your business more profitable?
Consider selling additional accessories, such as ankle bracelets or simple pairs of shoes. These items can help customers complete their look before they walk out of the store.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your sock shop 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.
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 sock shop
Sock shop owners may want to begin selling both online and in a retail store. This can help people in all locations get to know more about the brand. Consider throwing a grand opening party to drive excitement. Have guests wear their favorite socks and give out prizes for the best ones.
When it comes to marketing, you’ll need a strong online presence to help people find you and learn more about what you have to offer. Create social media campaigns that get people talking about the kinds of socks they love, and use that feedback to drive what you advertise to certain groups. Paint the store in bright colors so people want to check out your inventory. Finally, consider partnering with shoe stores for cross-promotional events.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Attracting customers can be as easy as having a sale on the day you open or inviting local fashion influencers to attend the opening party. Retaining customers starts with selling a quality sock that can stand up to a variety of activities (and multiple washings). People should feel comfortable browsing your store. Employees should feel comfortable selling the products without making anyone feel pressured to purchase. Consider offering a loyalty program for customers, so they’ll want to earn rewards.
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 Sock Shop In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
People who love unconventional fashion. Socks are normally seen as a practical garment to wear, but they can be fashionable when they’re dressed up in the right colors and materials.
What happens during a typical day at a sock shop?
Owners may perform the following tasks on a regular day:
- Helping customers
- Stocking inventory
- Researching new designs
- Setting prices
- Managing website
- Scheduling employees
- Creating new marketing campaigns
- Fulfilling large orders
What are some skills and experiences that will help you build a successful sock shop?
You should have some experience in fashion. Owners will need to know the styles and sizes (e.g., knee socks, no-shows, etc.) that will best appeal to your audience. You'll also need excellent people skills, as you’ll need to handle both customers and employees.
What is the growth potential for a sock shop?
Many people will purchase their socks at big box stores or online, so the growth potential may not be readily apparent for your business. However, the more intriguing your designs are, the more likely it is your sock shop will thrive. Many people buy cheap socks only to find that they need to throw them away because they fall apart after only a few wears. If you can give people quality socks that last, you'll be more likely to make a name for yourself.
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 sock shop?
A sock shop is a really fun idea for many owners, but the reality isn’t always as glamorous. Most people already have their own preferred way of buying socks, and it’s often done for practicality reasons rather than for fashion. You’ll first need to recognize the inherent challenges of standing out in a crowded market before searching for ways to enter the industry.
Successful sock entrepreneurs carve out a niche by looking at what’s missing in their industry as opposed to what’s popular. Most people need to wear socks when they're at work or due to the weather, so you'll always have customers who need your services. If you hear complaints from people that low socks tend to slip off their feet, you may want to sell a premium brand that’s guaranteed not to sag. Or you may want to sell more crew socks so customers don't have to worry about their socks bunching up mid-way through the day.
Owners should also think about what people are wearing beyond socks. So if the latest fashion trend in your area is miniskirts, you can start marketing your socks as the perfect accessory to the skirts. Or if you find that combat boots are starting to come back in style, you can start selling matching socks to complete the trend.
When you're first getting started, you'll want to be stingy with your money and overly generous on customer service. Social media can be a good way to get free marketing, especially considering that bright and colorful socks are already an eye-catcher. Everyone who interacts with your business should feel special, even if they just came into your shop because their friend asked them to.
How and when to build a team
You should ideally be hiring at least one employee if you’re planning to offer typical retail hours. Look for people who are friendly and experienced in sales. Ideally, they should also have some insights into the fashion market. This can help you keep your ideas fresh as you change out your inventory for the upcoming season.