Expenses

• Before you start your business, you will need to have spent a significant amount of cash. Make a detailed list of all your start-up expenses, as well as your ongoing expenses, and put together a careful business plan. Have your plan reviewed by a clothing industry veteran to make sure you have not forgotten or underestimated any expenses. Then plan on being able to last for at least 6 months before you make a sale.
  
  Plan on spending at least $200 on incorporating your business, up to $1,000 in legal fees and possibly several thousand dollars for business and office equipment such as laptop computers, printers, fax machines, etc.
  
  Rent is an often high expense that must be paid whether your store is selling inventory or not. Some landlords may require the entire first year's rent in advance, which can vary from $8 per square foot for a 600-square-foot storefront in a small rural town to $200 per square foot for a 2,000-square-foot loft in midtown Manhattan. Average store size is 1,200 to 1,500 square feet. Note that rental prices may be quoted either by their base price, which includes nothing but the rent itself, or in triple net (NNN), which includes utilities, services and other fees--but does not include interior decor. Try to keep the entire rent under 6 percent of your projected sales revenue.
  
  The cost of your inventory will also be extremely variable and depend on whether you're making the clothes yourself, where you're importing them from, how many items you will carry, and the cost of each piece. If you selected clothing yourself from an overseas vendor, you may need to pay for travel expenses during your purchasing trips. In all cases, aim to keep your inventory extremely low, such that you sell all your pieces just as you have ordered more. Expect to spend 55 percent of sales for this category.
  
  Sales, marketing, and ongoing expenses such as phone bills will cost up to 40 percent of sales. If you need to hire one or more part-time sales workers, plan on paying at least your state's minimum wage plus approximately $2 per hour in legally required benefits. Marketing can be done inexpensively if you have a large network of contacts and a good handle on social networking technologies, but otherwise you should plan on spending substantially on flyers, billboards, directory listings, a website and so on.