Swimwear/Clothing Boutique..HELP

[bluemermaid]

Hi all! I'm in the very early stages of business planning for my coastal boutique. I'll be selling swimwear, clothing and accessories. I have a meeting scheduled with a CPA to help me with my financial projections but I want to go to the meeting with some initial numbers. I'm working on my start-up cost projection but I'm having trouble guestimating inventory. What's the easiest way to estimate how much inventory I will need at start-up? I'm assuming my location will be about 1,000 sq ft.

[Paul]

Hi all! I'm in the very early stages of business planning for my coastal boutique. I'll be selling swimwear, clothing and accessories. I have a meeting scheduled with a CPA to help me with my financial projections but I want to go to the meeting with some initial numbers. I'm working on my start-up cost projection but I'm having trouble guestimating inventory. What's the easiest way to estimate how much inventory I will need at start-up? I'm assuming my location will be about 1,000 sq ft.

You will need to learn some of the basic business model information for your type of business. You can find online what the average sales per square foot are in the swimwear category, what the usual margin/markup is and the typical annual turn of inventory, then you can determine what you will likely need in starting inventory. IE: if average annual sales per sq ft is $ 300 then you can anticipate your sales could be $ 300,000. If the average turn is 3 times then you would need $ 300,000 divided by 3 ($ 100,000 at retail) as inventory. If the margin is 50% (cost is half of retail) then you will need $ 50,000 in inventory at cost.

THESE NUMBERS ARE MADE UP and are just for demonstration. This is a pretty simplistic formula but its a start.
There are many other factors including seasonal markdowns, seasonal fluctuations in sales, further breakdown of categories such as accessories clothing etc.High end vs. low end pricing is also a major factor. High end usually turns slower than low end.