Sample Business Plan Boutique/Clothing Store in Nigeria

In this sample business plan, we are going to be looking at the business opportunity, startup costs and return on investments for a boutique/clothing store business which can be setup and run profitably within a busy metropolitan district in Lagos, Abuja, Port Harcourt or any major city with a large middle class population. The financial projections for this plan reveals that it could cost at least 4.5 million to setup a standard boutique with 56% projected first year ROI and payback period of 2 years.

What is a boutique?

A clothing store or boutique as we know it in Nigeria is a shop that stocks mostly clothing items and clothing accessories such as; shirts, skirts, trousers, suits, hand bags, shoes, belts, wrist watches and perfumes to name a few. The list of items being stocked will depend on what kind of clothing we are looking at. Is it a men’s only boutique, women’s only boutique, unisex, children’s boutique. Will it be a shoe store? Will the store only stock luxury items or will it be an affordable designer boutique shop? These and more questions should be answered by you if you intend owning a clothing store in Nigeria.

The Business Opportunity for Boutique in Nigeria

Clothing is a necessity for all humans. Everyone needs clothing regardless of status and class. The poor will settle for Okrika or second hand clothes. The lower middle class will often settle for grade AA Okrika while the upper middle class and the rich will want to buy high end fashionable clothes, shoes and bags. The rich especially prefer to buy their clothes abroad (US, UK, EU, Dubai or Canada) or pay local designers to style them. Whereas the upper middle class will mostly patronize high end local boutiques in Nigeria or shop online for them.

The best part is Nigeria has a large population of upper middle class (people earning 250,000 naira and above per month) which is at least 1 to 3 million strong with most of them residing in Lagos, Abuja and Port Harcourt. So that means if you setup your boutique in the right place, you will be noticed by these people and should make good sales. The middle class market usually comprises people employed in the formal sector (workers who go to an office everyday of the week) or self-employed professionals. Another subset of this market is the student segment comprising students in Universities and Polytechnics - children from well-off homes schooling locally.

Some Notable Challenges in the Business

While the business has good potentials for sales it is not all rosy. There are times when the business is faced with challenges that can undermine sales and clean out the profits. Some of these challenges include; cheap imported/smuggled clothes from China and Vietnam. Think of fake designers T-shirts that look very similar to the original one selling for less than 20% of the real price. There is the problem of online stores that can sell very cheaply because of low overhead costs (their main costs is marketing and logistics). Besides the online stores, some offline boutique stores operate at very low costs because they own their building/shop and employ workers they pay minimum wage to. There are still many more factors but I will stop here.

Some Success Factors for Boutique Business in Nigeria

•        Location
•         Quality of stocked items
•         Uniqueness and design
•         Customer service
•         Marketing Plan
•         Sound money management

If you want more and get further details about these factors and how you can implement them in your business, send me an email: paulonwueme@gmail.com

How much is required to Setup a Standard Boutique in Nigeria?

This is an estimated setup cost for a boutique that will stock high end clothes (not thrift or Okrika grade AA). The shop setup cost will factor in other things like decorations, stock of items for sale, generating set and other expenses. A conservative estimate assumes this could add up to 4.5 million naira.

Parameter	Cost
Rent for Shop Space	600,000
Shop Shelves	300,000
Standing Wall Mirror	20,000
AC and Fans	105,000
Lighting and Electronic Gadgets	30,000
Shop Design and Decoration	90,000
Stock of Clothing, Shoes, Belts etc	1,800,000
3 months operating expenses	600,000
Other Expenses	960,000
Total	4,505,000

 

Brief Financial Projections

The financial projection assumes that the business will operate for 300 days in a year with average daily sales of 80,000 naira and gross profit margin of 30%. If the business can operate cost effectively at 25% maximum it should be profitable enough to achieve payback within 2 years and grow organically into setting up other branches. If this business is well run, the owner should be able to setup a boutique chain of shops starting from the 5^th year.

Parameter	Projection
Gross sales	24,000,000
Cost of sales	14,400,000
Overhead costs	6,000,000
Operating Income	3,600,000
Taxation	1,080,000
Profit after tax	2,520,000
ROI	56%
Payback	2 years

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Paul Onwueme is a professional Business Plan writer since February 2014, has achieved respectable results with his business plan writing service with several of his clients securing funding and leaving positive feedback about his writing service. You can connect with him via phone: 0803 206 4106 or email: paulonwueme@gmail.com