A shoe store is a retail outlet that retails different types and sizes of shoes and related footwear. Shoe stores primarily purchase shoes and related footwear from wholesalers and retail them directly to the end-user/customers.
The footwear market size was valued at $365.5 billion in 2020 and is estimated to reach $530.3 billion by 2027 with a CAGR of 5.5 percent. The United States has the largest footwear market in the world, amounting to over 91 billion U.S. dollars in revenue in 2019.
Steps on How to Start a Shoe Store Business
Table of Content
Conduct Market Research
The first step in the market research process for your shoe store business is to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source information that will help you maximize your business, give you a reliable clue of what your potential market will be looking out for from a shoe store, and also help you operate your shoe store with less stress and of course, build the business to profitability within the shortest time frame.
Statistics has it that people that fall within the age range of 18 – 45 led the chart when it comes to purchasing clothes and other fashion accessories online. Also, a recent research conducted indicated that consumers between the ages of 25 to 34 led the chart in smartphone usage by comparing prices, reading reviews, buying products, and engaging with brands on social media while in physical stores.
So, if you are looking towards starting your own online retail shoe store, you marketing strategy should be geared towards reaching out those who fall between 18 and 45 years; they are your major market.
a. Who is the Target Market for Shoe Store Business?
If you are thinking of opening a shoe store business then you should make target demographics all-encompassing. It should include corporate executives, socialites, students, business people, celebrities, sportsmen and women, tourists, and every adult in the neighborhood where your shoe store will be located.
b. Is Shoe Store Business a Profitable Business?
Yes, the shoe store business is profitable. Statistics show that the footwear market tends to grow nearly 1.5 times between 2022 and 2031, reaching nearly a billion in 2031 with a 10-year compound annual growth rate (CAGR) of 4 percent.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to shoe stores and they are;
- Brick and mortar shoe store
- Online shoe store.
d. Who are the Major Competitors?
- DSW Inc., formerly Designer Shoe Warehouse
- Finish Line, Inc.
- Foot Locker
- Payless ShoeSource
- Shoe Carnival
- Shoe Pavilion
- Famous Footwear
- Reyers Shoe Store
- Off Broadway Shoe Warehouse
- Plaza Shoe Store Inc.
- On NYC Flagship Store
- Urban Necessities
- The Shoe Market
- 39 Castles Sneakers & Style
- Sportie LA
e. Are There County or State Regulations or Zoning Laws for Shoe Store Business?
Yes, there are county or state regulations and zoning laws for shoe stores, and players in this industry are expected to work with the existing regulations governing such business in the county or state where their business is domiciled.
f. Is There a Franchise for Shoe Store Business?
Yes, there are franchise opportunities for the shoe store business. Here are some of them;
- Good Feet Worldwide, LLC
- Foot Solutions
- Stylo Shoes
- Bata Franchise
- Flip Flop Shops
- Foot Efx, LLC
- New Feet Store
- Panada Shoes
- Shoebox New York.
g. What Do You Need to Start a Shoe Store Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Shop facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Supplies of shoes and related products
- Startup Capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a shoe store business are;
Creative Shoe Store Business Name ideas
- Boyd Llyod© Shoe Store, Inc.
- All Foot® Shoe Store, LLC
- Brown Box© Shoe Store, Inc.
- Happy Foot® Shoe Store, Inc.
- Lawrance Parker™ Shoe Store, Inc.
- Austing Piston™ Shoe Store, LLC.
- Moses Jonah© Shoe Store, LLC
- Jonny Moore® Shoe Store, Inc.
- Allen World© Shoe Store, Inc.
- Martins© Shoe Store, Inc.
- Wilberforce Base® Shoe Store, LLC
- Connard Biden® Shoe Store, LLC
- Mike Thadeus™ Shoe Store, LLC
- Big Thomas© Shoe Store, Inc.
- Eddie Jones® Shoe Store, Inc.
- Pappy Sol™ Shoe Store, Inc.
- Jude Boston™ Shoe Store, Inc.
- Elias Gibson© Shoe Store, Inc.
- One Stop® Shoe Store, LLC
- Rainbow Corner™ Shoe Store, Inc.
Register Your Business
a. What Type of Business Structure is Best for Shoe Store Business?
Even though there are several options when it comes to the business structure of a shoe store business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
c. What Type of License is Needed to Open a Shoe Store Business?
- General Business License
- Health and Safety Permit
- Reseller’s Permit
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
d. What Type of Certification is Needed to Open a Shoe Store Business?
You don’t need any certifications to open a shoe store.
e. What Documents are Needed to Open a Shoe Store Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a shoe store business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Shoe store Business?
A standard shoe store can cost anywhere from $5,000 to $150,000 depending on size, the type and brand of shoes you want to retail, and also whether or not the shop will be heated, require electricity, and how you have it plumbed.
b. What are the Costs Involved in Starting a Shoe Store Business
- The total fee for registering a business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services total – $1,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
- The cost for hiring a business consultant (writing of business plans inclusive) – $2,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
- The cost of accounting software, CRM software, and Payroll Software – $1,500
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of – $35,600.
- The cost for shop / facility remodeling – $15,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits will cost – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
- The cost for start-up inventory (a wide range of shoes and related footwear from different brands) – $35,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound systems, tables and chairs et al) – $8,000.
- The cost of launching an official website – $600
- The cost for our grand opening party – $3,000
- Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Shoe Store Business?
- The size of shoe store business
- The choice of location
- The required licenses and permits
- The type of facility
- The cost for branding, promotion, and marketing of the shoe store
- The cost of furnishing and equipping the facility
- The cost of the insurance policy covers
- The cost of registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost of the grand opening of the shoe store
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your shoe store, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Shoe Store Business?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Shop Manager (Owner) – $45,000 Per Year
- Merchandise Manager – $32,000
- Cashier (Accountant) – $29,630,000 Per Year
- Sales Boys and Sales Girls – $26,100 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Shoe Store Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
But if you choose to start the business on a large scale by shipping shoes to customers all across the United States of America and other countries of the world, then you would need to source for fund to finance the business because it is expensive to start a standard large scale online shoe store business.
Write a Business Plan
a. Executive Summary
Boyd Lloyd© Shoe Store, Inc. is a neighborhood shoe store that will be located in a fast-growing community in Montclair, New Jersey. We have been able to secure a two-year lease of a vacant shop within the city’s largest shopping mall. We are fortunate to secure a facility with an option of renewal for 5 years at a rate that is favorable to us.
b. Products and Service
- Children shoes
- Female shoes
- Male shoes
- Handmade shoes
- Sports shoes and Athletics shoes.
c. Mission Statement
Our mission is to establish a shoe store business that will make available a wide range of shoes at affordable prices to the residents of Montclair, New Jersey, and other cities in the United States where we intend to open chains of shoe stores.
Our vision is to become the leading shoe store in the industry in the whole of Montclair, New Jersey, and also to be amongst the top 10 shoe store brands in the United States of America.
d. Goals and Objectives
The goals and objectives of a shoe store are to provide a retail outlet where people can purchase different types and sizes of shoes.
e. Organizational Structure
- Shop Manager (Owner)
- Merchandise Manager
- Cashier (Accountant)
- Sales Boys and Sales Girls
- Security Guard
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch an online shoe store business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for the online shoe and boutique stores industry.
Since your target market is within the online community, then your major marketing strategies should be specifically targeted at the online community.
Part of what you need to do to attract customers to your online shoe store is to leverage on social media; social media has proven over and over again to be the cheapest and perhaps the most effective ways to market a business. You can also leverage on your website and other high traffic websites to advertise your online shoe store.
a. SWOT Analysis
- Ideal location for a shoe store
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Excellent customer testimonials.
- A high volume of unique designs and styles of shoes and related footwear from different manufacturers and brands.
- Financial Constraints
- A new business that will be competing with well-established shoe stores.
- Inability to retain our highly experienced and qualified employees longer than we want
- The arrival of families at our shoe store location
- Online market, new services, new technology, and of course the opening of new markets.
- The arrival of a new shoe store within our market space
- Unfavorable government policy and regulations.
- Economic uncertainty
- Liability problems.
b. How Do Shoe Stores Make Money?
Shoe stores make money from retailing;
- Children shoes
- Female shoes
- Male shoes
- Handmade shoes
- Sports shoes and Athletics shoes.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Introduce your shoe store by sending introductory letters alongside your brochure to households, offices, and other key stakeholders throughout the city where your shoe store is located.
- Advertise on the internet on blogs and forums and also on social media like Pinterest, Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your products.
- Join local shoe store business associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
There is no uniform price when it comes to the products retailed by shoe stores. This is so because the brand (designer), type, and size of the shoe will determine the price of the item. For example, the average MSRP price of Nike shoes is $110.15 while the average available lowest price is $66.75. The average selling price for athletic footwear was around 58 U.S. dollars.
b. How Much Profit Do Shoe Store Owners Make a Year?
It depends, but available data shows that an average shoe store makes about $851,076 in sales, yielding a profit of about $127,363 for the owner. Shoe stores offer a big return on investment, sitting at about 46.1 percent. Please note that as a shoe store owner, you will need to manage your stock and pricing if you want to maximize profits.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the shoe store business
- The types of products retailed in the shop
- The location the shoe store is covering
- The management style of the shoe store
- The business approach of the shoe store
- The advertising and marketing strategies adopted by the shoe store
- The number of years the shoe store is in business
d. What is the Profit Margin of a Shoe Store Business?
The profit margin of a shoe store business is not fixed. It could range from 35 percent to 65 percent depending on the type and brand of shoes being sold. One key factor that will help you sell your shoes at rock bottom prices is to purchase your items directly from the manufacturers in pretty large quantities. The truth is that the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your shoes at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
e. What is the Sales Forecast?
Below is the sales forecast for a shoe store business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $320,000
- Second Fiscal Year: $600,000
- Third Fiscal Year: $1 million
Set Up your Shop
a. How Do You Choose a Perfect Location for Shoe Store Business?
- The demography of the location
- The demand for shoes and other footwear in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of shoe stores, and other outlets that retail shoes and other footwear in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
Of course, if you are able to secure a central location for your warehouse facility, it will give you easy access to good road network when it comes to delivering customers’ orders. It is important to note that a business facility in a good location does not come cheap hence you should allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has full grasp of the city and perhaps country you intend starting your online shoe store.
b. What State and City are Best to Open a Shoe Store Business?
- Pittsburgh, Pennsylvania
- Boston, Massachusetts
- Montclair, New Jersey
- Brooklyn, New York
- Chicago, Illinois
- Durham, North Carolina
- Los Angeles, California
- Green Bay, Wisconsin
- Dallas, Texas
- Manhattan, New York
c. What Equipment is Needed to Operate a Shoe Store Business?
You need hangers, holders, showcases, shelves, racks, and receipt issuing machines, sound systems (For playing music), Point Of Sale Machines (POS Machines), CCTV Cameras, and Flat Screen TVs. You will also need computers/laptops, internet facility, a telephone, and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
When it comes to hiring employees for a standard shoe store business, you should make plans to hire a competent shop manager (owner), merchandize manager, cashier (accountant), salespersons, and security guard. These are some of the key employees that you can work with. On the average, you will need a minimum of 3 to 6 key staff members to run a small – scale but standard online shoe store business.
Launch the Business Proper
In recent times, no shoe store business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the shoe store business, you will officially inform people in your city that your shoe store business is open for business.
a. What Makes a Shoe Store Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure your shop is well stocked with different types, sizes, and brands of shoes and other footwear
- Throw a party before officially opening the shoe store
- Be deliberate with your marketing sales approach
- Encourage the use of word-of-mouth marketing to promote your shoe store
- Leverage all available online and offline platforms to promote your shoe store
b. What Happens During a Typical Day at a Shoe Store Business?
- The shop is open for the day’s work
- Goods are properly arranged
- Walk-in customers are attended to
- Deliveries of orders are made
- Stocks are taken and reports are written
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Shoe Store Business?
- Customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a retail shop environment
- Experience in managing people
- Experience in business administration
- Experience in handling shoe merchandising and retailing.