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Are Boutiques Pricing Themselves Out Of Business?


Have you seen some of the amazing sales going on right now? 75% off of each item! What a steal, right?


What about the stores converting from brick and mortar storefronts to online only?


There is a lot of movement and motion within the retail industry, especially with clothing boutiques, that may have some wondering if the dawn of boutiques is about to come to an abrupt halt. Are these sales due to overpriced items? Are there too many boutiques and not enough customers? What went wrong? Well, let's chat about it.


Boutiques have been on the rise for a few years now, with an increase happening during the pandemic. The ability to start a business and order inventory has become so easy that even elementary-aged children are now joining the ranks of entrepreneurs and business owners. While becoming a business owner or an entrepreneur is a great accomplishment, these roles require a little more than a title. From being able to read and understand trends to following the numbers, owning a business is no small feat. This holds true for clothing boutiques as well.


The success of clothing boutiques is dependent on several factors. Creating an identity, knowing your customers, and having products are all important. But, what about knowing your numbers? Marketing? Understanding trends? Moving in the right direction? These factors are just as important. Here's why.


1. Knowing your numbers is important to every business. From understanding your profit and loss statement to understanding changes in margin and any anomalies, business owners fare much better when reviewing financials. Knowing your numbers isn't just the financial piece. Numbers are a part of marketing, too!


2. Marketing makes people aware of your business. Have you ever heard the terms reach and impression? These are some of the places where numbers appear in marketing. Reach refers to the total number of people who see your content, while impressions are how many times your content is displayed. Listen, without marketing, your reach may be limited to those who just happen to come across your brand in passing. Marketing is not just a social media post or ad. It includes research and advertising.


3. Understanding trends is how you adapt to the ever changing environment. You've got internal and external trends to review. Internal trends can include year over year company financial comparisons, structure changes, etc. External changes can include new legislation, fashion changes, inflation, and unemployment. It's not limited to the aforementioned.


4. Knowing if you're moving in the right direction can be difficult sometimes. However, ways to measure it can include profitability comparison as far as a budget and forecast, feedback from customers, and other KPIs (key performance indicators).


All of these factors can and should be reviewed by business owners and decision-makers often.


So, back to the question. Are boutiques pricing themselves out of business? Well, we can't answer that without taking all of the mentioned factors into consideration. Analyzing the business can help those business owners and entrepreneurs answer the question.


However, before you start with the analysis. I would recommend working with an experienced accountant and leadership team to help with the analysis. From providing you with the financial numbers and any concerns or wins, the accountant will help you set the stage and foundation for your business analysis. Don't have one? Well, we would love to help you! We've got over 10 years of experience and have several friends with similar industry experience.


Let's get you on the right track.



Jess Jones

Owner

Luxe Accounting & Planning Services


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