How To Open a Shoe Store

One of the first things you’ll do is choose a business name for your shoe store. Consider several things when naming your shoe store.

First, what’s your niche in the shoe store industry? For example:

• Do you offer the best in kids’ shoes, sneakers, or designer brands?
• Are orthopedic shoes available at your store?
• Do you specialize in sports shoes and athletic shoes?
• Do you offer luxury shoe brands or discounted shoes?
• Do you focus on eco-friendly, sustainable styles?

Keep your niche in mind as you create a list of names that could work for your shoe business.

Second, consider whether the name is unique and memorable. From a branding perspective, your business name should stand out. It should also communicate what you offer concisely.

Research competitors and make sure your branding isn’t too similar to theirs. Legal problems can arise if you choose a business name that’s too similar or the same as a name already in use. If your business name is too similar to a name already in use, it could cause customers to get confused about who you are and what you offer.

If your selected name has already been trademarked, the person or business with trademark protection for that name could file a lawsuit against you. So, it’s essential to take the following steps as part of your business name search:

• Search business records for your state (most states’ secretary of state websites have a searchable database)
• Search the fictitious business name database (this is also likely on your state’s secretary of state website)
• Search the federal trademark database on the U.S. Patent and Trademark Office (USPTO) website

You could conduct business under a name other than your legal business name. Business owners use DBA (“doing business as”) names for different reasons. If doing business under a different name interests you, you’ll need to look into the process for registering a DBA name in your state.

You should also confirm that the web domain name and social media handles are available for your selected name.

A crucial first step is drafting a business plan. Your business plan is a valuable tool to map out your business’s vision and goals.

You’ll also need a well-written business plan. Investors or lenders need to see your plan before they determine financing amounts.

Some of the details in your business plan depend on other factors. These factors could be scope and size. Still, most plans include the following information:

• Business name, owners, and location
• Market analysis and market research
• Marketing strategy
• Operations plan
• Startup costs
• Structure and management
• Business goals
• Retail pricing strategy
• Your target audience (include demographics, spending habits, and preferences)

The U.S. Small Business Administration (SBA) offers free business plan templates for guidance.

Estimating the costs of opening your shoe business is complex. Startup costs vary depending on the type of shoe store you’re opening and other factors, including:

• Whether you’re leasing versus buying a space
• The type of shoes and products you sell
• Your business entity
• The availability of wholesale distributors

Your initial inventory will likely be your largest startup cost. Due to the large expense, many startup shoe businesses work to get a wholesale distributor. Getting shoes at wholesale prices can save money on inventory. Many shoe store owners also choose to offer items like shoe care products and socks.

In addition to inventory, you need to consider the costs of:

• Commercial rent or mortgage for a retail location
• Utilities
• Payroll and staffing
• Decor and furnishings
• Point-of-sale (POS) software (systems like Shopify and Square may be more convenient and cost-effective)
• Insurance premiums
• Marketing and promotion
• Office supplies and equipment
• Professional fees for lawyers, artists, graphic designers, and accountants

Make estimates of both startup costs and ongoing costs. Have at least three months of operating expenses saved up before opening your store.

You’ll likely need to take out a small business loan to finance your store. Other sources of financing you can pursue include:

• A 7(a) loan from the SBA (if eligible)
• Investors
• Credit cards (thoroughly research and review card terms and interest rates)
• Borrowing money from family and friends

Unless you plan to run an online-only shoe company, you must find a prime physical location with steady foot traffic. A plaza or strip mall could be a great choice. Your location should attract customers who are shopping for other items when they spot your shop.

Think about the demographics of your target market—is your location convenient and accessible to them? Considerations like proximity and easy parking may determine whether your customers decide to visit your store.

Also, consider your competition and avoid setting up shop too close to a competitor. You must also have enough square feet to store inventory and furniture.

Your commercial rent or real estate will be a significant portion of your operating expenses if you’re opening a physical location. Consider this when determining your budget for commercial space so you don’t waste time looking at spaces you can’t afford.

Lastly, check the zoning regulations for your location. It must have commercial use zoning for you to operate. Having a business attorney review your business lease is also beneficial. They can help you understand the terms and identify any potential issues.

You may operate your shoe store online, with a physical retail store, or both. The decision to start a brick-and-mortar, hybrid, or online shoe store depends on your business model, resources, and goals.

Also, consider your market’s demands. If your physical area can’t support a brick-and-mortar store, e-commerce will allow you to reach more customers.

Opening an online-only shoe store is less expensive. You’ll save some on commercial rent, fixtures, furnishings, and other overhead costs. But you’ll still need space to store inventory and for shipping and receiving. You may still need staff, but not as much.

Running your business on a hybrid model allows you to capitalize on both foot traffic and online traffic. This can potentially increase overall sales. Having an online component can also streamline some aspects of your operations, like inventory management. A multichannel option may also give you an edge over some of your competitors.

Before launching an online business, review the laws regarding internet sales and e-commerce. For example, you’ll need to protect your customers’ data and ensure your website meets all legal requirements.

The type of legal structure you choose for your business is important for liability and taxation. A business attorney can advise you on the best structure for your business.

Limited Liability Companies (LLC) and Corporations

The law treats your shoe business as separate from you if you structure it as either a limited liability company (LLC) or a corporation.

Both LLCs and corporations offer personal liability protection. Your personal assets are protected if a party sues your business or if your business incurs debt.

Forming as an LLC offers more flexibility than a corporation. LLCs are also pass-through entities, meaning the IRS doesn’t require a separate corporation tax.

Conversely, corporations pay income tax on their profits, and their shareholders also pay taxes on dividends they receive from those profits. You can avoid corporate double taxation by applying as an S-corp with the IRS.

To structure your store as either an LLC or corporation, you’ll file paperwork with the secretary of state (or equivalent agency) and pay a filing fee. There are additional requirements to form these entities and comply with state laws (especially corporations).

Sole Proprietorships and Partnerships

If you don’t choose a different structure, the state will classify your business as a sole proprietorship or partnership by default. The default designation depends on the number of members at formation.

As a sole proprietor, your name is your legal business name. As discussed earlier, you can avoid doing business under your personal name by filing a DBA name. But as a sole proprietor, you don’t have personal asset protection.

Conducting business as a sole proprietor is less expensive and requires less business registration paperwork. Still, consider the risk to your personal assets.

A general partnership allows two or more individuals to share in the profits and losses of a business.

Sole proprietors and partnerships report business income and losses on their individual tax returns. They don’t have to file a separate tax return for the business.

A limited liability partnership (LLP) combines the benefits of an LLC and a partnership. LLPs have the tax advantages of a general partnership. But they offer some personal liability protection to the owners, similar to an LLC.

Next, get a federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is like a Social Security number for your business. The IRS uses these for tax and identification purposes.

The IRS issues EINs at no cost to businesses that require them. Apply for yours on the IRS website. Watch out for third-party websites that charge a fee for an EIN—many of them look similar to the official IRS site.

You will need your EIN before you can:

• Open a business bank account
• Hire employees
• Pay tax

Your shoe business needs the right licenses and permits to operate. Failure to secure proper licensing and permits can result in steep fines and penalties. In some cases, the government can even shut down your business.

Local and state governments issue most licenses and permits. Contact your area’s chamber of commerce to see what your business needs. Plan on securing the following:

• Certificate of occupancy (CO)
• Sales tax permit
• Zoning permit
• Sign permit

Securing adequate business insurance is key to protecting your store and giving you peace of mind as a business owner. At a minimum, you will need:

• General liability insurance to cover theft, property damage, personal injury claims, and other unexpected events
• Workers’ compensation insurance to cover medical costs and lost wages if an employee suffers an injury on the job

For example, if a customer slips and falls in your store, insurance will protect your business in a personal injury claim.

You may want other policies in addition to those above. Consider your business’s risks and liabilities when choosing insurance. A business attorney or insurance broker can also help you find policies that match your business needs.

You will likely need to hire staff for your shoe store. Recruit candidates with experience in the retail industry and customer service backgrounds. Your staff should be committed to providing a service-oriented shopping experience. Customers often need help with sizing and product recommendations, and you want staff who are comfortable doing this.

Start by writing effective job descriptions. Retail stores often require night and weekend availability, so be sure to state this in your job descriptions. This will save you time in the interview and offer phase of your hiring process.

Post open jobs on online platforms like ZipRecruiter and Indeed. Many employers also use LinkedIn to source talent.

Review applicable employment and hiring laws. For example, certain questions are illegal to ask in an interview. You also must verify each employee’s identity and eligibility to work in the U.S.

Consider running background checks on your employees. This is especially true for employees who perform cash handling or have access to customer information.

Keep your target market in mind as you make decisions about your marketing strategy. What’s the best way to reach your potential customers? Ensuring people know about your business and the products you offer is vital to building a customer base.

Consider both digital and traditional marketing channels. You may need to adjust your marketing plan as you go to see what resonates with your audience.

Some marketing and advertising methods to try include:

• An e-commerce website
• A strong social media presence (post engaging, entertaining content—not just promotional posts)
• Partnerships with Instagram and TikTok influencers
• Search engine optimization (SEO)
• Listing your business on Google Maps and in business directories
• Email marketing
• Pay-per-click advertising
• Local publicity coverage
• Print advertisements and direct mail
• Radio ads
• Grassroots efforts (getting involved with your community)
• Referral programs to encourage word-of-mouth

You can also offer a loyalty program. Reward your customers with discounts or other perks as they make purchases. Most loyalty programs are completely digital and most often linked to a customer’s phone number or email.

A grand opening party is another way to connect with new customers and introduce your store to the community. This is an effective way to drum up excitement about your business and attract new customers.

Some business owners hire a marketing expert or a graphic designer to help with these efforts. You’ll likely need to hire someone to build your website. Be sure to budget these expenses into your operating costs.