How to start up a clothes hire business

Clothing hire businesses supply formal wear, work wear, sports wear and even fancy dress to a range of different customers. Check out our practical guide for starting and running your own clothes hire business.

Research your target market

When you plan your clothes hire business it's important to make an estimate of how much demand there will be. It's also important to find out as much as possible about the competition. Doing some market research will help you with this.

Establishing the level of competition

Having thought about who your customers might be, you need to find out how well they are already served. Count how many outlets are already hiring out clothes in your area. A look on Yell.com (classifications "clothes hire" and "wedding services") and other similar directories will help to establish this.

Remember that as well as other independent clothes hire businesses, your competitors will include national chains such as Moss Bros and Youngs Hire, and department stores such as Debenhams (which works in partnership with Youngs). You will also face competition from clothing retail outlets - with some potential hire customers instead preferring to buy clothes from discount fashion stores and secondhand or charity shops.

Bear in mind that you may also face competition from firms that offer online ordering and use a courier service to deliver and collect the clothes from the customer's home or place of work.

It may be that only some of these will be your direct competitors because you will be targeting a particular segment of the market or hiring very unusual outfits that are hard to find elsewhere.

Look at your competitors' advertisements and websites, and try to visit some of them to find out:

  • what kinds of clothes they hire out and what prices they charge
  • if they offer any other services (measuring, fitting, cleaning, repairs and so on)
  • whether they advertise special features such as out of hours measuring service, delivery and collection service and so on
  • whether they belong to a trade association
  • what sort of impression they give (does the firm come across as small and friendly, large and efficient, good value, traditional, upmarket?)
  • how knowledgeable and helpful their staff are

Consider carefully how your new business would compete with the existing outlets. Use the Record sheet to note down the results of your research.

Research current trends, plus legal and tax issues

Customer profile

Think about how many people are likely to use your business. The number will depend to a large extent on the size of the local population. If you have decided to specialise (for example, in supplying wedding outfits) this will have a bearing on the type of customers you can expect to attract. Demand is also linked to the strength of the economy as a whole and in particular the state of the local economy. In order to try to estimate demand, you need to do some market research.

What types of people live in your area. Are they well off? Young or old? Professionals, working people, students or unemployed? Are there lots of children living locally?

Consider other sorts of customers that might use your services. For example schools, amateur dramatics groups and youth clubs might want to hire costumes if putting on a show. Students in local colleges or universities may need graduation gowns (although this is a very specialised sector of the market). Decide whether you will hire outfits to organisations like this.

Once you have identified who your potential customers are, you can direct your advertising efforts at them.

Where do they live?

Most customers are likely to live nearby - people generally prefer the convenience of a local outlet. Some customers may live further away, however. For example, people looking for wedding outfits may be prepared to travel long distances to find the right style. Graduation gowns might be hired by arrangement with universities and colleges throughout the country (although this is a specialist sector of the market and may be difficult to break into initially). If you offer unusual outfits or a delivery and collection service you may find that you attract customers from a wider area too. You might extend your potential customer base if you stock clothes for children.

Different types of customer

Potential customers fall into various groups, including:

  • wedding parties
  • children and young people
  • adults wishing to hire formal clothing
  • adults wishing to hire fancy dress outfits
  • drama groups and production companies
  • schools, colleges and charity organisations
  • students needing graduation gowns
  • people hiring skiwear, wetsuits or other specialist sports clothing
  • employers wanting to rent workwear garments

These groups clearly require very different types of clothing and so the kind of customer you attract will depend on the range of clothes you decide to offer for hire.

Who should you target?

Satisfying all the different sorts of customer would require sufficient financial resources and space to buy and store a very wide range of clothing. This may not be practical and many businesses decide to focus on a particular sector of the market.

Many concentrate on the wedding hire sector, offering clothes for the bride and groom and also the bridesmaids, pageboys and family members (particularly if a special theme has been chosen). Offering a range of formal wear for adults should be straightforward and you could expand the business by offering children's formal wear too. Wedding and formal clothes are likely to be required in all areas of the country, although the level of demand may be somewhat seasonal. Spring and early summer are popular times for weddings, whilst dinner jackets and ball gowns are most likely to be hired at the end of academic years, and during the Christmas and New Year holiday period.

If plenty of space is available a wider range of clothes can be offered, perhaps including fancy dress and period costumes for special events. This might be most appropriate in areas with a large population of children and young people - for example university towns and cities.

If you live in a coastal holiday area you could offer wetsuit hire (although this market may already be satisfied by watersports shops and beach front outlets). Alternatively, you could try hiring out ski jackets, trousers and gloves and so on - people going on skiing holidays often hire skiwear in the UK and the skis and boots once they arrive at the resort. Bear in mind that demand for sportswear will be very seasonal - wetsuits during summer months and ski clothes during the winter.

Think carefully about whether to specialise in a particular sector, and if so, to what extent. Before deciding, consider your location and the type of people who live there, the resources you have available to buy and store clothes, and your own skills and interests.

Decide which services to offer

You may decide to hire out a wide range of clothes to suit various occasions, or you could concentrate on a particular sector of the market. You could specialise in menswear, womenswear or decide to offer both.

You might hire out some or all of the following:

  • wedding dresses and bridesmaids dresses
  • morning wear (top hat and tails) for male members of a wedding party
  • ball gowns and cocktail dresses - perhaps including high-end designer dresses
  • black tie outfits (formal evening dress consisting of dinner jacket, matching trousers, white dress shirt, bow tie and so on)
  • white tie outfits (black evening tailcoat, black trousers, stiff fronted shirt, bow tie and waistcoat)
  • hats, shoes, ties, gloves and accessories such as handbags to match outfits
  • graduation gowns
  • kilts and traditional regional dress
  • business suits
  • children's formal wear
  • fancy dress outfits
  • military uniform (for re-enactments, parties and so on)
  • period clothing for themed weddings and events
  • maternity wear
  • sports clothing such as skiwear or wetsuits
  • corporate image-wear for the retail and service industries
  • ultra-clean workwear for medical and other high-care sectors
  • protective work clothing
  • general workwear

The weddings and formal hire sector of the market is heavily targeted by large businesses like Moss Bros Hire, Youngs Hire and Debenhams Formal Hire. You can't ignore this market and you are likely to come up against stiff price competition because of it. As a result, some independent hire shops decide to focus on more expensive or unusual outfits or sectors such as designer wear, children's wear or maternity wear.

Bear in mind that your customers may also want to hire shoes, hats, gloves, handbags and so on. If you're in the business of hiring out workwear you could also consider stocking other workplace textiles, such as:

  • bed linen
  • surgical textiles
  • dust control mats
  • re-usable industrial wipes

Cleaning, alterations and repairs

You will need to clean and repair your stock of clothes regularly. You might pay another firm to do this for you, or you could do it yourself. If you decide to undertake your own cleaning and repairs, why not consider offering these services for customers' own clothing? While dry cleaning services are available from many outlets, clothes repairs and alterations are less widely offered. Providing such a service could turn out to be a useful source of extra income.

Additional services

You could offer extra services, such as:

  • a measuring and fitting service at the customer's home (particularly for weddings)
  • a delivery and collection service

Selling ex-hire clothes

It's really important that you keep your stock of hire clothes up to date and looking in as-new condition. To do this, you will need to replace hire clothes at frequent intervals. How frequently will depend on factors such as how often a particular garment is hired out, how hard wearing it is, and changing fashion trends. Fashion trends affect clothes like designer dresses more than standard business suits.

Many clothes hire outlets hold regular sales of ex-hire garments and some larger businesses continually have a selection of ex-hire items for sale.

As you replace hire clothes, you will build up a collection of excess clothing that you can sell to the public. Take a look at rival outlets to get an idea about pricing of ex-hire clothes. You should be able to offer them for a reasonable price. After all, the clothes should have already made money for you, so any extra you make by selling them will be a bonus.

Why will customers choose you

You need to make sure that enough customers will choose your business rather than existing clothes hire outlets. There are a number of things to consider when trying to attract customers.

A gap in the market

Your market research might indicate that there is a gap in the market that your shop can fill. For example, perhaps no one in your area is specialising in fancy dress costumes. Maybe existing wedding specialists cater well for brides and bridesmaids but less well for male members of a wedding party. Alternatively, you may have identified demand for an online service with collection and delivery to the customer.

The right range of clothes

You must be able to supply the kind of clothes that your customers want to hire. This applies whether you decide to specialise or not. It is vital that the clothes you offer are of high quality and that the styles are right. If you have not decided to specialise in a particular sector, concentrate on a range of core items that are commonly hired such as dinner jackets for men and ball gowns for women. Aim to have a sufficient range of styles and sizes in stock to meet demand. (It's a good idea to find out the timing of events that are likely to lead to a spike in demand, such as university balls, so that you can make sure you have enough clothes in stock.)

Beyond this core range, the clothes that you hold in stock will depend on how (if at all) you have decided to specialise and the financial resources and space available to you. Having a reasonably wide range will ensure that you can supply most customers with the items they want, but don't try to stock everything - there's no point having money tied up in expensive outfits that are very rarely hired. Remember that you can, if necessary, hire in special clothes that a customer needs. This might be worthwhile in certain situations - for example a customer organising a wedding might ask you to supply a kilt in addition to the suits that are your usual area of business.

Price and convenience

When hiring an outfit for a special occasion, customers are more likely to be concerned about getting the right clothes than paying the lowest price. Nonetheless, you should try to ensure that your prices are at least broadly competitive with other nearby outlets.

Potential customers will also be influenced by convenience. Location has a lot to do with this and ideally the business will be located on or close to a main road, both for the convenience of customers and to attract passing trade. Adequate car parking will be an advantage. It is not essential that the shop is particularly large so long as you have sufficient space for storing your range of clothes, displaying a few outfits and providing a changing room for customers. Whatever the size of your shop, you should try to make it welcoming and attractive. You may not be able to choose or afford an ideal location, but you can still try to make life easier for your customers, for example, by offering a delivery and collection service.

High quality service

Whether or not you have identified a particular niche in the local market, you can try to appeal to customers by offering a superior level of service. To start with, the clothes that you provide should be of a high quality and must, of course, be spotlessly clean. Make sure that the shop is tidy and well organised and put in place efficient checking and cleaning procedures for returned items. Offering the convenience of online or telephone ordering may win you more customers. This will entail delivering and collecting the chosen clothes. You might undertake this yourself or use an external courier firm, but either way it is essential that delivery is efficient and on time.

One of the independent's great strengths is providing a helpful, personal service. An in-depth knowledge of clothes in general, but especially formal wear, designer dresswear and dress etiquette, will enable you to provide useful advice to potential customers. Make it clear that you are happy to offer advice on appropriate dress, willing to help customers choose their outfit and able to provide a measuring and fitting service to ensure the right size is selected. Always aim to be friendly, polite and helpful - remember that word of mouth recommendation is by far the best form of advertising.

Price your services

When considering your pricing policy, remember that you must at least be able to cover your costs, overheads and drawings.

Hire charges

Clothes are usually hired on a daily, weekly or weekend basis. For longer-term hire (for example, ski-wear hire) you might negotiate a reduced rate with the customer. The amount charged generally increases with the value of the item of clothing. So for example, a standard dinner jacket would cost less to hire than a complete highland outfit or a designer dress. Particularly unusual clothes (for example period costumes or special fancy dress outfits) may also be charged out at a higher rate - they are likely to have cost more to buy in the first place and unlikely to be available elsewhere. For more normal clothes, the exact amount you decide to charge may depend on the going rate, so check to see what your competitors charge. Your customers will not be prepared to pay much over the odds for clothes they can easily hire elsewhere.

Bear in mind that the hire rate charged for each item of clothing must, over time, cover its initial cost, any cleaning and repairs, and delivery/collection costs if such a service is offered. Some clothes will be regularly hired and so constantly earning money. Others may spend more time in storage than in use - you will have to charge a higher rate for such items if they are going to be worthwhile keeping in stock.

Deposits and extra charges

Clothes are generally booked out in advance of the date they are required. When a customer makes a booking, the hire charge is paid and a security deposit taken. (If the booking is cancelled a refund may be given, depending on how close to the booked date the cancellation is made.) The security deposit is refunded when the clothes are returned on time - provided of course that they are returned reasonably clean and undamaged. If clothes are lost, badly soiled or damaged, a charge up to the full retail value may be made. If clothes are returned late, it is normal to make an additional charge for each day overdue. You might decide to offer customers insurance cover against accidental damage - a small daily charge is usually made for this.

It is very important that you make your terms of hire completely clear to customers so as to minimise the risk of any confusion or complaints over additional charges.

Other services

Also consider how you will cost any other services you provide (such as repairs, alterations and dry cleaning of customers own clothes), how often you will review your prices and whether you will offer discounts (for example reduced rates to large wedding groups) or special offers.

Special offers and discounts

You may decide to offer a discount on large orders or to group customers - for example, several members of the same wedding party. You could advertise a special wedding party promotion such as 'free outfit hire for the groom'. How much discount will depend on your pricing policy and perhaps on the level of local competition.

Many businesses give discounts to their employees, regular customers, family and friends. A reduced rate could be offered to groups such as pensioners, charity organisations or drama groups. Check out your competitors for ideas and keep a close eye on any special offers you do make to be sure that they're working for you. After all, these kinds of promotions might encourage extra business, but they will also affect the amount of profit you make.

Promote your business

It's important to send out the right messages about your business to potential customers - and to make sure that as many people as possible get those messages.

The right image

People's first impression of your business is very important - so it is vital to project the right image. Keep your premises clean and tidy and if necessary, consider re-painting to brighten things up. Change window displays regularly to attract attention and make sure that sample outfits are attractively displayed. Ensure that you and any staff are neatly dressed. Use signs to indicate what items are available and to draw attention to new ranges, special offers and any other services you provide. As well as a storage area for clothes, you will need a display area where customers can look at outfits and you can offer them help and advice. You will also need to provide a changing room and mirrors.

If you offer telephone or internet ordering with a delivery and collection service, your customers will not necessarily visit your premises. In this case your delivery vehicle acts like a shopfront and is a highly visible advertisement for your business. You should try to ensure that it looks smart and well maintained. If you use a courier firm to make deliveries on your behalf, make sure that they provide a good service.

Customer relations

Treating customers in a friendly, helpful and polite way is a vital part of creating a good image. You should aim to offer a high quality, friendly and knowledgeable service, which will help to differentiate your business from its competitors. Make sure that you and any staff are well informed about the clothes that you supply. Be prepared to explain dress etiquette to people and advise them which clothes will be most suitable for the occasion in question. Help your customers to make the right choice and select the correct size - in short, do your best to keep them happy.

Make sure that conditions of hire are clearly explained and there is no confusion over damage or loss deposits, or insurance cover if this is offered. Should there be any questions or complaints, do your best to deal with them promptly and politely. A good reputation can only be built up over time, but from the outset you should aim to ensure that customers are satisfied with the service they receive and the clothes supplied.

Advertising your business

It is important that you advertise and market your business so that potential customers know about you and the clothes you offer. There are a number of ways to do this:

  • advertise in your local newspaper and any local directories. Your advertisements should emphasise the services offered, labels stocked and any other features that distinguish your business from the competition
  • network with other related businesses, such as wedding organisers and venues, so that they can pass on referrals
  • use your website to reach a wider market - particularly relevant if you intend to offer online ordering and a delivery/collection service, or specialise in very high quality or unusual clothes not widely available elsewhere
  • advertise in an online directory
  • use social media and blogs to raise the profile of your business and keep in regular touch with customers

You could also consider exhibiting at a wedding show - for example the National Wedding Show. Visit the National Wedding Show website for details of dates and locations.

Buy an existing business

You might decide to buy an existing clothes hire business rather than start your own venture from scratch. Buying a going concern can mean that:

  • the premises, business equipment and shop fittings are already in place
  • there is a stock of clothes ready to hire out
  • the business may already be known to potential and regular customers
  • the business can generate income immediately
  • suppliers have been identified and relationships established with them
  • the business has a track record, which can help if you are looking for finance
  • staff are already in place
  • the business website has already been set up

However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.

Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.

Other matters to consider include:

  • the state of the premises, fittings, equipment and so on. Will you have to spend money refurbishing or replacing assets
  • the condition and value of any hire clothes you are buying. Check this over carefully before agreeing a price
  • is the existing owner prepared to give you some training after you take over
  • existing staff rights
  • how to retain key personnel once you've taken over
  • does the business owe money that you will be responsible for
  • if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller

Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.

Franchises

Acquiring a franchise is another alternative to starting up a new business from scratch. There are several franchise opportunities available for clothes hire businesses - particularly men's formal wear. Franchising means that you still start up your own business, but you can benefit from a well established brand and format. A good franchise will also offer business support and other useful services. However, all this comes at a price - the franchise fee that you'll have to pay to the franchisor.

Before entering into a franchise agreement, it is advisable to compare the terms of different franchisors to be sure that you are getting a good deal. Go through the contract with your solicitor before signing anything.

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