How to Start a Shoe Business

Everyone loves shoes, we wear them every day, and they are great for fashion. But how can you build a shoe business from the ground up?

In this article, you’ll learn everything from finding your target audience to organizing your business startup and handling finances.

Read on to learn about the logistics of starting a shoe business and what goes into it.

Why Start a Shoe Business

The market cap for the shoe industry was nearly $400 billion in 2022 and is only expected to grow over the years. This offers you a chance to tap into a high-demand market and express your creativity. 

Some advantages include the ability to capitalize on ever-changing fashion trends, cater to diverse customer segments, and generate substantial profits with the right marketing strategies. 

However, some challenges you may encounter are stiff competition, inventory management, and staying updated with the latest trends and technologies. 

As exciting as a shoe business can be, it’s best to weigh the options of what it truly takes to make it a sustainable business. 

14 Steps to Starting a Shoe Business

If you’re convinced to want to pursue this venture and commit to the ups and downs you may face, let’s go over the 14 steps you should take to get your business started on the right foot. 

1. Research Your Target Market

Before you start a shoe company, extensive research about your target audience is essential. This includes knowing the demographic characteristics, preferences, and lifestyles of your potential customers. 

You can start with a simple Google search and dive deeper into focus groups that discuss topics about business and shoemaking. 

In addition, studying the competition can provide important information about successful and unsuccessful approaches in the industry. 

Once you know the needs of your target market, you can develop a unique selling proposition and tailor your products and promotional tactics accordingly.

2. Decide on Your Business Model

The next step consists of choosing the business model you wish to pursue. This will help determine things such as how the shoes are made, shipped, and designed.

Three main business models to choose from:

• Ownership of production: This model involves managing the entire production process, from sourcing materials to manufacturing the shoes. This approach allows for greater control over quality and costs but may require significant upfront investment and operational expertise.
• Wholesale: In this model, you would purchase shoes in bulk from manufacturers and sell them either online or through a physical store. Wholesaling can provide higher profit margins and better control over inventory, but it also requires storage space and capital to purchase inventory upfront.
• Dropshipping and Print on Demand: This model involves partnering with a supplier or manufacturer who will handle the production and shipping of the shoes directly to customers. With drop shipping or print-on-demand, you do not need to maintain an inventory — which reduces upfront costs and storage requirements. However, this approach may offer lower profit margins and less control over product quality and shipping times.

3. Source Suppliers and Manufacturers

When it comes to the quality of your product and the efficiency of how it is shipped, you won’t want to compromise too much for budgeting purposes. 

This is why choosing the right partners will be essential to ensure your business provides top-quality products that are delivered on time. 

To ensure that you work with reliable suppliers and manufacturers, consider these factors when searching for the best deal.

• Identify product needs: Determine the types of shoes and materials you want to offer based on your target market and niche
• Research suppliers: Look for reputable suppliers and manufacturers with a positive track record in the shoe industry
• Request samples: Obtain product samples to evaluate quality, design, and craftsmanship before committing to a supplier
• Compare prices: Gather quotes from multiple suppliers to compare prices, ensuring you find the best balance between quality and cost
• Assess shipping costs: Consider shipping fees, lead times, and minimum order quantities when selecting a supplier or manufacturer
• Negotiate terms: Discuss payment terms, return policies, and other conditions to establish a mutually beneficial partnership
• Build relationships: Maintain good communication and cultivate strong relationships with your suppliers to ensure smooth business operations and long-term collaboration

4. Develop a Business Plan

After you do some research and get an idea of how you want to approach your business, let’s go over the fundamental elements of writing a business plan.  

Target Customers

When you determine your target audience, you can figure out who you are selling to. You can do this by researching the demand for the type of footwear you want to sell.
For example, if you want to sell boots, you need to determine the ideal buyer. Take into account the buyer’s age, lifestyle, gender, and functionality of your shoes. 

Projected Costs

Dealing with the finances of any business can be a burden. But an important element to take detailed accountability for. There are several expenses to consider when investing in initial costs and sustaining the business. 

Here are some things to consider:

• Production costs
• Inventory costs
• Marketing and advertising expenses
• Shipping and logistics costs
• Operating expenses
• Legal and administrative fees
• Website development 
• Payment processing fees

Logistics and Distribution

The logistics and distribution should cover the overall operation of your business, from how the shoes are manufactured to the packaging and shipping.
This process should ensure the quality of transportation and the production of the shoe itself to fulfill customer expectations. 

Pricing Strategy

Your pricing strategy will ultimately determine your profit margin, so it’s best to fully lay out how you will allocate your investments.
Staying within a reasonable budget will help the business sustain itself over the long term and won’t jeopardize your company going bankrupt. 

Name of Business

The brand image is a big selling point for a successful shoe business. So carefully planning to showcase your brand equity will play a prominent role in your marketing efforts. 

5. Choose Your Business Structure

Once you have created your business plan, you must choose a business structure that best suits your needs.

In this section, we will go over the main types of business structures and their advantages and disadvantages.

Sole Proprietorship

A sole proprietorship is a simple business structure where a single individual owns, manages, and operates the business. While this entity type allows for complete control and easy setup, it also makes the owner personally liable for the business’s debts and legal obligations.

Advantages:

• Easy to establish: Simple and straightforward to set up, with minimal paperwork and registration requirements
• Complete control: The owner has full authority over business decisions and operations
• Tax simplicity: Business income is reported on the owner’s personal tax return, avoiding the need for separate business tax filings
• Lower costs: Fewer legal and administrative expenses compared to other entity types
• Flexibility: The owner can easily change the business structure or dissolve the business if needed

Disadvantages:

• Unlimited liability: The owner is personally liable for all business debts and legal obligations, putting personal assets at risk
• Limited access to funding: Could face challenges in securing loans or attracting investors, as they are perceived as riskier than other entity types
• Less perceived credibility: Some customers, suppliers, or partners may view a sole proprietorship as less professional than other business structures
• High workload: As a sole proprietor, you’re responsible for all business activities on a daily basis making it potentially difficult to manage 

General Partnership

A general partnership is a business structure in which two or more individuals jointly own, manage, and operate a business, sharing profits and liabilities. This type of entity allows partners to pool resources and expertise but also makes them personally liable for the business’s debts and legal obligations.

Advantages:

• Shared responsibility: Partners can divide management tasks and responsibilities, allowing for a more efficient operation
• Diverse skillset: Partners may bring complementary skills, expertise, and connections to the business, increasing its potential for success
• Easier access to funding: Partnerships can pool financial resources, improving the ability to secure loans or attract investors
• Tax simplicity: Partnership income is reported on each partner’s personal tax return, avoiding the need for separate business tax filings

Disadvantages:

• Unlimited liability: All partners are personally liable for the business’s debts and legal obligations, putting their personal assets at risk
• Potential conflicts: Disagreements among partners may arise, impacting decision-making and overall business operations
• Shared profits: Partners must share profits according to their ownership stake, which may not always align with each partner’s contribution to the business
• A breach in agreement: If one commits fraudulent activity, it can result in heavy legal actions and litigation 

Limited Partnership

A limited partnership is a business structure that consists of one or more general partners who manage the business — assuming full liability. Plus, one or more limited partners invest in the business but have limited liability and involvement in management.

Advantages:

• Limited liability for limited partners: Limited partners are only liable for the amount they invest, protecting their personal assets from business debts and obligations.
• Access to capital: Limited partnerships can attract investors, as limited partners can invest without becoming actively involved in the business’s operations.
• Pass-through taxation: Partnership income is reported on each partner’s personal tax return, avoiding the need for separate business tax filings.

Disadvantages:

• Unlimited liability for general partners: General partners are personally liable for the business’s debts and legal obligations, putting their personal assets at risk
• Complexity: Limited partnerships require more legal and administrative work to set up and maintain compared to other business structures
• Less control for limited partners: Limited partners have limited involvement in decision-making and management, which may not appeal to some investors
• Potential conflicts: Disagreements among partners may arise, impacting decision-making and overall business operations

Limited Liability Company

A Limited Liability Company (LLC) is a hybrid business structure that combines the limited liability protection of a corporation with the pass-through taxation benefits of a partnership or sole proprietorship.

Advantages:

• Limited liability: Owners, called members, are not personally liable for the business’s debts and legal obligations, protecting their personal assets
• Tax flexibility: LLCs enjoy pass-through taxation by default, but can also choose to be taxed as a corporation if it’s more beneficial
• Management flexibility: LLCs can be managed by members or appointed managers, allowing for various management structures
• Less paperwork: LLCs generally have fewer reporting and compliance requirements compared to corporations

Disadvantages:

• State-specific regulations: LLC rules and requirements may vary by state, adding complexity to the formation and operation of the business
• Limited access to funding: Investors may be less inclined to invest in an LLC than a corporation, making it more challenging to raise capital
• Less perceived credibility: Some customers, suppliers, or partners may view an LLC as less professional or stable compared to a corporation

Corporation

A corporation is a legal entity separate from its owners, called shareholders, offering limited liability protection and a distinct management structure, with profits taxed separately from the owner’s personal income.

Advantages:

• Limited liability: Shareholders are not personally liable for the corporation’s debts and legal obligations, protecting their personal assets
• Access to funding: Corporations can raise capital by issuing shares, making it easier to attract investors
• Perpetual existence: Corporations continue to exist regardless of changes in ownership or management, allowing for long-term planning
• Increased credibility: Corporations are often perceived as more professional and stable by investors and business partners

Disadvantages:

• Complexity: Corporations require more legal and administrative work to set up and maintain compared to other business structures
• Double taxation: Profits are taxed at the corporate level and then again at the shareholder level when dividends are distributed
• More paperwork: Corporations must adhere to strict reporting and compliance requirements, such as annual meetings and financial statement filings.
• Less management flexibility: Corporations are governed by a board of directors, which may limit the control of individual shareholders over business decisions

There can be a lot of confusion when it comes to choosing a business structure. For more clarity or someone to assist you with any questions, learn more here on how doola can make forming a business easy for you. 

6. Register Your Business

After you choose your business structure, the next step is to register your business. This can be done in several ways. One way to register your business is to apply for an Employer Identification Number (EIN). This unique nine-digit number is required by most businesses and is used for tax purposes and to legitimize your business to the Internal Revenue Service (IRS). 

7. Obtain Necessary Licenses and Permits

Depending on where and how you intend to run your business, you may need to apply for some licenses or permits for your shoe business. For example, you may need a zoning permit if you plan to open your business in a physical location. It is also recommended that you look into applying for a general business license to meet any legal requirements for your company. 

8. Secure Financing

Having the proper funds to jump-start your business will help bolster your growth and expedite your process of making a profit.
Here are ways you can secure funding:

• Personal savings 
• Business loan 
• SBA (Small Businesses Administration) loan 
• Crowdfunding

The type of loan that you qualify for may depend on how you run your business and the business structure you choose. 

9. Choose a Good Location or Online Platform

For a physical store, choose a location that is well-trafficked, easily accessible, and near complementary businesses. For an online business, select a reliable e-commerce platform that offers a user-friendly interface, customization options, and secure payment processing. Make sure the platform or location aligns with your business model and target market to maximize your chances of success.

10. Open a Business Bank Account

Having a separate business bank account is beneficial for several reasons. For one, it simplifies your accounting for your taxes, and two, it legitimizes your business as a serious entity. To apply for a business bank account, you’ll need your EIN and prepare any legal documents such as an Articles of Organization and or your business registration papers. Once you’ve gathered all the necessary documents, you can shop around to see which banks offer the most competitive services for your business needs. 

11. Get Business Insurance

Securing business insurance helps safeguard your business assets and mitigates any liabilities. By getting business insurance, you can have peace of mind in that any risks involved in the business are protected. Some of these include general liability insurance, property insurance, or workers’ compensation. Some insurance is required depending on the state in which you operate and the location of the operation.

12. Hire and Train Employees

Hiring a group of dedicated and hard-working individuals can be challenging. That’s why it’s important to build a solid foundation for your hiring process and training program. Have your hiring manager meet each candidate and conduct a thorough interview to have a live interaction with potential employees. This will create a direct report with the hiring manager who can selectively choose your employees based on their credentials and overall personality. 

For training, create a structured guide for your new hires to maintain standards for your operation. No one will work harder on your business than you, so always ensure they are content with their jobs and offer any motivation or bonuses when necessary. 

13. Keep Track of Your Inventory

Keeping track of your inventory can easily get out of hand once you begin to get several orders — making it critical to properly manage it, so you stay on top of the supply and demand of your product. Thus, accurate inventory management will help maintain optimal stock levels, preventing stockouts and overstocking. 

You can manage your inventory manually or by using specialized software.

Manual tracking

Keep a record of your inventory in a spreadsheet, updating it regularly as products are added or sold. This method can be time-consuming and prone to errors but may work for small businesses with limited resources.

Specialized software

Use inventory management software to automate and streamline the process. These tools can help track stock levels, monitor sales trends, and generate reports, making it easier to manage your inventory and make informed decisions. Some software even integrates with e-commerce platforms for seamless inventory management across multiple sales channels.

Zoho inventory and Monday.com are two popular choices when it comes to organizing your finances and inventory for e-commerce businesses. 

14. Launch and Market Your Business

The last step of starting your shoe business is an elaborate marketing plan. You may not need to implement all of these strategies in your marketing efforts. However, researching which strategy will work best will be most fruitful (always keep the target audience top of mind).

• Optimize website: Create a visually appealing, user-friendly website with clear product information and easy navigation
• SEO: Implement search engine optimization (SEO) strategies to improve your website’s visibility on search engines like Google
• PPC advertising: Utilize pay-per-click (PPC) advertising to target potential customers based on their search queries and interests
• Social media accounts: Create accounts on popular social media platforms like Instagram, Facebook, and Twitter, and engage with your audience by sharing content, promotions, and updates.
• Influencer marketing: Partner with influencers in your niche to showcase your products and reach a wider audience
• Email marketing: Build an email list and send regular newsletters with promotions, new product launches, and company updates
• Content marketing: Produce high-quality content, such as blog posts, videos, or podcasts, to provide value to your audience and establish your brand as an industry authority
• Promotions and discounts: Offer special promotions, discounts, or giveaways to attract new customers and encourage repeat business.

As mentioned earlier, it’s best to keep your ideal customer in mind when it comes to marketing your product. Any strategy can be fruitful and is ultimately beneficial. However, if you have a limited budget, mastering a few of these strategies can be enough to ensure success.

Your Roadmap to a Thriving Enterprise

Breaking into the shoe-making business can be creatively fulfilling and very profitable if done right. But with high competition — and several logistics you have to navigate through, it can be overwhelming to make sense of it all. 

With doola’s bookkeeping services, we make it easier for you to form your business structure, sustain your business, and stay legally compliant. 

So if you need an extra hand with staying organized and up to date with your finances, consider a free consultation with one of our consultants. 

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