You have a lofty but attainable goal—to start a store with just a few thousand dollars. It's possible, but to do this you must be willing to start small and grow bigger and better later, when you can make a larger investment. When you start a physical clothing store you have to pay rent (including a downpayment), buy clothes that might or might not sell, pay overhead (lights, credit card fees and other bills) and buy fixtures to display your goods. The quickest way to start a clothing store cheaply is to create an online store. You might even have some change left over.
Purchase a website domain, hosting service and shopping cart system that allows you to upload products. This will cost you about $100 plus about $15 per month for web hosting. Hire a web designer to create an attractive e-commerce website design for your new online clothing store. This will likely be one of your most expensive expenditures—expect to pay at least $500-$1,000 for a good web designer. (See "Resources" below for a site where you can find more on hosting services.)
Apply for a merchant account that can be linked to your website to accept credit card payments from your customers. You can also open a P.O. box and list it on your website to accept check and money order sales from your customers. The initial fee to open a merchant account will be around $100. You will also pay a monthly service fee of about $20 to $30. A post office box will cost about $50 per year. (See "Resources" for more on merchant accounts.)
Determine the type of clothes that you want to sell in your new clothing store. You can focus on a small niche (such as goth wear) or choose to offer a department-store type of selection for your customers, including men, women, juniors and children.
Next, find a clothing distributor who will drop ship individual orders to your customers (see "Resources" below for a site where you can find these companies). This way you won't have to pay anything upfront--you only pay the distributor when you receive an order from the customer. You act as a middleman.
So let's say you receive an order from your customer. You take the customer's money, then forward payment to the distributor, who will arrange to ship the clothing from the distributor warehouse directly to the customer's home. You might be charged a small initial fee to start this type of arrangement with the distributor.
You can also use clothing that you have manufactured yourself, but the investment in clothing, sewing equipment or a manufacturer to make your clothes will likely cause you to exceed your initial budget of $4,000.
Once your website is designed, upload your chosen clothing pieces to your website. Categorize your products by type (for example, purses, shirts, jeans, dresses, elegant wear, men's and women's). The only investment here will be time, unless you choose to hire someone to take care of this task.
Publish your clothing store online. Your final investment will be in generating web traffic to your online clothing store. Hire an SEO marketing firm to take care of the content for your site to draw in hits from search engines. You can find good SEO help for about $500 to $1,000 per month. Place ads with Google Adwords, which will cost you $5 to set up. You will then set your budget for how much you want to spend each month for ads.