"An investment in knowledge pays the best interest." -Benjamin Franklin
Elements to Consider When Creating a Consignment Shop Business Plan
A well thought out business plan is crucial to the success of a consignment shop. Whether you
are in the planning stages or have a thriving resale business, a formalized business plan can help
you secure funding, outline clear goals and objectives and guide all your actions so that your
store can turn a profit.
There are many excellent online resources that can give you detailed information on how to
craft an exceptional business plan, so we will just take a look at some of the most important
considerations as they relate to creating a consignment shop.
You will need to have most of the financial details sorted out before opening your store. Where
will the money come from to start the consignment shop? Do you have personal savings, will
you need to secure a bank loan or can you obtain private investments? You need to consider
overhead expenses, including rent, utilities and employee salaries, as well as startup expenses,
including shelving, tags, bags, a cash register, signage, and inventory. You will need to estimate
how long you can stay in business with no additional funding so that you give your store a fair
chance of turning a profit.
Return on Investment
When do you expect to turn a profit? A realistic goal might be six to twelve months depending
on your inventory, location and competition. You will also need to decide how to pay yourself.
Will you draw a monthly income or will you pay yourself quarterly?
Deciding how to structure your small business
can be a difficult task. Most resellers choose to
become sole proprietors. However, if you have a business partner, you may want to consider an
LLC since this will protect you from personal liability issues and paying double taxes.
I have always said, you may have the greatest product on the market, but if no one knows about
it, no one is going to buy it. Finding unique marketing angles is crucial to the success of your
business. What outlets can you advertise in? What sets you apart from your competition? You
will need to consider different ways to attract customers and consignors.
You can't be all things to everyone, so you must decide on a niche audience that you can target.
Even if you sell a wide variety of products, you should consider specializing in one or two areas.
For example, a teen clothing shop could have the "largest selection of prom dresses in town"
or an antique shop could specialize in collector trains. When you have a clearly defined target
audience, you will have a built-in customer base and consignor clientele.
Example Business Plans
Kids Clothing Store
Used Sporting Equipment
Women's Clothing Boutique