Consignment University

"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.

Financing 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?

Incorporation 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.

Marketing Plan 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.

Target Audience 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
Maternity Clothing
Office Furniture
Used Sporting Equipment
Women's Clothing Boutique