Howdy Folks! My wife recently lost her job. The income from my full-time teaching gig isn't stellar ($38K) but I'm getting a few extra stipends this year for being department chair ($2K) and a mentor to a new teacher ($500). That alone is not enough for us to survive, but we are fortunate to have a side income from both my UoP courses and her UoP courses, as well as my course with the local community college. These are almost enough for us to make do, but we clearly need more to "get ahead". My wife has been applying for a few jobs, but most of the ones out there are part-time with no benefits. Lately she's (well, me really) been considering starting her own business. We used to frequent a children's consignment shop in the neighboring county, but it closed at the end of August when its owner found a full-time job with excellent benefits. Since it closed, we've been talking about how there's a complete lack of places for parents to consign clothes and toys. On the way back from a trip today, we started discussing the possibility of opening up such a store. We scoped out a few locations, as there are TONS of retail spaces in town. Our main concern, however, comes from funding it. Because we lost a HUGE amount when we sold our house last year, we're in a bit of debt. I've heard that people can get loans to start a business, but I have no idea how that works. Do either of you have any experience doing this? With all the MBAs on here, I'm hoping someone might have some advice. This type of store is definitely "in demand" in the area, so it could have the possibility of bringing in a decent amount towards our income if we can do it properly. It's the getting started part that we seem to be having trouble with. Thanks! -Matt
How much are you looking to raise? Perhaps we can all chip in and open the "Degree Info Consign for Kids"
I don't know about the whole "government grants" thing but I'd suggest that you go to nolo.com and look at some of the books/software that they offer. My experience is that they are of very high quality and could save you a lot of money related to the legal establishment of a business, taxes, etc. Best of luck.
This isn't what you asked, but why not think about trying it part-time on a shoestring first instead of leasing a location? There's a children's consignment business in my area that sets up in a temporary location (the National Guard Armory, I think) to hold sales twice a year. The lady who runs it pretty much has the process down to a science. I think I can dig up a copy of her brochure, which includes her instructions to consignors, to send you if you might be interested in considering that approach.
Thanks. We're thinking the consignment part could be just the start up, and we could hopefully expand from there. We know the store would work because the previous store did very well. It'd still be open if the owner hadn't gotten a full-time job. The store was run by a mom and daughter team, and the mom couldn't handle it by herself. We're just trying to think about the financial side of setting it up. We know we'd have to buy some things (computer, racks, hangers, etc.) and pay for rent and utilities, but we'd like to look into a small business loan or something. We're both teachers (well, she was until she was let go) and we'd like to be able to spend more time with our own kids. This store might help us do that. -Matt
A few questions: (1) If the consignment store was doing so well why didn't the old owner sell to someone that saw the profitability in it? Why was it just shut down? If the old owner was doing so well why would they want to get out of the business? They could've expanded and gotten rich instead of now working to make someone else rich. Just a thought. (2) Have you considered getting a p/t time job in this industry to see if it's right for you? Even if you make a ton of money and hate what you're doing you'll be grossly underpaid. (3) Retail is a tough gig. You'll be going up against people that know their stuff in this industry. You must do your research to succeed. Everything looks simple from the outside looking in but they just make it look simple because they're so good at it. Just food for thought.
She told us there was talk of that, actually, but I guess no one wanted to buy them out in the end. The owner got a full-time job working at home. I'm not sure if they were doing well enough to call themselves rich, but the store was open for about 18 months, and every time we were in there, other people were in there buying clothes too. It was a very positive place. My wife and I have both worked retail in high school and college. It's not so bad when you deal with the same customers over and over because you form a relationship with them. I think the biggest difference here is that we'd own the place. We really wouldn't be up against that many people. There's only one other children's consignment store in the area, and that place is an utter wreck. It's just a bunch of crap thrown together, and there's no organization. The store which just closed was the opposite. It was organized, clean, and pleasant. The thing is, these stores must do pretty well because the other messy one has been around for years. However, everyone I know who goes into Kids Kloset (the other store) complains about how messy it is. If we were to open up something to compete and provide a better environment, I think we'd do just fine. -Matt
from early 2004 till late 2006 we owned a business. As a homeschool project in the fall 2003, our kids did a theme unit on business. At the time, they suggested we start a business for real. Consistent with my personality, I was all over that idea lol. Anyway, we let them pick, and they picked an ice cream business. We went in with an exit strategy (in retrospect, this was very smart) to sell in 1 year. So, many of our early decisions were based on that. That helped us (me) keep costs down, as I have a tendency to "mightaswell do it right" everything. We borrowed $20,000 as a home equity loan. I think that would be hard now with home values down, but that's what we did then. Our kids did a lot of the fun and I did all the work. I won't go into it, but with a small baby and toddler- your wife is going to lose her mind. The volume of legal crap/permits/dealing with govt agencies-accountants-lawyers-etc was insane. There will be less in your case since we had vendor permits/hearings/ vehicle insurance/licensing issues on top of health code, safety and sanitation inspections and permits. Without hesitation, I can tell you it was >40 per week for just getting legal and started up. That's not spending one minute selling ice cream. Arranging for vendors, delivery, the purchase of the bus (we had it gutted and fitted) as well as marketing- it's a lot of work. So, from about JAnuary - May we did all that. As we opened in May we were still not 100% ready, but needed $ coming in. We were VERY successful. There were 2 other businesses we competed against, we put one out of business. We were on the local news once, and in 2 parades. The paper did a story on us too. Our bus was wrapped, we had uniforms, custom music, etc. We averaged 250 transactions on weekends (3pm Fri- 8pm Sun) and about 50 transactions per day on weekdays. We averaged 6 days per week, which all told, was about 500 transactions per week. We did this until Labor Day, then ran weekends. At that point, we started to organize to sell. We had a buyer immediately, and sold for asking price- which was exactly the amount we owed. We got VERY lucky. So, I'm telling you all of this because if I ever were to go into business again, I would NEVER get into selling inexpensive retail items. In our case, we ran a 50% food cost, so a $1.50 item cost us about .75 Do the math. Our check average was about $1.50 per person. We sold $1 ice pops up to $3 ice creams, but kids generally ordered the ice pops. Our gross per week was always about $600-800. It took 500(!) transactions to make that happen. Imagine having 500 customers a week. We were lucky, but there just isn't any money in selling $2 items. Our gross minus gas, permit fees, insurance, equipment rental, and product purchases left us a profit of about $50-$100 per week. Now, we made a profit- so that's rare for a first season, but let's be real. My concern with your business, is that you'll have the same pitfall that we did, simply not being able to generate enough $ per transaction. I shop consignment, I know how it works. You'll be taking about half of a sale. Remember, you'll pay taxes on your portion, but you'll be giving away pre-tax money to the consignee. Sales tax doesn't count- that's technically never income. Before borrowing a penny, take sideman's advice. Send your wife over to the crappy consignment that you spoke of. Have her do her homework. How many customers are they seeing a day? What kind of check average is being spent? What are their daily sales? How much $ do they pay their staff? What problems or frustrations does the owner experience on a daily basis? Why? This is all FREE EDUCATION you can get with NO RISK. After all that, I hope I don't sound like a downer. In fact, I fully intend on starting another business some day. It was a WONDERFUL experience.
