Small Fashion boutique

Debs87

Hi Everyone,

I'm new to boards to hope I am posting this in the right place!!

Im currently doing a start your own business course as I want to open a small fashion boutique in a good little shopping town. I only have a certain amount of savings but its quite expensive to get started and want to apply to the microfinance board for a loan!! does anyone have experience with with starting there own business?? I would really appreciate any replys!!

Kind regards,

Debs

wmpdd3

Have you worked in retail / fashion before?

Do you know what costs you'll face in year 1?

Do you have a supplier?

Buttercake

Debs87 wrote: »

Hi Everyone,

I'm new to boards to hope I am posting this in the right place!!

Im currently doing a start your own business course as I want to open a small fashion boutique in a good little shopping town. I only have a certain amount of savings but its quite expensive to get started and want to apply to the microfinance board for a loan!! does anyone have experience with with starting there own business?? I would really appreciate any replys!!

Kind regards,

Debs

For microfinace you have to have a loan rejection letter from your bank first.. they give you €25,000 max

Debs87

wmpdd3 wrote: »

Have you worked in retail / fashion before?

Do you know what costs you'll face in year 1?

Do you have a supplier?

Thanks for ur response! I have been a concession manager in retail before and loved it!! I have all my financial projections done for my business plan and all my costs done! I also have been in contact with suppliers and I have gone to tradeshows! Problem is I don't have enough capital to start it! I only have a fith of it

Debs87

Buttercake wrote: »

For microfinace you have to have a loan rejection letter from your bank first.. they give you €25,000 max

Thanks for your response! I have looked into it and know I have to get a bank rejection first which I am sure I will get as ive talked to the banks and know my chances are slim to none!! Do you know what the likelihood of securing a loan with microfinance?

jimmii

Debs87 wrote: »

Thanks for ur response! I have been a concession manager in retail before and loved it!! I have all my financial projections done for my business plan and all my costs done! I also have been in contact with suppliers and I have gone to tradeshows! Problem is I don't have enough capital to start it! I only have a fith of it

I made the move form Retail Manager to Retail Owner last year and had no idea just how different it was going to be. When it comes to your costs there are going to be so many more than you don't envisage so make sure any budgeting has a reasonable contingency I have a tiny 1000sqft shop and it probably ended up costing about €40k to get up and running. Make sure you have more than enough to live off for a good few months as you are unlikely to be able to take out any money from the business for at least 3 months and probably 6. Its such a great thing to do if you get the chance though I used to work 40 hours a week and be wrecked and not really looking forward to going back in now I work way way more than that and am always looking forward to the next day!

Buttercake

Debs87 wrote: »

Thanks for your response! I have looked into it and know I have to get a bank rejection first which I am sure I will get as ive talked to the banks and know my chances are slim to none!! Do you know what the likelihood of securing a loan with microfinance?

You never know your bank might give you something..they need to be seen to be lending to businesses and they'll most likely ask for personal guarantees

i know some people who got financing through microfinance, there are a lot more hoops to jump through than a bank application. You'l should go to your enterprise board officer who will give you more info

what about credit union?

wmpdd3

Debs87 wrote: »

Thanks for ur response! I have been a concession manager in retail before and loved it!! I have all my financial projections done for my business plan and all my costs done! I also have been in contact with suppliers and I have gone to tradeshows! Problem is I don't have enough capital to start it! I only have a fith of it

Brilliant, you know how hard it is out there, who your customer and competition are and the date code on your stock.

Looks looks finance is your hurdle, maybe look for a partner with no time but lots of money!

Have you tried a pop up shop? Or buying clearance lines so you can raise money for your proper shop.

jimmii

wmpdd3 wrote: »

Have you tried a pop up shop?

This is always a great idea it is something I wish I had done to really get a feel of what it is like running things on your own and to get some feedback on your planned stock etc.

Debs87

jimmii wrote: »

I made the move form Retail Manager to Retail Owner last year and had no idea just how different it was going to be. When it comes to your costs there are going to be so many more than you don't envisage so make sure any budgeting has a reasonable contingency I have a tiny 1000sqft shop and it probably ended up costing about €40k to get up and running. Make sure you have more than enough to live off for a good few months as you are unlikely to be able to take out any money from the business for at least 3 months and probably 6. Its such a great thing to do if you get the chance though I used to work 40 hours a week and be wrecked and not really looking forward to going back in now I work way way more than that and am always looking forward to the next day!

Thank you so much for the reply! I found it really helpful! I know its a lot of work and I am prepared to not have an income for myself for a couple of months to a year!! ( I have a good partner ) ! €40k is so much money! the unit I am looking at is about 600 square feet! its small and I think start small and build up! I have the money for set up and rent etc but its the stock that I need a loan for! as u can understand I am nervous about taking out a big loan for a business! I know I will be much happier tho! when I lost mu job in retail and I went back to college and got a degree in finance and working in accounts at the min and I am miserable! all that's keeping me going is knowing someday I will have my own boutique! Do u mind me asking you a question regarding stock!!! when you started did you have a yrs stock paid for or just have a year and money that you made paid for the next 6months of stock?? brands that I am looking at do not give credit!!:)

jimmii

Debs87 wrote: »

Thank you so much for the reply! I found it really helpful! I know its a lot of work and I am prepared to not have an income for myself for a couple of months to a year!! ( I have a good partner ) ! €40k is so much money! the unit I am looking at is about 600 square feet! its small and I think start small and build up! I have the money for set up and rent etc but its the stock that I need a loan for! as u can understand I am nervous about taking out a big loan for a business! I know I will be much happier tho! when I lost mu job in retail and I went back to college and got a degree in finance and working in accounts at the min and I am miserable! all that's keeping me going is knowing someday I will have my own boutique! Do u mind me asking you a question regarding stock!!! when you started did you have a yrs stock paid for or just have a year and money that you made paid for the next 6months of stock?? brands that I am looking at do not give credit!!:)

When we opened we basically had the stock that was on the floor and that was it! We have pretty much no storage so we didn't really have the option having a lot of stock and also didn't have the money!! I would imagine we had enough stock for about 2 months tops at the start! Almost all our suppliers are in Ireland/UK so we normally get our stock within a week of it being ordered so don't need to hold a lot of stock in store. Our stock value now is approximately triple what it was at the start we took very little money out last year we just put it back into buying more stock or doing advertising.

Very few places offer credit any more especially to new business. We have a couple of Irish suppliers who still do and you do find the odd UK one but they are very restrictive on who they offer it to.

Do you have a unit in mind already? The unit can dictate a lot of the costs we got massively lucky with the unit we choose as it was done up especially for us to let it and it was immaculate our only real fitting costs were putting up a partition wall and having the alarm installed and then buying the furniture.

That job in accounts might be a pain now but I would imagine it will definitely have been worth it when you have your own shop up and running its so important to have your accounts done well makes life a hell of a lot easier when it comes to doing your returns.

Keep an eye out on sites like www.wholesaleclearance.co.uk they occasionally get some really good clothing in at crazy prices last year I got Mou boots off them that retail at €210 for under £40 sold them all for €99 in no time at all.

If you have any other questions feel free to ask I wish I had been able to find someone who had just going through the start-up process to find out what it was really like!

sandin

Thankfully the market has turned so if there's a gap in the market it could work.

Finance is never a barrier - I set up with 20k after being bust in 2007 and this year I'll turnover in excess of €4m. Its your attitude to risk that is most important.

If you have a family / mortgage /other commitments, then your risk level would be very low and I'd say look elsewhere, but if you're single / no or small mortgage / no kids, then you can safely have a much higher risk threshold.


Firstly, see the total amount of savings you have - lets guess at 25,000.

Secondly - make sure you get a shop is is mostly fitted out and then be creative with paint and images to put your own mark on it.

Thirdly - get rent free period from the landlord - give him/her your business plan and make sure they take a little risk too. 3 months rent free + then pay rent on a monhtly basis should be achievable.

Between rent free & creative shopfitting, your start-up costs should be well less than €10,000. (plenty of secondhand fittings and tills on donedeal or adverts.ie )

So let's say you have 15k to put into stock - do 50/50 deals (50% payment on delivery, 50% 60 days) with suppliers or 33/33/33. (33% on delivery, 33% 30days, 33% 60 days)

Start small and keep it exclusive - ensure you put enough of a mark-up to allow for 20% off (weekend promotions, fashion nights and friends/family discounts)
Remember about a third of your stock will be sold in an end of season (every 3 months) sale at 30%-50% discount.

If you do have 20k - 30k, then you should be able to get 15k overdraft from the bank. (use your current bank)

Another option - if you have a friend or relative that has spare cash, they could invest under the Eiis scheme - full tax relief on their investment, so if they earn over €34k a year, they will get 41% tax refund on their investment over 3 years. Revenue also have a scheme that you can claim back tax paid over the past 3 years if you are setting up a business.

Marketing - for a small shop, there really is only one cost effective way - facebook. Learn how to market and buy local like on facebook and it will save you a fortune in other forms of advertising.

jimmii

Excellent post there from Sandin lots of good ideas!

To add to the marketing points be sure to take advantage of your "new" status we were able to get lots of free editorial when we were starting up as Editors want writers to be finding new stuff to write about just email everyone you can find who is in a position to write about you all blogs, magazines, newspapers etc you'd be amazed how many will be looking to fill a little space and a new shop can fit that perfectly! We had bits in Irish Times and Sunday Times as well as three or four national magazines which brought in a lot of people.

Agree on the facebook point we only started advertising seriously on FB in October/November for the run up to Christmas and it worked way better than we thought we covered our costs purely on sales done through the website and had a lot of people coming in the shop from seeing the advert and we now have a much bigger audience on our page to use now too. Really aim at a defined a target user as possible though as that will help keep your cost per like down.

HairMare

Hi guys off topic here slightly is the 25,000 from micro finance a loan or a grant? Thinking of applying, not a bank on earth would pass me for finance so would be ideal either way

jimmii

HairMare wrote: »

Hi guys off topic here slightly is the 25,000 from micro finance a loan or a grant? Thinking of applying, not a bank on earth would pass me for finance so would be ideal either way

Its a loan repayable over 3 years (although sometimes you can get it over 5) and the interest rate is 8.8%.

http://microfinanceireland.ie/faq/

HairMare

jimmii wrote: »

Its a loan repayable over 3 years (although sometimes you can get it over 5) and the interest rate is 8.8%.

http://microfinanceireland.ie/faq/

Thanks for that I wasn't sure. Do you is it compulsory to do a syob course to get btwea or any grants? Thanks

jimmii

HairMare wrote: »

Thanks for that I wasn't sure. Do you is it compulsory to do a syob course to get btwea or any grants? Thanks

I don't know I would imagine it covers it all on the website as far as I know the only major thing is to have been rejected by the bank although I am sure there are other restrictions as well. I guess you would need you will be able to pay back nearly €800 a month for 3 years too!

HairMare

jimmii wrote: »

I don't know I would imagine it covers it all on the website as far as I know the only major thing is to have been rejected by the bank although I am sure there are other restrictions as well. I guess you would need you will be able to pay back nearly €800 a month for 3 years too!

Hi Jimmi thanks, im applying foe btwea and my local fas office is insistent that I have to waste another 3 maths doing a start your own business course, has anyone else had this issue?

Peterdalkey

I have mentored a couple of people who wanted to go on the STEA and BTWEA schemes and part of the criteria is an assesment interview which seeks to ascertain candidate suitability and project viability. Clearly it has been decided that your experience and knowledge of business matters needs to be upgraded to help you make a better go of your enterprise. I would have given exactly the same advice to those going into any business for the first time. To have any chance in a new buisiness you need to know at least the basics, and these couses have evolved over the years into a pretty comprehensive grounding in the basics of business.

HairMare

Hi peter I understand that completely but I've gone to trade shows, secured suppliers, have detailed business plan with projections contingencies etc. I have even set up same for a friend b4 xmas so have had a trial run in effect. I hasten to add she refused to look at business plan point blank as I hadnt completed syob course. It seems to me to be box ticking on fas part and they wonder why people don't come off jobseekers. I have no problem doing the course but next one won't be finished for 3 maths. Rant over...

Peterdalkey wrote: »

I have mentored a couple of people who wanted to go on the STEA and BTWEA schemes and part of the criteria is an assesment interview which seeks to ascertain candidate suitability and project viability. Clearly it has been decided that your experience and knowledge of business matters needs to be upgraded to help you make a better go of your enterprise. I would have given exactly the same advice to those going into any business for the first time. To have any chance in a new buisiness you need to know at least the basics, and these couses have evolved over the years into a pretty comprehensive grounding in the basics of business.

joegdoyle

Could i ask what the 40k was spent on?

jimmii wrote: »

I made the move form Retail Manager to Retail Owner last year and had no idea just how different it was going to be. When it comes to your costs there are going to be so many more than you don't envisage so make sure any budgeting has a reasonable contingency I have a tiny 1000sqft shop and it probably ended up costing about €40k to get up and running. Make sure you have more than enough to live off for a good few months as you are unlikely to be able to take out any money from the business for at least 3 months and probably 6. Its such a great thing to do if you get the chance though I used to work 40 hours a week and be wrecked and not really looking forward to going back in now I work way way more than that and am always looking forward to the next day!

jimmii

joegdoyle wrote: »

Could i ask what the 40k was spent on?

Rent/Deposit, stock, furniture & fittings, marketing material, then running and living costs until we were turning a profit. You can get a shop open for a lot less but you can't keep it going for long if you don't have anything else to spend. We opened in February and our first profitable month was June (€12.84 profit boom!!).

joegdoyle

How would a pop up store work?

jimmii

joegdoyle wrote: »

How would a pop up store work?

Contact the Landlord of a vacant unit some might need some convincing but the plus for them if its been vacant a while is that is that if you can show a business can do well there then its more attractive to potential tennants nothing looks worse than a long term vacant unit. Some Landlords even will let you have it for free I seem to remember a girl who got a unit for 3 weeks in December for nothing.

If you have a website running around it then it means you can try create repeat customers for the site and also means you have a customer base if you do get a shop open full time.

Then set up till fill shop with clothes get people in the door sell stuff!