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HOw many of you - if you could - start your own retail business - store front boutique?
How many of you still shop[ in smaller stores rather than the large chains - for unique items, atmosphere?
I am considering to get out of my present position (which has been a retailer buyer/designer for 20 yrs) - this job is going no where anymore and thinking that I would love to have my own store, boutiques style - nothing large -
thanks for any input and advice
The boutique store business is tough. First, you're going to log a ton of hours working in the store. You'll have to be open the hours that people want to shop, which means a lot of evenings and weekends. Second, you'll have to find the right product mix to attract boutique shoppers. I would consider this the greatest challenge, but it can certainly be done. With the right products, you can create a strong niche market for yourself. The third challenge will be your profit margin. This will play in closely with your product mix, but will be challenging.
Do you know what type of products you want to offer? Do you plan to open up shop in Boise? Best of luck to you.
Hi SNake
Been thinking about doing it in Boise - I have been in retail for 20 years with the big box people -
I hear what you say about the hours - and that would be okay - but you brought up a good point on margin - I was thinking in todays world and with a good rent deal a profit margin of 50-55% would be good
art, accents for the home, toiletries, candles, sm decorative chests
jewelry
I know that area is heavy with college students and then there are CAlifornians moving in, and then the local people - winery, and outdoor sports seem to be the main attraction as well as the local sports.
It would probably depend on your location and what exactly you're selling but I wanted to open a boutique selling apparel & accessories. In addition to the store I would have a web site selling my products and do home parties selling the jewelry, handbags and small accessories. This will allow you to have three opportunities for income but run them all from your main location. While you're at the store you can manage your online store. You can hire a couple people to do the home parties where they get paid a percentage of the sales, so you keep your labor cost down. I had a home party business years ago selling jewelry and accessories and would make $400 - $500 in a couple hours. Type in a search engine Pampered Chef parties or lingerie parties and you can get good ideas how to start the business and run it.
If I were to ever take the plunge in a retail business it would have to be a pet cafe. There was one near where I used to live. My dog & I went there every single Saturday for lunch.
It was an awesome place full of fresh baked goodies for dogs and cats, plus premium foods, toys, etc. The owner had costume parties for the dogs every year for Halloween and photos with Santa every Christmas. I would drop $50 every time in that place.
As far as other types of boutiques, I rarely shop at them. Prices are usually too high (says the girl who spent $50/week on dog treats).
I'm not sure how you're calculating your intended profit margin, but I believe you're way too low.
You must maintain a 3 times your net cost of goods margin in retail to survive, if you are going to cover your overhead, expenses, and have something for an income out of the business. (That means you buy at $1, you sell at $3 ... don't forget freight costs or acquisition costs of goods). Don't forget that you'll have to take markdowns and shrinkage out of your overall gross profit picture, too.
Unless you're doing this as a non-profit business, you'll need to maintain significantly higher profit margins per each item than a "big box" store that moves a lot of volume each day over many hours of operation, having a goal of $x's sales per square foot per day/week/month/year. You will not be able to keep your storefront open that many hours without hiring help, and that opens up a huge amount of additional business expenses, taxes, UI, insurance, Workman's Comp, and similar expenses.
So, the question is: If you realistically price your goods so you maintain your profit margins, can you sell them at this price point in the locale you'd like to be at?
You must maintain a 3 times your net cost of goods margin in retail to survive, if you are going to cover your overhead, expenses, and have something for an income out of the business. (That means you buy at $1, you sell at $3 ... don't forget freight costs or acquisition costs of goods). Don't forget that you'll have to take markdowns and shrinkage out of your overall gross profit picture, too.
Unless you're doing this as a non-profit business, you'll need to maintain significantly higher profit margins per each item than a "big box" store that moves a lot of volume each day over many hours of operation, having a goal of $x's sales per square foot per day/week/month/year.
Interesting information - how did you come up with the 3x's net cost number? I'm curious because I'm about to start up a retail operation and never heard this requirement before.
There are some items that you won't be able to even mark up 100% to be competitive but you have to make it up with items you can mark up 300% or more. Jewelry in stores like Macys is marked up so high it's crazy. I had a ring from Macys that cost $50 no big deal but then I saw the exact same ring at a trade show for $3. Sell jewelry & supplement with other items, you can do very well.
I suggest going to a lot of trade shows and get familiar with prices and what sells before opening. Some shows I go to there are booths you see noone buying and then others where people are knocking each other over to place an order and buy. You want to be selling what they have in their booth.
Another tip; when you open your store utilize the space well. I go into stores sometimes that are half empty or set up badly. Use every square foot you can, especiallly if you're renting. For every spot you're not selling something, it's money you're paying rent and not getting return.
These are just my opinions but I've run several multi million $$$ businesses. I'll say it again, you have to have a web site, it's the present and definitely the future.
Last edited by Global Friend; 09-08-2007 at 05:06 PM..
mbuszu ... the figure I cited is not an "absolute" requirement, but is a general guideline for retail (and many manufacturing or WD) businesses.
With a personal history as a manufacturer, warehouse distributor, rebuilder, manufacturer's rep (in hard and soft goods), and retail service sector or parts sales busines owner ... I can only tell you the guideline number that I've seen to be true in many business segments that were able to survive and be a successful business.
You simply must have adequate cash flow and profit margins to survive and be successful in business at any level. Otherwise, you're only churning dollars and not making any money, or may be losing money ...
Obviously, there are sectors where such margins aren't needed, such as financial product businesses, or commission sales work. I know of some money brokers who work on 1/15 of one percent commission ... but the smallest amount they handle is in the multi-millions of dollars, and they do a lot of trades every day. And, there are several sectors which require substantially higher margins than I mentioned to be able to design/develop/create their products and/or services.
So, my guideline number is rather predicated upon retail goods at a retail storefront point of sale.
how many of you - if you could - start your own retail business - store front boutique?
How many of you still shop[ in smaller stores rather than the large chains - for unique items, atmosphere?
I am considering to get out of my present position (which has been a retailer buyer/designer for 20 yrs) - this job is going no where anymore and thinking that i would love to have my own store, boutiques style - nothing large -
thanks for any input and advice
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