SHOW SPECIAL - Attire Accessories magazine

Firstly why do you want to open a shop?
I know, to sell your products. But have you
considered other routes to market, for instance
the Internet, mail-order, trade fairs, or a market
stall etc?
If you have successfully tried other routes
to market and genuinely feel that you have an
opportunity in ‘bricks and mortar’ retailing, you
must have a solid business proposition in the
form of a business plan. Speak to your local
Business Link for help on this.
Have you got the skills?
If you are already running a business, don’t
assume that you have what it takes to run a
shop. You will need solid retail skills: buying,
merchandising, display and selling skills, in
addition to the general business management
and commercial skills required of any business
owner. This is very important because running
a bricks and mortar shop involves higher fixed
overheads and is, therefore, much more risky
than other businesses.
On the subject of risk, are you prepared
for that?
The cruel fact is that most retail start-ups fail in
the first few years. A profitable online, mail-order
or market stall business can easily become lossmaking
if it fails to cover the extra costs required
by a retail shop.
If you have never run your own business
before, but dream of owning your own fashion
accessories shop, you will be taking an even
greater risk. There is advice and training for startup
businesses - ask your local Business Link for
more information.
If you are looking to buy an existing shop, don’t
automatically assume that a change of ownership
on its own will result in the growth you require.
It is true that a new owner can invigorate a tired
business, but the reverse can also be true if the
existing owner has a loyal customer following.
66 ATTIRE
setting up shop?
If you are thinking of taking the plunge and opening your first shop, Peter Mulhall of
Business Link looks at some of the important questions you will face.
“If you are looking to buy an
existing shop, don’t assume
that a change of ownership on
its own will result in the growth
you require. It is true that a
new owner can invigorate a
tired business, but the reverse
can also be true if the existing
owner has a very loyal following
for some reason.”
Due diligence
This is jargon for investigating and researching
to ensure that the business you are targeting is
worth the investment and is viable. There are two
main elements to due diligence:
1. The market i.e. will it support another shop at
the income you need;
2. Financial: particularly if you are buying an
existing business you or your accountant will
need to examine the books and accounts to
assess performance and to ensure you are
paying a fair price.
The three key areas for due diligence are:
• What is the true past performance?
• What are the prospects for the future?
• What is a fair value for the business?
The second question involves a bit of crystal ball
gazing, but your own knowledge of the sector,
your and others’ local knowledge and the past
performance trends of the shop will all contribute
to your estimate of the future potential.
Location, location, location
Famously said to be the three most important
elements of the retail mix. Whether you agree
with this or not, it is important for you to research
the right location because you could have the
best product but if no one can find you it will
remain a secret. Prime sites are more expensive
and secondary or tertiary sites attract fewer
customers, so your marketing budget will be
higher to try to attract the customers.
Once you have found your ideal site, research
it thoroughly. Count the customer traffic at
different times of the day and days of the week,
speak to neighbouring shop owners about
the area, check what future plans exist for the
area with the local authority. If you are buying
an existing shop you will still need to research
the location thoroughly but you will also have
access to the past and current accounts and
performance records of the shop.
Your next point of focus should be on the
shop itself
Look through the eyes of the customer: what
impact does the shop have from the street?
What about the interior: the amount and quality
of selling space, storage space and amenities?
How much work will be needed on the shop
front, windows and interior to convert it to your
needs and vision? Measure it out and draw up
your initial plans and drawings to see if it works
visually and practically.
Crunch the numbers!
Sorry, but it has to be done. You will need to
budget for any conversion costs (i.e. alterations,
decoration etc), equipment, fixtures and fittings,
display window and shelving, signage, stock and
contingency to name just the obvious ones. Also,
budget for monthly overhead costs such as rent
and rates, light and heat, marketing, staffing and
your own wages etc.
An important cost element will of course be
opening stock and a buying budget for regular
purchases based on sales projections.
Estimates of sales will be a lot less precise, but