Developing a business plan for consignment store? Consignment stores profit from a simple business model: the use of a retail space to enable individuals who don't have an easy way to market their goods to present to a broad audience. The most common types of consignment stores are those specializing in clothing, furniture, and antiques, though the model can be applied to collectibles, sporting cards, CDs, and a range of other items. Unlike online marketplaces like eBay or Amazon, goods put up for sale stay in the local community, and unlike at a pawn shop, they are displayed for the express purpose of making a sale. Virtually every city in the U.S. has some type of consignment-based retail store, though often the term "consignment" is not applied. Antique malls, for example, typically present goods on consignment, but they do not market themselves as consignment stores. So, for your business plan, one critical introductory question is how do you conceive of your business? How will you brand it, market it to potential suppliers, etc.? Of course the business plan begs other questions as well:
1) How quickly do you expect to break-even? What sort of funding do you seek; a bank loan, or an investor taking an equity stake? If the latter, what payback or ownership scenario do you envision?
2) What does the regional economy look like? Current stats from the U.S. Census Bureau and industry journals should support your point that this venture will succeed.
3) What does the competitive landscape appear to be? You will need to delineate between other consignment shops offering the same wares and retail stores that offer new goods.
4) Which marketing strategies are likely to work best for your business, and what budget do you allot for these campaigns?
5) What do your personnel needs look like for Year 1? Year 3?
A consignment store business plan does need a complete financial model including revenue projections, expenses, a balance sheet and P&L statements, and preferably a sensitivity analysis, B/E point, and monthly breakdown for Year 1 post-funding. If you need help developing this pro forma or have specific market research questions, or just want more information about the plan development process, MasterPlans can help. Since 2002 we have been writing business plans for entrepreneurs who prefer to focus on other business-building tasks. Contact us today at 877-453-2011 to discuss your business planning needs.
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