Where to start??

[Ihaveadream]

As my name says I have a dream. Sorry this is going to be a long one!
I would love, love, love to run my own shop selling baby/childrens wear, gifts etc.

I am a mum of two, and my husband has a reasonably paid job which os secure. I currently work part time in the NHS and am fed up and have been for sometime. This is a dream I keep coming back to and have done for years.

I am beginning to think if I want to do this I should do it soon. It would mean completely starting over again. It would mean selling our house, renting and either buying a shop or setting one up. Me and my partner hate the area we live in a would love to move anyway.

This is where my confusion starts... Which is the easiest/cheapest/best way to do this buy an existing shop or set one up myself. It confuses me how you secure buying shop. For instance I have seen a shop that I would love in an small market town that I love which would be a great place to bring up the kids. However to go forward with this I need to know how much it makes - agent says that need to view before they can pass this info on. Well theres no point in going to view, if its not making much??? Also would a shop owner be willing to hold on until we sold the house to fund the project? OR would we be better off setting up a shop, again I have seen an empty shop that is well placed not sure of rent tho. What worrys me doing this is the gap from starting up and making money. It would be fine if it was just us but when the kids are involved I don't want them to suffer.
As you can probably tell my mind is racing with all this and I desperately want to change our families lives. Sorry for this being so long

 

[DeanCo]

Have you considered forming a limited company? You could obtain funding from a bank through your company to purchase suitable shop premises with no or little risk to your house.

 

[kulture]

Indeed it is difficult to know where to start. Especially in this difficult climate. A friend of mine does 2nd hand clothes, including childrens and baby. She basically acts as an Agency. People bring in their used clothes, and if she accepts them (and she is very fussy) then she puts them up for sale. If sold there is a 60 40 split between shop and the person who bought them in. She does very well, and she says that she cannot keep up with small children and baby clothes. Another friend selling new baby clothes, up market at an average price point of 20-30 pounds is closing down. Not enough business.

Regarding premises. If you can find an established shop, selling what you want to sell, and up on the market, then you will not only be lucky, you will also know what kind of money it makes.

Most of us start up from scratch. In market towns it is nice to live in them, above or behind the shop. It gives you just one place to rent/own rather than two. It is easier to get involved in the community and build up business. The trouble is when people say that moving house is the most stressful experience, then they have not opened a new shop from scratch! Whatever you do, do not do both at the same time. If your aim is to have a shop with accommodation, then move in to a temporary let first and then set up the shop and then move into the shop's accommodation. If you have to do it all at once, then good luck, and ship the kids onto the grandparents!

 

Have you considered forming a limited company? You could obtain funding from a bank through your company to purchase suitable shop premises with no or little risk to your house.

I'm not sure of the relevance of a limited company, as all borrowings would have to be supported by PGs (and lenders would require a significant deposit)

My personal view is that you should look to lease premises in the short term until you are comfirtable with your business. Commmercial premises aren't like residential, they don't change hands nearly as easily.

 

[Ihaveadream]

When I have spoken to the bank previously (about year and a half ago) they said in theory they would lend but only against the house and if we could put in the same amount that they lent us. The other problem is that me and my husband had got ourselves into a bit of trouble with credit cards etc and are now on a debt management plan with the CCCS - will this hold us back if we apply for a business account or loan? Also concerned we wouldn't pass a credit check for renting a house!
The ideal would be to look at this business I want, see if its doing ok, put the house on the market sell it and use the money in the house to buy the business, and rent somewhere for us to live in. Might need a loan to buy the stock? Can you borrow against the business? Questions, Questions! Thanks for replies so far

 

Aploogies, I misunderstood your post - you are looking to buy a business rather than a freehold?

To be honest, if you are on debt management you will struggle to get any type of bank funding (current account shouldn't be a problem). I can't comment on rental I'm afraid.

You need capital for stock and for working capital, as it is unlikely that you will cover your costs from day 1; you need to budget your equity /purchase on this basis.

My suggestion would be to sell your home & rent thus putting yourslf in the position of cash buyer. In the meantime start seriously looking so tjhat you have a better feel for the market.

 

[Ihaveadream]

Looks like it will remain just a dream then

 

[Homshaw]

Why not start on a market stall or car boot sale and see how it goes?

 

[Marta_K]

I second the option to start small - you do not sound like you had previous retail experience, apologies if that's wrong - home parties, car boot sale, than market stall would tech you a lot and vey rapidly about customer service, stock and so on. You might not even like being in retail after all - so it's no point risking your house, your husband job and your security.
On the other hand, the second hand baby items are very much in demand, so you might consider starting with that. let us know what you decided and how it went, of course.

 

[Ihaveadream]

Thanks for replies, I was a little dis-heartend when I put my last post on. I am not giving up, not sure what direction I am going to take yet but not giving up completely yet.

I do have a bit of experience if retail having worked in shops in my younger days. My husband works for a major outdoor brand and has a good understanding of retail in the clothes market, and although it would predominently be my thing my husband would be greatly involved too.

I am sick of what I do at the minute and cos of the area I work in I feel life is too short to spend most of it doing something you don't enjoy/like.

 

[garlex]

Why not start on a market stall or car boot sale and see how it goes?

This seems to be to be the best suggestion of all for you. There must indeed be a market near by the dream town you want to live in. Even if its a long way from where you live and means it will be tiring it will establish a number of key answers to your questions.

You can use the opportunity to source suppliers, work out margins and costs and perhaps most importantly carry out some market research when you're there, if there are two of you, one can look after the stall for the most part whilst conducting a survey in and around the market and elsewhere in the town.

Also, if you do manage to build a business on the back of this you will have some history which will be looked at most favourably by potential lenders.

Good luck with your 'dream'

 

[chiggs]

Why not start on a market stall or car boot sale and see how it goes?

This seems to me to be the trend in the nursery sector- I've been supplying baby products for over 5 years, and 4 or 5 years ago the startups I supplied were mainly starting up bricks and mortar shops, 2 or 3 years ago it was mainly online startups, and recently it's market stalls! A really good way to get used to the business without a huge commitment & investment, build up suppliers, find out what customers want and build up a local reputation, as others have said.

 

[Ihaveadream]

I think starting smaller would be probably more sensible, but don't think the suppliers I am looking at would be keen on supplying a market stall - I was wanting quite up market brands. Maybe a website may be more achievable? Then mayhe that cold lead onto a shop.

 

[Marta_K]

Setting up a website is the relatively easy part (well, for me anyway, as that's what I do), it's driving the customers and conversion to sales that's tricky.
With market stall you at least have a passing by traffic, with a no brand website (as you are just starting out) getting yourself established can take time.
On the plus side, It is considerably cheaper than setting up the real shop, but most people do not realize it still requires a lot of effort at the beginning.
I am not trying to discourage you, far from that, just so you know that with

ecommerce​

websites as with brick and

mortar​

shops it's no longer a case of 'build it and they'll come'. Either way, it's no longer practical to have a shop without website, anyway.
From your comments, I think you have this idea about running classy kid boutique - but as with any relatively expensive staff, you need a unique idea and good clientele - so the location you would choose is critical.
How do you see yourself differentiate from existing shops? what would draw customers to you?

 

[Ihaveadream]

I understand that there is a still a lot of work to do in setting up and running an ecommerce website, I suppose that its just a funding issue and a on line shop would be cheaper and less of a risk.

I have seen a empty unit in the village/small town where we live - this is a relatively affluent place, quite a lot of money, kids and mummys! In regard to being different to competition, we live very near to the Metro Centre and Newastle upon Tyne, but everyting is much of a muchness if you know what I mean. When a friend has a baby or you want a special gift there is no where you can get something a bit different.

Won't be doing much until next feb when we will have some money, but mean while need to get a better idea of what i want to do and start planning.
Thanks for your help

 

[seo888]

I understand that there is a still a lot of work to do in setting up and running an ecommerce website, I suppose that its just a funding issue and a on line shop would be cheaper and less of a risk.

I have seen a empty unit in the village/small town where we live - this is a relatively affluent place, quite a lot of money, kids and mummys! In regard to being different to competition, we live very near to the Metro Centre and Newastle upon Tyne, but everyting is much of a muchness if you know what I mean. When a friend has a baby or you want a special gift there is no where you can get something a bit different.

Won't be doing much until next feb when we will have some money, but mean while need to get a better idea of what i want to do and start planning.
Thanks for your help

Hi Ihaveadream,

I must of missed this thread.

Anyway, I am actually looking to do something similar although i am looking at more good quality second kids clothes. I have also wanted to do something like this for years, although it was more second hand stuff in general I now think kids clothes are the best way to go because VAT free!

Anyway, I used to live in Shields but I have lived in Cambodia for the last 8 years. I am moving back to the UK next year with my wife and 3 kids. I am not sure if the North-East is the place I want to be though and looking at other areas.

Back to your business, you need to think it through very carefully. Your business idea sounds VERY high risk. First of all do NOT buy a business premises, you only need to lease. Learn about contracts in and out so you know what you are signing. You must keep costs down to start with so I would suggest looking into "sale or return" items if possible to keep you stock cost down when you are starting out.

I know quite a bit about websites, this is not easy even when you have experience so would not recommend selling online as you competing against Ebay and Craigslist. Market stalls are a idea or house parties which are mentioned above. House parties will depend a lot on your network of friends with kids, what kind of incomes are they on to what they can afford to buy. I actually think house parties will be one of the best ways to do this business and it is on the top of my list on the ways to sell. I am actually looking at many different ways to sell not just one way.

I have been doing businesses in Cambodia for 8 years, I am keep been told the UK is really bad now and very hard to do business. I simply can not believe that doing business in Cambodia is easier than doing business in the UK and most of my businesses have been pretty successful.

Do your research, there are loads of websites that can help you with info including this one. Check the different topics about premises, legal stuff and all the other helpful topics. You need to be confidence and have a lot of drive to succeed in business. It is not easy but start small and with low risk. Do NOT sell your house to fund a project, better to start small.

Where do you live near the Metro centre?

 

[tICG]

If a Bricks-and-Mortar premises is out of the question perhaps an online store would suit, especially as you are retailing rather than having clients come to you (like in services such as hairdresser or butcher).

You would need a good website and have someone employed to keep it up to date and operating but compare that to the costs of a bricks-and-mortar premises it stacks up pretty well.

I would choose that as a first option for the following reasons (this list is by no means exhaustive):

1 – No geographical limitations. You aren’t just selling to people in your local street or neighbourhood you are potentially selling to anyone in the world with internet access.

2 – Open 24/7. While you sleep your shop doesn’t. When the UK is asleep the USA and Australia are in full shopping mode. There’s nothing nicer or rewarding than waking up to a full inbox of orders before your first coffee of the day

3 – No rent for premises (unless you need somewhere to hold your stock).

4 – You can start as small as you like and expand as the market dictates with much less risk

5 – Usually cheap and easy to run from home in the early days, check out all you local authority/landlord/insurance requirements.

6 - You could run it part time until it takes off with a lot less investment.

7 – Run it alongside an Ebay shop until your own site has a good stream of customers (Ebay has millions of customers ready to go from day 1).

There are a ton more but you get the picture and might inspire you.

There are of course some down-sides but I think this opportunity is one of the joys of living in today’s internet world.

 

[Homshaw]

Having your own website is great if you know how to write it and market it.

Otherwise it can still cost a fair amount of money and the task of getting people to look at and buy from your site in a very competitive market where you have no identifiable competitive advantage is a difficult task.

Ebay or Amazon can be good but you need to research what is on there already, what they are charging, what your ebay and paypall fees would be, what other costs are involved, what you can buy them for etc

Bricks and mortar for an unproven concept is great if you can afford to lose the money if it goes wrong and if it does work it can be lucrative. But for me it would be too risky. One thing most small retailers will tell you is that what people buy defies common sense - only first hand experience works - and donn't fall into the trap of thinking because you like something everyone else will or you will be left with lots of unsold stock

If your husband sells outdoor clothes is that not a better option

 

[Working Partners]

Have you thought of talking to a business coach to help clarify your goals and decide on the actions you will take to get your business going.

 

[Pap_sak]

Ihaveadream - you best bet is starting with an online shop....If you guys already have personal debt problems there is no chance that banks will cough up any cash to start your dream shop.

 

[Page]

When I have spoken to the bank previously (about year and a half ago) they said in theory they would lend but only against the house and if we could put in the same amount that they lent us. The other problem is that me and my husband had got ourselves into a bit of trouble with credit cards etc and are now on a debt management plan with the CCCS - will this hold us back if we apply for a business account or loan? Also concerned we wouldn't pass a credit check for renting a house!
The ideal would be to look at this business I want, see if its doing ok, put the house on the market sell it and use the money in the house to buy the business, and rent somewhere for us to live in. Might need a loan to buy the stock? Can you borrow against the business? Questions, Questions! Thanks for replies so far

Overall it sounds as if you have no financial control and no business experience and knowledge

You need to remember that running a business is about making a profit sufficient for the effort and risks taken

Buying some stock and taking on a shop lease - well anyone who can get their hands on some money can do this and open their dream little shop or business

The making it pay as a business is when things change

Plenty have dreams of having little shops selling nice things and away goes their retirement money - inheritance - years or saving or whatever - and the misery of the fallout is intense.
(it usually goes with having a nice little house in a nice little town as well)

I think you need a serious reality check - for your own good

We are now in a very tough retail environment which is liable to last a few years

We were already in a changing retail environment with independent retail outlets dying in swathes with sales moving to larger businesses and to online which is also rapidly meaning larger businesses

So if you really want to do it then realise that the first thing is financial sense and planning
(Guessing; but this for you right now would probably mean clearing very high interest rate cc debts by remortaging the house - that in its self might be worth a few thousand pounds of "income" or if you prefer "not outgoing".)

Start working on a documented - NOT airy fairy in your head dreams -business plan and get some outside help and support. Expect to spend a lot of time working on this and getting yourself an education on business generally. It is doing things like this that allows businesses to succeed and develop and grow and survive upsets and tough times etc.

Then review and then maybe do some more planning or go ahead as per plan

That all said I suspect you would rather dream and not do the serious part of thinking and planning of running a business. In which case only go as far as the dreaming or you will lose all the £££ you have.

And hey there is nothing wrong with dreaming but plenty wrong with chucking your money away because you have only done that

 

[Homshaw]

Overall it sounds as if you have no financial control and no business experience and knowledge

You need to remember that running a business is about making a profit sufficient for the effort and risks taken

Buying some stock and taking on a shop lease - well anyone who can get their hands on some money can do this and open their dream little shop or business

The making it pay as a business is when things change

Plenty have dreams of having little shops selling nice things and away goes their retirement money - inheritance - years or saving or whatever - and the misery of the fallout is intense.
(it usually goes with having a nice little house in a nice little town as well)

I think you need a serious reality check - for your own good

We are now in a very tough retail environment which is liable to last a few years

We were already in a changing retail environment with independent retail outlets dying in swathes with sales moving to larger businesses and to online which is also rapidly meaning larger businesses

So if you really want to do it then realise that the first thing is financial sense and planning
(Guessing; but this for you right now would probably mean clearing very high interest rate cc debts by remortaging the house - that in its self might be worth a few thousand pounds of "income" or if you prefer "not outgoing".)

Start working on a documented - NOT airy fairy in your head dreams -business plan and get some outside help and support. Expect to spend a lot of time working on this and getting yourself an education on business generally. It is doing things like this that allows businesses to succeed and develop and grow and survive upsets and tough times etc.

Then review and then maybe do some more planning or go ahead as per plan

That all said I suspect you would rather dream and not do the serious part of thinking and planning of running a business. In which case only go as far as the dreaming or you will lose all the £££ you have.

And hey there is nothing wrong with dreaming but plenty wrong with chucking your money away because you have only done that

I'm afraid I agree.

Unless it involves a small amount of initial investment which you can afford to lose, no long term financial commitment and an easy way out I think you will end up in trouble.

The comments above are harsh but true. Don't have to look too far to see people queueing up to take money off vunerable new businesses.