Hi,
I'll offer my answer to you on your 3 questions and then follow with some important advice that I'm sure you are aware of but that needs to be emphasized.
First your questions:
1) Without credit or collateral to get debt based funding ( a loan) , the only avenue you may have is to try to raise capital by selling equity. The only way you have a shot at attracting investors is to have a solid business plan and compelling opportunity. Once you have your plan pulled together please feel free to contact me and I can give you some further guidance on how (the right way) to perform your search for investors.
2) A retail clothing business is pretty tough to start up and survive. You have a lot of competition that is usually larger, with more marketing muscle and far better capitalized so unless you have some very well-defined niche that you have some sort of edge or competitive advantage in ... then you might want to re-think the type of business you want to start. What you mentioned may have great appeal to you but if you can't sell your products (profitably), or find niche products to sell that aren't already available to your market, then you will not survive in business. To find inventory for a niche like high-fashion or vintage wear you may want to get into a routine of checking estate sales or even yard sales for clothing that falls into those categories ... or even run an inexpensive ad that you "buy" clothing items of that type. There are probably other ways as well if you talk to people and give this further thought or investigation.
3) Look at existing, similar businesses. If you are planning a retail clothing store, for example, spend some time looking at existing retail store businesses. Park across the street and count the customers that go into the store. Note how long they stay inside, and how many come out with bags that look like purchases. Browse the store and look at prices. Look at several stores, including the discount stores and department stores. Find a similar business far enough away that you won't compete. For the retail store example, you would identify stores in similar towns in other states. Call the owner, explain your purpose truthfully, and ask about the business. Scan local newspapers for people selling a similar business. Contact the broker and ask for as much information as possible. If you are thinking of creating a retail clothing store and you find one for sale, you should consider yourself a prospective buyer. Maybe buying the existing store is the best thing. Even if you don't buy, the information you gain will be very valuable. Why is the owner selling? Is there something wrong with the business? You can probably get detailed financial information. If you are planning an online business, websites and hosting are relatively inexpensive these days. You can probably get one set up and hosted for several hundred dollars. An online business model is probably a better way to go to test your market. Much better to see if you can sell your product that way before you go to the expense of a bricks and mortar retail store.
They are not definitive, but I hope you find the above useful in answering your questions. Now if you have not done it yet the best starting point for you is to get what you want to do down on paper. Developing your business plan helps you to make your dream a reality; but only if you work at it to do the things necessary to reach your goal. A good business plan is something that funding sources and/or prospective investors are going to want to see so that should be your priority at this point. In general, at their simplest, Business Plans should consist of the following:
- Executive Summary
- Market Opportunity
- Vision, Mission, & Objectives
- Management
- Business Strategy
- Competition
- Risk
- Financial Plan/Capital Requirements
- Summary
How complex and comprehensive your plan should be depends on what you plan to use it for. This generally falls into 3 categories:
1. Internal Planning (to form the business)
2. Internal Planning and presentation to close contacts that might want to invest in the business.
3. Internal Planning, close contacts presentation and presentation to experienced investors and/or sources of funding for the business.
Business plans can range from 10 pages to 50+. Simpler business plans (really more of an extended Executive Summary) are usually 10 pages or so and would primarily be used for internal planning purposes. These type plans are less complex. Plans for presentation to personal funding sources or investor-ready business plans designed for professional investor presentation are longer and much more comprehensive (they have to be to cover all of the aspects of your business that an investor or funding source is going to want to know about).
There are a number of resources you can find online (some free, some not) that can help you with your business plan. Just enter "help with business plan" or "business plan" in any search engine and you will find many sources to check out. One site that you might find useful is:
http://www.sba.gov/smallbusinessplanner/index.html
Also, you can search within this online community for "business plan" "start-up" etc. and find many postings, some from experienced business professionals, that might be useful to you as well.
I hope the above helps; good luck with your business plans.
Dennis Lowery
Adducent, Inc.
