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2 Replies Last post: Mar 17, 2009 6:06 PM by MyBusCanHelp

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Luckiest or others with advice...business plan questions

Mar 17, 2009 12:32 PM

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kalyku 4 posts since
Mar 14, 2009

Hi all! I posted a few days ago about dreams of opening a kids' consignment shop. Since then, I have been doing more research and have a meeting set up with our local SCORE office next week. I went on the SCORE website and downloaded the getting started packet, which is WONDERFUL by the way. Some of the questions when it comes to feasibility though have to do with investigating similar businesses in the area, their profits, etc. My question is, where can I find out this information? Is it available to the public? Also- when looking at the different types of businesses, it looks like we'll probably go with either a sole proprietorship or a joint partnership (myself & my husband). Can we do a sole proprietorship if the business is in both my husband's and my names or must we do a joint partnership? A couple more questions- I have a bankruptcy on my credit about 6 years ago before I married my husband. My credit has been good since then and my husband's credit is excellent. However, I don't know if maybe we should put the business in my husband's name only since I do have the bankruptcy on my credit record.

Finally- we are looking at the possibility of borrowing from one of my husband's 401K's (not the one he has with his current employer), but by the time we pay penalties, etc. we are only looking at about $15,000 cash. Do you think it's even possible to get started with this kind of cash? We would rather avoid having to get a loan if at all possible.

I'm sure by the time we have our appointment with the SCORE counselor next week, I'll have a million more questions, but just wondering if anyone has any advice on the above. Thanks in advance!

Kari

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kalyku 4 posts since
Mar 14, 2009

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1. Re: Luckiest or others with advice...business plan questions Mar 17, 2009 5:01 PM

I didn't mean to offend anyone by asking for a specific person, so I'm sorry if I did. I just thought since "luckiest" had replied to my other thread, he may have some more advice concerning some of the new questions I had. If anyone might be willing to help or give advice on the questions I posted at the top of this thread, I would really appreciate it. This forum is wonderful and I truly appreciate the help and advice that I have been given so far. If you need more information before offering advice, here is my post from last week in regards to the consignement business I hope to get started:

Hi all! My name is Kari and I have been thinking for years now of starting a children's consignment shop- although I don't want to limit to only kids- would also like to carry juniors, maternity, possibly young mens as well. My husband and I are both college educated people and both have full time jobs and 3 kids. I work in the school system and am off in the summer, so am thinking now would be the perfect time to look at getting something started. I've come to the conclusion that you don't get anywhere by SAYING you want to do something, but by actually taking the risk and DOING it! I live in a town of about 35,000 and we currently have 1 consignment shop that caters to kids and has recently expanded to include another store that caters to teens. It is very successful and I have been a customer there for a long time. We also have several thrift shops in town that I hear are doing very well. I'm thinking, in this economy, they are thriving because everyone is out for a bargain- and when it comes to kids' clothes, baby items, toys, etc.- they outgrow them so quickly! I don't believe it would be feasible to open another shop in my town since the ones that are here have already kind of cornered the market. People come from many of the surrounding smaller towns to shop here. The next biggest cities are over 45 mts. away and I really wouldn't want the commute if I didn't have to. However, there is a town about 15 miles away with a population of about 10,000 that looks to me like it is experiencing some growth- they just opened up a new dollar store (there are now 2), a new KFC and Taco Bell, as well as some other businesses. There is one larger grocery store and a couple of smaller ones and only one large Department store, which happens to be a Shopko. To my knowledge, there are no consignment shops or thrift stores in the whole town. Therefore, if people don't want to shop at the dollar stores or Shopko for childrens clothes, items, etc.- they must drive to my town (about 20 mts.) to shop for these things. There are also lots of rural communities surrounding this town and another bigger town about 25-30 miles in the other direction. My husband and I took a drive around and there are several possibilities for storefronts in high-traffic areas that are vacant- a brand new little shopping center right next to the Shopko as well as several vacant storefronts in the downtown area.

What I need to know is where do I go from here? Where to start? We don't really have anything much in savings- we do have 401K's we could borrow from and would probably qualify for a loan (decent credit, etc.), but don't even know where to begin. A franchise seems attractive because there is so much help available in starting up. However, I kind of shy away from a franchise because then you have to follow their guidelines, share the profits, etc. I do feel like I am pretty knowledgeable when it comes to this type of business just because I have been a loyal shopper at them for years and seek them out whenever I visit other places. I know what items sell and what to look for. I kind of have a picture in my mind of how I would want to run things, organize, keep accounts, etc. Can anyone tell me if it's even possible to start a business like this on my own without any capital (other than if we decide to cash in on one of the 401K's)? Also- I'm thinking if we do get this started I should maybe keep my full-time job for a year or two to make sure that it goes well and just hire part time help, rather than just up and quitting my job. Do I need a business plan/marketing strategy/feasibility study? If so, how do I go about doing these things?

+Any help, tips, ideas, and suggestions would be truly appreciated+!

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MyBusCanHelp 9 posts since
Jan 30, 2009

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2. Re: Luckiest or others with advice...business plan questions Mar 17, 2009 6:06 PM

1. The IRS considers your business to be a sole proprietorship only if one of you is the
owner. If both of you are considered owners you must set your business up as
a partnership.

2. Don't know what your Credit Report has on it ? Don't guess the federal government
says that you can get a free annual report from each credit reporting agency once a
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choose one today.

3. I would go with the person who has the best credit .

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Best Regards,
MyBusCanHelp

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