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    10 Replies Latest reply on Jan 11, 2012 10:33 AM by chris1985

    Is it time to get a store front?

    jcscott1 Wayfarer

      My wife and I have an internet based business that sells home and garden accessories as well as some other specialty seasonal items.  We are based out of our home and have been in business for over 4 years and continue to grow with more merchandise and different types of merchandise.  We promote our business via Facebook and my website and do large portions of our sales at large Junior League shows and craft shows and such, which in turn, spurs more sales to our website.  Since this is actually 'my' business, I stay at home and my wife has the 'real' job. Therefore I do the traveling on my own - loading and unloading, setting up and tearing down large booths which has hundreds of pieces of merchandise.  I do get help from my parents, inlaws and close friends.  We receive constant questions at shows and via our Facebook page, etc. regarding a storefront and we have had people come to our house to buy product - scary.  Since we have grown so large (we have no garage, dining room and have lost two bedrooms to our merchandise), we have discussed getting a truck with a ramp, which would require a loan.  If we are going to get a loan for a truck, why not get a loan for a small storefront? I have begun looking at storefronts and found a few that are within our price range, and that are in our downtown area that currently houses many small businesses - none of which has anything like I sell.  I have spoken with many of the tenants and they are very welcoming and would love to have a new tenant in the square - and to have only 3 vacancies is rather rare really.  I guess my question is should I go forth and follow my dream of having a storefront?  If so, I need to get a loan, which is where I see the problem coming up.  Since my business is SO seasonal right now - since I only do shows during peak season - Spring, Summer, Fall, and Holiday, my sales - i.e.  bank accound reflects that.  We do run a profit, but then a large part of the profit goes back into inventory.  I think I could have continued sales with a storefront and still be able to do my shows - to continue to drive the internet sales.  I don't know where to begin, I just know that we can really continue like we are now.  Advice please?

        • Re: Is it time to get a store front?
          kprescod Adventurer

          Hi jcscott1,

           

          Based on the longevity of your online business; I do think its time to start a storefront. Regardless of the fact that my expertise is in computers, but in the spirit of good business; I believe its time. Growth will come fast because you've already taken the steps needed to promote your business virtually; so having the physical location would be an advantage to customers. They could order online, and pick up in store, and cut your shipping expenses by 50%; which increases your profits substantially. 

          1 of 1 people found this helpful
            • Re: Is it time to get a store front?
              jcscott1 Wayfarer

              Thank you for the response.  I do have local internet sales and it would be nice to offer them a place to pick up the merchandise instead of 'meeting them halfway', like I do now.  Also, having an actual store would give opportunity for add on sales since what is on the website is not all that I have to offer.

            • Re: Is it time to get a store front?
              chris1985 Tracker

              It sounds like a good idea to get a store front. I work in a National SBA department at a bank that helps get financing for small businesses and we see this type of situation a lot. How much are you thinking your going to borrow? You would have to show whatever lender you go to a steady enough cash flow to make regular payments. Also, the details of the lease would be something the bank would probably want to know as well as a few other things.

                • Re: Is it time to get a store front?
                  jcscott1 Wayfarer

                  Working on financing seems to be the hardest part for me right now.  I will be renting the space and want to finance 1 year of rent plus some 'cushion' money for signage and lighting that I know the store front needs, as well as any painting, repairs, etc that may come up.  The space I want to lease rents for $2000 per month and I would like to finance $30,000.  However, I would finance as little as the actual $24,000 or upto $27,000.  The problem that I know I would face is that since my current business is seasonal - meaning I do 6-8 large Jr League and Craft Shows as well as some smaller school shows that I am popular at.  Therefore I cannot provide a consistant MONTHLY income.  I can provide specific quarterly income based on the shows and the fact that the internet sales spike after shows and then dwindle then spike again during specific holidays I do not show at (4th of July for example).  Sales for the business is well above the $30,000 I would be requesting, but it is not consistant per month.  That is where I think a store front would be so beneficial for me.  I have so many people requesting to come to my store front and coming to my house, etc.  I just think the time is right (my customers think it is and the other posters do too), I just need the funding to help make it happen.  If you could guide me in the right direction, it would be much appreciated!

                • Re: Is it time to get a store front?
                  Sophia_Myles Tracker

                  I think it is the time for you to move one more step to the sotrefront. You've been in the industry for long enough and have built a great reputation among your customers, which may save you a lot in advertising & marketing later.

                  1 of 1 people found this helpful
                  • Re: Is it time to get a store front?
                    Ranger

                    Hi John! Did you get any helpful ideas from the community? Let us know !

                     

                    Joleen

                    • Re: Is it time to get a store front?
                      Hudacko Enterprises Adventurer

                      Hi John,

                       

                      I'm a little confused about the decision you have apparently made about taking a loan for a storefront. If that statement means that you are going to "Buy a storefront" that would beg the question; Have you considered renting one first? A rental would give you an opportunity to measure the additional revenue that walkin traffic may, or may not, bring to the storefront; keep your Capital where it belongs (in the bank); and give you a less costly Exit Strategy, especially if you negotiate a month-to-month lease. You mentioned that there a several storefronts available. How long have they been empty? The longer they are empty, the more flexible the building owner might be in setting up a rental arrangement. If memory serves me correctly, rental space would also be less expensive to insure than if you owned the building!

                       

                      As you are a seasonal business, you now have the opportunity to do more research on the rental possibilities before the selling season kicks-in full swing.

                       

                      Hope this helps you in your decision process! Sometimes we have to think way outside the box so that we can see the whole thing!

                       

                      Tom

                        • Re: Is it time to get a store front?
                          jcscott1 Wayfarer

                          Sorry about the confusion, but I would be renting a space and not buying it.  My idea is that I would be taking out a loan (that is if I could find someone to lend to me), for the full amount of a years rent, in this case $24,000. (I am actually wanting a slightly larger loan to cover any addional expences I know that I need - i.e. signage and lighting and some for any repairs down the road).  That money would sit in an account to gain what interest it can, and hopefully, I could cover my monthly expenses through walk in traffic, internet traffic and my road shows, and only have to dip into the loan money on emergency basis.  This would be the trial to see if the business is actually viable. 

                           

                          And thank you for the hints on how long the spaces have been empty - that may work to an advantage.  I appreciate your comments!