Start your own business with a shoe store
Whether out of unemployment or a less than satisfactory employment relationship: For many, the option of self-employment is an opportunity to finally enjoy more self-determination and freedom of choice. Who himself has a passion for shoes or in-depth knowledge gained in this industry can be successful with a shoe store become self-employed. After all, everyone owns several pairs of shoes, and women, in particular, should have a particularly strong buying mood.
This is how it becomes a successful shoe! What start-ups can read here
The shoe retail trade generates tens of billions every year and, depending on the season, there is always a strong demand for current models. For a ‘good run’ or a ‘shoe that doesn’t pinch’ it is advisable to turn the idea of ’self-employed with a shoe shop’ into a solid and resilient (business) plan! All business areas and in particular the finances that are critical to success must be planned holistically. With this in mind, this technical article would like to compactly discuss all relevant topics that are of entrepreneurial importance for prospective start-ups in connection with the opening of a shoe store:
Assess the starting point honestly: the competition in the retail
- Positioning including analysis
- Target group and corresponding range orientation
- formal requirements in the run-up to business opening
- Notes on possible strategic fundamental decisions
Is one size too big? The retail sector is characterized by intense competition
In general, it can be stated as a central environmental variable that the retail sector is characterized by intense competition. In addition, the virtual competition from online trading is large or always available. And this often at prices that brick and mortar retailers cannot keep up with, since specialist staff for customer advice must logically be factored into the prices. In this respect, it is important to set the course for lasting success with the planning of the shoe shop.
Who should wear these shoes?
It is important to analyze the environment and the competitive situation precisely and accordingly to strategically position your own offer as effectively as possible. Ideally, this is done with a unique selling point that from a customer perspective is particularly attractive (= unique selling proposition). This unique feature should especially in business plan significantly, which is carefully worked out in advance of the actual business opening. The following paragraphs provide some content / focal points to which a convincing business plan must be able to provide answers if external donors are to be found.
The basic requirement for success in retail?
Anyone who wants to successfully set up their own business with a shoe store should be a good salesperson and guide any staff in the right direction. The mentioned unique selling points or added value from the customer’s point of view include a high degree of friendliness and service orientation, which always requires a certain degree of flexibility.
The aim should be to turn customers into regular customers and thus to put their own business on a sustainable basis in the long term. Being a good seller (by the way, this also refers to the sales-promoting presentation of the goods) is not enough on its own: you also need sound commercial or business knowledge to be able to run your own business in a profit-oriented manner from the start. Well-founded financial planning is very important, including constant cost control. The price strategy and the possible profit margins play an essential role in achieving the desired profits.
Contents of the business plan: target group, range of offers, and sales channels
Ultimately, it must be clear before the actual sales start where the shoes are to come from and under what conditions. A good sense of trends is essential to ensure that no slow-moving items are bought. And ultimately, the owner of a shoe store needs to know his target group very well in order to be able to select goods that are appropriate in terms of quality and design. From the target group and the range of offerings based on it, the already mentioned unique selling points or added value from the customer’s point of view can result. So it would be conceivable to concentrate on designer shoes from a certain label or from a certain country.
It could also make sense to concentrate only on sports shoes or oversize or particularly small sizes (possibly only children’s shoes). For the retail sector, selling in a shop is still the most common option, as this also ensures personal and, above all, professional advice (= important added value for many customers). However, this involves high monthly fixed costs and initial investments if the premises have to be converted before the establishment. Therefore, it can also be a fundamental strategic alternative to ‘only’ open an online shop or to choose a combined solution so that the shoes can be bought from the shop throughout the country.
So that it ‘runs’: Determination of the position with a meaningful analysis
If founders decide on a shop, it should be in a good location. A good location is when the business automatically attracts a lot of walk-in customers. A shop in a busy downtown shopping street is ideal. On a side street in the second or third row, it can be difficult to attract enough customers every day. In this respect, it can be a good location to justify higher monthly fixed costs. When analyzing the location, the competitive situation should of course be taken into account: Are there similar shoe stores in the immediate vicinity? Or does your own product range find a gap that is met with unsatisfied local demand? In a pure online shop, these questions are of secondary importance. It is more about placing your own shop as high as possible with search engine optimization measures. Attractive shoes at good prices are then the most important prerequisites for being able to keep up with the great competition in the online area.
Financing beyond equity and necessary investments in the start-up phase
The initial investment costs can be very high depending on the size of the business. Experts recommend an equity base of at least 15%. The rest must be covered by grants, loans, or credits. And founders usually only get such financing options if their developed business plan sums up the opportunities of the business model. It should be noted that apart from the renovation costs, considerable sums also have to be raised for the inventory. The shelves and the warehouse also have to be filled, avoiding excessive stocks as they tie up a lot of capital.
Practical tip with a view to sustainable, solid finances: It is also advisable to set up financial reserves right at the beginning in order to be able to cover the costs for rent and any personnel. The initial business development cannot be precisely predicted. Many businesses only generate good profits after a few weeks, so that financially sensitive phases have to be survived through existing buffers.
External donors will have a very critical eye on the area of financial planning when looking at the business plan. In this respect, business success stands and falls in every respect with a professional business plan that is based on reliable/realistic figures.
All funding opportunities should be consistently exhausted
The representations of possible costs in the initial period and for ongoing business operations (rent, personnel, purchasing, etc.) suggest that founders should deal with all funding opportunities and programs in a good time.
Formalities to complete before opening a shoe store
If you want to start your own business with a shoe store, you will do so in the retail sector. In this respect, a trade must be registered before starting a business activity. It does not matter whether it is a shop or an online shop. The registration takes place with a description of the range of services at the responsible trade office. With the receipt of the business license and the obligation starts to dissipate business tax beyond the annual allowance.
This is where the already mentioned location comes into play because every city/municipality has its own assessment rate, which is decisive for the amount of trade tax. As far as the formalities relating to the opening of a shoe shop are concerned, it is important to consider compliance with the statutory opening times in the respective federal state.
The specific requirements must also be observed with regard to the provision of parking spaces and sanitary facilities (depending on the size of the shop) (this is where the trade supervisory authority comes into play). In order to protect yourself from financial risks, you should definitely take out public liability insurance.
Practical tip for reducing financial risks: Depending on the price segment or the number of shoes, separate inventory insurance can be considered, which also covers damage caused by burglary, fire, or water. Business start-ups should use independent specialist advice.
Practice-oriented summary: start your own business with a shoe store
- Location analysis, target group determination, and a corresponding range alignment are critical homework that should be done in the business plan
- The shoe retail trade is characterized by strong competition. Therefore, your own offer must be strategically positioned effectively: Where are the unique selling points and specific added value from the customer’s point of view?
- The strategic decision in principle: store vs. Online shop (or combined solution)?
- A sustainable financing strategy should make consistent use of all available funding programs and grants
- Trade must be registered before the actual business opening, as the activity is carried out permanently with the aim of making a profit. The specific legal regulations of the retail trade with regard to opening times etc. must be strictly observed
- Minimize financial risks through careful planning in the business plan and sensible insurance policies (public liability insurance and inventory insurance).