There are a lot of challenges entrepreneurs face in having a retail and eCommerce business. We’ve discussed competing against big retailers and their big box stores by using technology, social media, and a good marketing strategy. We’ve talked about the lack of resources and where you can find those resources, such as finding similar businesses to mastermind with and get your questions answered.
But did you know that paying for all of your startup costs is a big challenge too? It can be pretty expensive to buy inventory for your quilt store. It’s not uncommon to cost hundreds of thousands of dollars to start up a quilting business.
Start-up costs can be pricey
Square did a survey a few years ago and found that nearly half of the respondents said they went over budget on their startup costs. That is a scarily high number! Once they got the store running, they are worried about their cash flow and keeping the store open. They worry about how to pay themselves, their employees, and how to pay off that debt.
We all know that if you don’t have the cash to buy new products for your store, that creates a big problem for store owners.
So how do you come up with the money to continue building your store?
You need a plan
To grow your quilt shop, you must have a very detailed marketing plan. You need to use that as your stepping stone to get you from where you’re at now to where you want to be.
Take some time to research your target market. Where do they hang out? What advertising do they respond to most? What will your advertising costs be? Sometimes a simple Google search will tell you this information, but sometimes you have to take a leap of faith to acquire the data.
Will you be using your own money for the store? Or do you need to find other creative ways to raise the required capital? Keep in mind that most business owners use some of their own money to invest in their business to grow.
If you are using your own money, that needs to go right into the operating expenses of your business. The money from investments or debt/loans should be used to build and grow the operations. SBA loans and other government loans could be available for women and minority owned businesses too.
Offer presales on fabric and kits
It’s important to remember that when you start a quilt shop, you’ve got to buy inventory, which costs quite a bit of money. If you have an online store, it’s a bit less of an investment because you don’t have to house all the inventory like a brick-and-mortar store.
One of my favorite ways to grow a quilt shop is to offer preorders of fabrics. You can display the sampler pack of the fabric and then take pre-orders to determine the demand for each of the materials.
You could also use several fabric samples and put together a special kit that is only sold in your store and offer pre-orders on the kit. You would want to have an example of the finished product using the kit. It could also include a tutorial video of how to put together the kit. You set the expectation that the kit will ship in 3-4 weeks.
This way, you aren’t taking on the financial risk if there isn’t any interest in the fabric or kits.
My biggest recommendation when starting a quilt shop is don’t borrow money. But if you do need to borrow to make your dreams a reality, make sure you have a detailed marketing plan - with actual money allocations in it - before you do.
If you need help determining what that budget should be or a detailed launch plan, I can help! I help quilt shops (my own included!) to grow their businesses by providing insight into expenses and financial expectations for their shop.