RadicalDudeJOM From United States of America, joined Jul 2011, 57 posts, RR: 0 Posted (2 years 5 months 2 weeks 3 days 22 hours ago) and read 785 times:
A friend and I are thinking of starting a small clothing retail business here in San Francisco and I thought I would turn here for a little help and advice if anyone knows a bit about it. Specifically the steps that you take to get it off the ground. Should we apply for a business license before finding a place to rent or the opposite. Funding isn't a real issue, so we don't need a loan or anything. Has anyone had any experience with this sort of thing?
Sometimes, your cards aren't worth a dime, if you don't lay them down.
go3team From United States of America, joined Mar 2004, 3267 posts, RR: 16
Reply 1, posted (2 years 5 months 2 weeks 3 days 14 hours ago) and read 706 times:
You would want to find a place first. When applying for a business license here, they need to know where it will be operating, and what type of business will be operating out of that location for zoning reasons. If you do it the other way around and find out that you can't operate there due to zoning issues, that could create a problem. When looking for a place, see if you can find out how long the other businesses in that location have been there. What some people might think is a good location, is usually not. Lots of businesses in this area fail for that reason alone. Location matters.
Ken777 From United States of America, joined Mar 2004, 8299 posts, RR: 8
Reply 2, posted (2 years 5 months 2 weeks 2 days 22 hours ago) and read 639 times:
The first recommendation I would make is to really understand Open To Buy. How to calculate it, how to update the OTB before making noticeable purchases, and how to use it to understand the margins from various types of purchases.
Secondly, I believe it is important to understand merchandise planning in general. Basics, like socks and underwear, are best managed using a stock level budget. You establish your inventory levels by product class, then by style, color and size. Buy in your initial inventory, then monitor it and adjust the base levels up or down at least monthly. Orders for this class of merchandise should not be controlled by OTB as you are simply replenishing basics you have sold.
Fashion basics, like navy blazers also need to be on a replenishment program for year round products.
Where a lot of retailers fail is controlling their OTB in fashion areas. Overstocking a store can be a drain on cash flow. It also leaves outdated merchandise in the store, making it look a bit run down. Unfortunately too many small retailers love their merchandise too much and refuse to cut the prices. Reality is that for poor sellers the faster you take a markdown the less expensive it will be.
When looking at a retailing operation it is also important to be able to determine the profitability of your various suppliers. That is one of the requirements you should look for in merchandising computer software.
FInally, I would recommend you become very familiar with retail inventory accounting. A good retail system package can do the clerical work, but you need to understand how it works, and how decisions impact it - and your profitability.