Wednesday, August 24, 2011

Want to Start a Retail Business - How Are You Going to Afford to Do That?

As a retired franchiser, I've often assisted start up entrepreneurs who have new concepts or want to start new businesses as a way to keep my mind active. Not long ago, I was reading a brilliant business plan created by a serial entrepreneur for a new retail product line. Everything looked good, but I obviously questioned the costs, and the amount of time the entrepreneur assumed they could get the business started. You see, far too often entrepreneurs are a little over exuberant with their optimism.

Not to burst the bubble of this entrepreneur's dream, I recommended that they multiply times three the time they estimated that it would take to get their business started, and I suggested that they'd either double or triple the costs that they guesstimated in their proforma that it would need in capital to get going. At first they argued with me, which I'm quite used to, but then as I went over all the realities of the costs, permits, and all of the rules and regulations which would be put onto their new business by city, County, state, and federal government they began to see my point. Indeed, it looked like they would have to readjust their proformas, and seek a larger amount of capital, stronger investors, or borrow more money.

Currently, they are reworking their business plan, and to help them out with some of the numbers, I went to go visit a friend of mine who was the manager for our local mall in our area. I asked her what it costs to lease a space in the mall, and what the terms were. It appears the leases were 5 to 10 years, and there were an incredible number of stipulations for tenant improvements. However, she also indicated to me that they did have some kiosk locations available, and that might be something to think about.

After discussing this with her, I pulled out an old article I clipped from the Wall Street Journal which was published on August 3, 2011 and written by A.D. Pruett which was titled; "Malls Make Room for Startups," where it stated;
"Mall owners trying to keep space filled amide economic downturn have found an unexpected source of relief: demand from newly minted retailers. Mall owners have become more willing to lease kiosks, cards, and even empty stores to entrepreneurs of necessity."

What I'm saying to you is this; although the malls have not done as well as they have in the past, there is a synergy there, and a group of consumers that do like to frequent the shopping facilities. Maybe this is a way for a new entrepreneur to cut their costs, and the amount of capital they need to get started. Indeed, it's definitely something to think about. Please consider all this and think on it.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes writing 24,500 articles by August 24th or 25th will be difficult because all the letters on his keyboard are now worn off now..

Start Your Own Business (Start Your Own Business: The Only Start-Up Book You'll Ever Need)                         The Women's Small Business Start-Up Kit: A Step-by-Step Legal Guide                     Start Your Own Successful Retail Business (Start Your Own Retail Business)

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