Consignment Store Business Plan
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Executive Summary
Business Overview
Casual Consignment is a startup consignment company located in Houston, Texas. The company is founded by Terri Cooper who has experience in both retail clothing sales and consignment sales Now, with the expertise of knowledge and business acumen, Terri has determined she can confidently start and effectively grow a successful consignment company. Terri believes her experience of strategic growth, marketing skills, financial capabilities, and wide and deep knowledge of consignment and retail sales practices will provide everything needed for long-term growth and profitability.
Casual Consignment will provide a comprehensive array of women’s clothing for a wide variety of clients. Casual Consignment will be the popular clothing store for all ages, providing services and products to each client while supporting the strategic goals of the company. Casual Consignment will be the ultimate choice in Houston for clients to ensure that every need of the customer is fully and completely met.
Product Offering
The following are the products and services that Casual Consignment will provide:
- Curated clothing for resale of excellent quality.
- Clothing that has been cleaned and ensured to be of high quality
- A diverse range of clothing, including outerwear, sportswear, women’s casual, young teen, and children’s garments
- Fair and transparent pricing, with original tags secured, if possible and markdowns clearly identified
- Customer values in handbags, jewelry and accessories
- Day to day excellent customer service
- Private rooms to try on clothing, if desired
Customer Focus
Casual Consignment will target the adult women of all ages, teens, and children within the greater Houston region. The consignment store will also target retailers who are seeking to refresh inventories or add to offerings in their establishments.
Management Team
Casual Consignment is owned and operated by Terri Cooper. She recruited a former administrative assistant, Cary Brown, to be her store manager and help oversee the store and take on operational duties. She also recruited Manny Jaurez to be the general maintenance man and assistant in stocking and inventory.
Terri Cooper graduated from Houston Lyons High School in 2007 and began to pursue her concept to open a consignment store. She studied consignment sales at Pine Valley Community College while obtaining her associate of arts degree in business. She also worked for ten years within the consignment retail industry, where she became very well known and respected for finding the most appropriate and suitable clothing for a wide variety of women who needed business clothing or clothing for special occasions. Customers often wait to be assisted by Terri for this reason.
Cary Brown worked alongside Terri Cooper for five years after graduating from Houston Lyons High School. She held the role of retail assistant in an administrative position and also helped customers with questions and suggestions for wardrobe items. She will hold the role of store manager in the new store.
Manny Juarez, the former general maintenance man at the consignment store, will now be the manager and assistant in stocking of consignment items and inventory.
Success Factors
Casual Consignment will be able to achieve success by offering the following competitive advantages:
- Friendly, knowledgeable, and highly-qualified team at Casual Consignment
- Comprehensive and curated selection of clothing for all occasions, including formal and special occasions. Accessories, handbags and jewelry are also included.
- Women’s clothing, young adult fashions, teen clothing, and children’s clothing are all included in inventory.
- Inventory changes regularly on a one-month rotation to refresh customer choices and clothing availability.
- Rigorous cleaning and clothing preparation takes place prior to inventory placement
- Casual Consignment offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
Download the Consignment Store business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Casual Consignment is seeking $200,000 in debt financing to launch its Casual Consignment store. The funding will be dedicated toward securing the store space and purchasing store equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:
- Store space build-out: $20,000
- Store equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph outlines the financial projections for Casual Consignment.
Company Overview
Who is Casual Consignment?
Casual Consignment is a newly established, full-service clothing consignment store in Houston, Texas. Casual Consignment will be the most stylish, on-trend and affordable choice for customers in Houston and the surrounding communities. Casual Consignment will provide a comprehensive selection of clothing for any customer to view and select for purchase. Their full-service approach includes a comprehensive array of curated clothing styles in excellent condition, reasonable pricing and convenient rooms for trying on clothing.
Casual Consignment will be the favorite “go to” clothing store for all customers and will offer the best curated selection of clothing under the guidance of Terri Coopear. The team of professionals are highly qualified and experienced in Casual Consignment and are well-trained in assisting customers in every aspect of the buying process. Casual Consignment removes all headaches and issues of clothing shopping and ensures all expectations are well met while delivering the best customer service.
Casual Consignment History
Casual Consignment is owned and operated by Terri Cooper. Ms.Cooper graduated from Houston Lyons High School in 2007 and began to pursue her concept to open a consignment store. She studied consignment sales at Pine Valley Community College while obtaining her associate of arts degree in business. She also worked for ten years within the consignment retail industry, where she became very well known and respected for finding the most appropriate and suitable clothing for a wide variety of women who needed business clothing or clothing for special occasions. Customers often wait to be assisted by Terri for this reason.
Since incorporation, Casual Consignment has achieved the following milestones:
- Registered Casual Consignment, LLC to transact business in the state of Texas.
- Has a contract in place for a 10,000 square foot office at one of the largest retail buildings
- Reached out to numerous contacts to include Casual Consignment while shopping.
- Began recruiting a staff of three and three office personnel to work at Casual Consignment
Desert Sun Consignment Storeing Company Services
The following will be the services Casual Consignment will provide:
- Curated clothing for resale of excellent quality.
- Clothing that has been cleaned and ensured to be of high quality
- A diverse range of clothing, including outerwear, sportswear, women’s casual, young teen, and children’s garments
- Fair and transparent pricing, with original tags secured, if possible and markdowns clearly identified
- Customer values in handbags, jewelry and accessories
- Day to day excellent customer service
- Private rooms to try on clothing, if desired
Industry Analysis
The clothing consignment industry is expected to grow over the next five years to over $70 billion. The growth will be driven by the desire by consumers to conserve clothing and wear clothing that has been sustained as a practice of reasonable use of the world’s environment. The shift in moving toward resale clothing items over new items will continue to grow as technology enables the advancement of cleaning, repairing and redesigning used clothing to produce wearable clothing that has been refashioned. In addition, software technology will move many of the routine processes to digital systems, relieving staff of the more time-consuming tasks in the retail store.
Costs will likely be reduced as technology becomes known and is used more and more freely. Costs will also be reduced by the recycling of clothing and accessories, to produce an overall savings or the purchase of new items. Costs will be reduced as more clothing stores adopt the recycle and reuse policies and fewer garments are thrown into landfills.
Download the Consignment Store business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Casual Consignment will target adult women in Houston, Texas of all ages, as well as teens, and children within the greater region. The consignment store will also target retailers who are seeking to refresh inventories or add to offerings in their establishments.
The precise demographics for Casual Consignment are:
| Total | Percent | |
|---|---|---|
| Total population | 1,680,988 | 100% |
| Male | 838,675 | 49.9% |
| Female | 842,313 | 50.1% |
| 20 to 24 years | 114,872 | 6.8% |
| 25 to 34 years | 273,588 | 16.3% |
| 35 to 44 years | 235,946 | 14.0% |
| 45 to 54 years | 210,256 | 12.5% |
| 55 to 59 years | 105,057 | 6.2% |
| 60 to 64 years | 87,484 | 5.2% |
| 65 to 74 years | 116,878 | 7.0% |
| 75 to 84 years | 52,524 | 3.1% |
Customer Segmentation
Casual Consignment will primarily target the following customer profiles:
- Adult women of all ages
- Young adult women and teens
- Children of all age groups
- Clothing retailers looking to refresh or build inventory
Competitive Analysis
Direct and Indirect Competitors
Casual Consignment will face competition from other companies with similar business profiles. A description of each competitor company is below.
Clothing On Trend
Established by Manny Buonao in 2001, Clothing On Trend is a clothing store focused on selling to young adult, teen, and pre-teen categories. The clothing sold is imported from Brazil and the pricing is comparable to consignment store pricing. While attractive and casually fun to wear, Clothing On Trend items are made of materials that are not long-lasting and many items much be dry cleaned with each use.
Manny Buonao worked in a retail clothing shop for twenty years and determined after that time to increase his inventory and build a company focused on the young women demographic. This has been profitable; however, the quality of the clothing remains and issue, as many items are returned for full value.
Everyday Consignment Shop
Everyday Consignment Shop was established in 1998 by Nancy and Tommy Gordon. The store inventory is made up of household items, decor, small furnishings, kitchen assortments, and reconditioned collectibles. Nancy and Tommy Gordon owned a retail store in Houston for over ten years before starting Everyday Consignment, where the inventory was directed to men’s clothing and children’s clothing, along with camping gear and outdoor sporting equipment.
After closing the Everyday Consignment shop, the Gordons opened the Everyday Consignment Shop, offering general household items and special holiday-themed retail items during major holidays. Some items are new and sold as overstocks; however, the bulk of the inventory are items that were preowned and lightly used. All inventory is sorted and inspected for usability and any breakage or signs of wear and tear before being placed into inventory.
24 Hour Stop n’ Shop
Although the 24 Hour Stop n’ Shop is primarily attached to a gas station in West Houston, the convenience store has expanded to include a wide variety of consignment items for sale and has proven to be very popular with customers who arrive to purchase gas and stay to peruse the racks of consignment items. Included in the store are household items, decor items, children’s toys, gardening and outdoor items, and kitchen utensils and linens. Some items are sold new as overstocks, while 95% of the items offered are lightly used.
Mary and Harry Ragan own the 24 Hour Stop n’ Shop and have used the store as a means to offload many of their family collectibles and items no longer needed from their former ranch. The Ragans have build a sizable customer base and plan to expand the business to include prepared food items, including snacks and packaged meals, to complement the consignment shop and the convenience store items already in stock.
Download the Consignment Store business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Casual Consignment will be able to offer the following advantages over their competition:
- Friendly, knowledgeable, and highly-qualified team at Casual Consignment
- Comprehensive and curated selection of clothing for all occasions, including formal and special occasions. Accessories, handbags and jewelry are also included.
- Women’s clothing, young adult fashions, teen clothing, and children’s clothing are all included in inventory.
- Inventory changes regularly on a one-month rotation to refresh customer choices and clothing availability
- Rigorous cleaning and clothing preparation takes place prior to inventory placement
- Casual Consignment offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
Marketing Plan
Brand & Value Proposition
Casual Consignment will offer the unique value proposition to its clientele:
- Highly-qualified team of skilled employees who offer both excellent prices and assistance in service to customers.
- A comprehensive, curated selection of cleaned clothing for customers
- Affordable pricing on clothing that is sustainable and usable, saving the environment in the process
Promotions Strategy
The promotions strategy for Casual Consignment is as follows:
Word of Mouth/Referrals
Casual Consignment has built up an extensive list of contacts over the years by providing exceptional service and expertise to former clients. The contacts and clients will follow the employees to their new company and help spread the word of Casual Consignment.
Professional Associations and Networking
Retail associations will be joined and networking will be a priority during the first years of business in Houston. There are competitors, both direct and indirect, and the possibility exists for collaboration via associations.
Print Advertising
A direct mail piece will be sent to every Houston household offering a significant discount on clothing purchased during the first 90 days of business. This offer will be made to incentivize new customers to find and continue returning to the Casual Consignment Shop.
Website/SEO Marketing
Casual Consignment will fully utilize their website. The website will be well organized, informative, and list all the product types and services that Casual Consignment provides. The website will also list their contact information and list their holiday special inventory items, along with monthly discounts. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “consignment company” or “clothing resale near me,” Casual Consignment will be listed at the top of the search results.
Pricing
The pricing of Casual Consignment will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
Operations Plan
The following will be the operations plan for Casual Consignment.
Operation Functions:
- Terri Cooper will be the owner and president of the company. She will oversee all staff and manage client relations. Terri has spent the past year recruiting the following staff:
- Cary Brown will become the store manager and help oversee the store and take on operational duties.Cary Brown worked alongside Terri Cooper for five years after graduating from Houston Lyons High School.
- Manny Jaurez, also a former retail associate, will become the general maintenance man and assistant in stocking and inventory.
Download the Consignment Store business plan template (including a customizable financial model) to your computer here <–
Milestones:
Casual Consignment will have the following milestones completed in the next six months.
- 5/1/202X – Finalize contract to lease store space
- 5/15/202X – Finalize personnel and staff employment contracts for Casual Consignment
- 6/1/202X – Finalize contracts for Casual Consignment vendors
- 6/15/202X – Begin networking at industry events
- 6/22/202X – Begin moving into Casual Consignment store
- 7/1/202X – Casual Consignment opens its doors for business
Management Team
Casual Consignment is owned and operated by Terri Cooper. She recruited a former administrative assistant, Cary Brown, to be her store manager and help oversee the store and take on operational duties. She also recruited Manny Jaurez to be the general maintenance man and assistant in stocking and inventory.
Terri Cooper graduated from Houston Lyons High School in 2007 and began to pursue her concept to open a consignment store. She studied consignment sales at Pine Valley Community College while obtaining her associate of arts degree in business. She also worked for ten years within the consignment retail industry, where she became very well known and respected for finding the most appropriate and suitable clothing for a wide variety of women who needed business clothing or clothing for special occasions. Customers often wait to be assisted by Terri for this reason.
Cary Brown worked alongside Terri Cooper for five years after graduating from Houston Lyons High School. She held the role of retail assistant in an administrative position and also helped customers with questions and suggestions for wardrobe items. She will hold the role of store manager in the new store.
Manny Juarez, the former general maintenance man at the consignment store, will now be the manager and assistant in stocking of consignment items and inventory.
Financial Plan
Key Revenue & Costs
The revenue drivers for Casual Consignment are the clothing fees they will charge to customers for their inventory items.
The cost drivers will be the overhead costs required in order to staff Casual Consignment. The expenses will be the payroll cost, rent, utilities, shop supplies, and marketing materials.
Funding Requirements and Use of Funds
Casual Consignment is seeking $200,000 in debt financing to launch its consignment store. The funding will be dedicated toward securing the store space and purchasing equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:
- Store space build-out: $20,000
- Store equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
Download the Consignment Store business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Customers Per Month: 400
- Average Revenue per Month: $48,500
- Office Lease per Year: $100,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Consignment Store Business Plan FAQs
What Is a Consignment Store Business Plan?
A consignment store business plan is a plan to start and/or grow your consignment store business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
What are the Main Types of Consignment Store Businesses?
There are a number of different kinds of consignment store businesses, some examples include: Clothing, Books, Music and Movies, and Furniture.
How Do You Get Funding for Your Consignment Store Business Plan?
Consignment Store businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Consignment Store Business?
Starting a consignment store business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Consignment Store Business Plan - The first step in starting a business is to create a detailed consignment store business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your consignment store business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your consignment store business is in compliance with local laws.
3. Register Your Consignment Store Business - Once you have chosen a legal structure, the next step is to register your consignment store business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your consignment store business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Consignment Store Equipment & Supplies - In order to start your consignment store business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your consignment store business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.