The industry landscape for fabric is a fruitful one. The Association for Creative Industries (AFCI) reported that the annual retail sales for hobby and craft supplies are worth $36 billion, which makes the textile trade a major player in the American retail scene.
Industry trends, however, do not guarantee the instant success of your fabric store. The best entrepreneurs pay attention to a variety of success factors: inventory costs, wholesaler relationships, marketing and markups. It’s also about paying attention to what the customer wants: a selection of Judy Niemeyer paper patterns, more quilting options, acrylic paint on fabric and more.
Succeeding in the fabric shop industry requires diligence and patience, especially when performing the following tasks.
Decide: Start from Scratch or Buy an Existing Shop?
Aspiring fabric store owners have two options. The first one is buying an existing brick-and-mortar or online store. When you buy an existing shop, you can take over a business that has a proven track record, which lessens your tasks in terms of building credibility. Also, since these stores have already weathered their competitors, they already have a loyal customer base.
The cons of buying an existing shop, however, are:
- The need to do due diligence
- Less flexibility in creating a brand
- More time spent on permits, licenses and vendor relationships
If you wish to start your business from scratch, you can establish your own brand and develop a shop in line with your vision. You can also invest your money in a business that doesn’t deal with slow-moving stocks or debts. On the other hand, starting your own shop will require more time, effort and resources.
Finalize the Business Basics
Before you operate a business, finalize the following:
- If you are opening a physical store, prioritize the location. Allow several months for finding a property that is accessible to customers and in an area with a high demand for sewing and fabric supplies. By allotting a few months for the search, you give yourself more time to deal with negotiations for affordable rent or sale prices and space build-outs.
- A strong relationship with suppliers is essential in building an operational fabric shop. Before you work with a supplier, provide them with evidence of your business’s legitimacy, such as business registration letters and bank statements.
- Licensing and permits. Retail businesses require several permits and licenses to operate. Required permits and licenses include building permits, state business license and sales tax license.
- Implement a set hiring process. Customers rely on the expertise of the shop’s salespeople, so it’s important to hire applicants with knowledge of fabric, crafts and sewing.
- Look for multiple channels to inform the public about your new store. This can be achieved through press releases and digital marketing efforts.
Develop a Business Plan
Like any other business, opening a fabric shop requires intensive research and planning. The first step is creating a business plan. If you have never developed a business plan before, study online or seek guidance from a mentor.
The basic business plan always has a mission statement, industry and market analysis, financial projections and plans for hiring. Also, decide if you want to open a physical store or sell your products online. Many physical stores can take online orders, but brick-and-mortar stores with an online counterpart require a different business plan from a shop that operates online 100 percent.
To save more time, use a business plan software to streamline the process. A reliable software solution increases the consistency and accuracy of your plan, drastically improving the value of your store.
Consider Finances and Secure Funding
How are your startup costs?
Costing discussions often follow the identification of the high-traffic location of your new fabric store. Once you’ve decided on a location, consider costs concerning inventory. To attract more customers, you’ll need a huge selection of fabrics and other materials. The size of your shop will dictate the inventory you need.
Consider where you’ll get your revenue streams. Be creative in finding ways to increase store traffic and generate more revenue. Hobby groups, craft classes and special events are great ways to increase traffic to your shop and add income (via registration fees).
Once you’ve finalized your costing considerations, assess your finances. While some entrepreneurs are capable of opening shops using their savings, many apply for a grant, apply for a loan or request money from investors. Some business owners use all three approaches.
Set up your business for success with a plan that’s practicable, flexible and has been properly analyzed. Keep these steps in mind to secure the success of your first fabric store.