Used Clothing, Furniture, and Antique Store

views updated

Used Clothing, Furniture, and Antique Store







59 Brookstone Dr.
Bangor, Maine 04401

Gerald Rekve

Rebecca's is a used clothing, furniture, housewares, and antique store. The main products will be those donated by local residents; we will not buy any inventory for resale. Instead, we will contract with local charities and pay them a percentage of the sales we incur as a monetary donation.


This is a used clothing, furniture, housewares, and antique store. The main products will be those donated by local residents; we will not buy any inventory for resale. Instead, we will contract with local charities and pay them a percentage of the sales we incur as a monetary donation. People will be more willing to donate to a store they know will be recycling and reusing items while at the same time helping to fund worthy charities. This will give us an edge up on any competition as well help fuel our inventory.

Our immediate goal is to have this business up and running in six months. Our long-term ambition is to expand to a second location within 24 months. Once we prove this concept to be successful, we plan to branch out and sell conditional franchises to other cities in the area.

Business Strategy

The concept of our business is very simple. In order to keep inventory costs down, we will get our entire inventory by means of donations. We will use local radio to get our message out to the public and use the charities we partner with to be the messenger. This will allow us to remain in the background while the charity takes all the attention. By doing the promotion this way, we will increase our credibility to our market. People will be more trusting in donating their gently used and new, unused items to us. The more this happens, the more we will get product for our store.

Because we are selling donated items, our real inventory cost is zero. This complete lack of inventory overhead will allow us to use our available funds to lease a 10,000 square foot location in a major highway or business retail location. Inventorying this large of a location can be challenging; however, we are confident that we will be able to have enough stock in place on opening day. One of our major competitors for both donations and retail sales may be the Salvation Army. To combat this, we have decided to donate a percentage of our sales to the Salvation Army in addition to the other charities we will partner with; this will ensure the market accepts our business model for both donations and retail sales and does not see us as a threat to other, more established charities.

The store layout is going to be similar to other stores. We will use new merchandise racks to display and sell all of the clothing. Used clothing will be washed and inspected prior to being displayed. All furniture and kitchen items will also be cleaned and inspected prior to resale. The key will be to sell products that look and smell clean and fresh. This will garner higher prices, which will mean more profit for our charities as well more profit for us.


We will lease a 10,000 square foot retail location that previously housed a retail outlet. The size is appropriate for our needs and the store is still in relatively good shape. The only immediate need is a repaint job, which must be completed prior to opening. The store has a great deal of parking and is located on a major roadway. Our major expenses for the start-up will be the store fixtures as well as displays. In addition, we will need to fund staffing costs until we begin to earn sales.


We will employ a total of twenty full- and part-time staff. We will also ask our charities to offer volunteers; this will keep our employee costs down and will also allow our charities to take a more direct role in our business model. Furthermore, having representatives from the various charities present in the store will reinforce, or in some cases introduce, our business model to customers; hence, they may be more willing to donate items to our store or continue to shop there, knowing the revenues will help the charities and are not all profit for a nameless corporation.

We will hire all age groups for staff; this will allow us to have a good representation of the demographics in the city we operate.

We will be open seven days a week from 9 am to 9 pm. Here is the proposed staff work schedule:

Monday-12 hours, 4 full time/4 part time

Tuesday-12 hours, 4 full time/4 part time

Wednesday-12 hours, 4 full time/4 part time

Thursday-12 hours, 4 full time/4 part time

Friday-12 hours, 4 full time/4 part time

Saturday-12 hours, 4 full time/4 part time

Sunday-12 hours, 4 full time/4 part time

We will pay our full-time staff $12 per hour and our part-time staff $8 per hour. All staff will be given the option to work either part-time or full-time. The goal is to make our workplace very employee-friendly and as flexible as possible.

Management Summary

Matt Flowers will be the sole owner of the business and has over twenty years experience working for Costco. During his time at this major retailer, Matt worked in every department. When he decided to leave, he was the assistant store manager. Matt's background in retail sales is extensive-he will use all the skills he learned at Costco to ensure his own business is successful.

During Matt's career at Costco, he worked in seven new store start-ups. This experience has given him the perfect foundation to operate a business like the re-sale of previously owned items. Matt understands inventory flows, seasonal changes and how they affect inventory, as so on.

Two of the most important parts of the success of a retail store are the management team and the products that are sold. In this case, we excel at both.


Our products are used clothing, furniture, kitchen and household times. We will also accept tools, garden furniture, and yard furniture. If something is donated to us and it is working condition, we will re-sell the item. Our market niche is that we reuse products instead of throwing them away.

We also understand that some of our products may be collector's items. Knowing this, we will have one assistant manager dedicated to researching and pricing items appropriately. This will ensure we sell our products for what they worth. If cannot identify an item, then we will price it at approximately 30 percent of the retail cost.

With the increases in housing and living expenses, as well gas prices, we know our products will be attractive to people who do not want to spend a lot of money on new products when they can buy used items that are just as good as new for a fraction of the price. Low income or simply environmental-thinking people will be attracted to our products. Over the last two years the world went from the wars around the world to the need to take care of the world we live in. This is a very strong directional change with everyone now doing things to save the planet, and our business will be seen as green-friendly business.


We will have two types of clients-the person or business donating products to us and the customer who buys those products from us.

The donating clients will be looking for a credible place to donate their items; they will need to see that we are a good community of citizens. They will need to see that we are paying a percentage of our sales to the charity we say we are. The donations these customers see must be placed in the store within a short time period and be priced fairly. This will ensure these customers will be happy that their donations are going to good use and will convince them that we are a good, trustworthy business.

Our clients will come all walks of life; however, the major group of clients will come from the 18 to 36 age group, of which about 65 percent will be female and 35 percent will be male. The yearly income levels will primarily be in the $20,000-$45,000 range. Having said this, there will also be clients from other age and income groups.

Success Factors

The main reason our business will succeed is this-our entire inventory is free, and our only two major expenses are staffing and the lease to our location. Both of these are fixed so we can easily budget. Once the leasehold improvements are made and we open up, our business will produce pre-tax profits in the 44 percent range; this is about 27 percent higher than traditional retail businesses that sell similar products.


Our competitors are retail stores that sell similar products; however, theirs will be new, where ours are used. There are two stores in our market right now that sell similar products.



General merchandise store sales increased 4.9 percent in January after falling the previous two months. Overall, general merchandise stores have seen their sales remain essentially flat throughout 2004. Within the general merchandise sector, department store sales picked up in January, after two months of declines. Sales in department stores jumped 6.1 percent in January, a rise partly attributed to new store openings in the last week of the month but also to stronger consumer spending after a weak holiday season. Other general merchandise stores also enjoyed rising sales in January (+3.6 percent), after two consecutive monthly declines.

Food and beverage retailers posted a 3.0 percent sales gain in January, canceling out the 2.4 percent drop in December. Beer, wine and liquor stores (+12.5 percent) enjoyed by far the largest sales gain of the sector, partly making up for the lost ground in the previous three months, when sales fell 16.0 percent over the period. Supermarkets (+1.5 percent) also saw their sales rise in January, following a 0.7 percent decline in December. In general, sales in the food and beverage sector have been increasing rapidly since the beginning of 2004.

Pharmacies and personal care stores experienced a 2.6 percent sales gain in January, following a decline of similar size in December (-2.4 percent). December's lower sales were the first monthly decline in five months in these stores.

Consumer spending in furniture, home furnishings and electronics stores increased 2.5 percent in January, reflecting gains in three of the four store categories included in this sector. Furniture stores (+5.5 percent) posted by far the largest increase in sales, after experiencing two consecutive monthly declines. For their part, home electronics and appliance stores (+1.5 percent) and computer and software stores (+1.5 percent) enjoyed their second straight monthly sales gain in January. Sales in the overall sector have regained some strength since the summer of 2004, after remaining essentially flat in the first half of the year.

Sales advanced 2.4 percent in building and outdoor home supplies stores in January, after falling 1.6 percent in December. Despite January's sizable gain, these retailers have seen little change in their monthly sales since last August. Retailers in the automotive sector saw their sales rise for the first time in three months in January (+0.5 percent). The 1.3 percent sales gain observed at new car dealers was partially offset by a 2.5 percent decline at used and recreational motor vehicle and parts dealers. While new car dealers' sales seem exceptionally strong (+9.9 percent) compared with January 2003, they were only 1.1 percent above those observed in the same month two years ago. Except for the sharp declines seen in the second half of 2003, sales at new car dealers have remained more or less steady over the past three years.



The location we have chosen to lease will be an old retail store location. We will be spending about $50,000. This money will mostly go to the painting of the store's inside and outside walls, along with a new tile floor to be installed. All of the colors to be painted on the walls will be light, which will make the store bright and cheery.

The major advantage to leasing will be the fact that we will not need to spend a lot of money to buy a location. While the location we are leasing is going to be expensive, we will save the money we would have used to buy the building to instead to use it to manage the cash flows of our business.

Start'up Expenses

Payroll expenses$25,000
Equipment leases (copiers, fax machines, telephone system, computer)$10,000
Accountant's fees$1,500
Attorney's fees$2,500
Other expenses$2,400


Net sales385,400300,00085,400
Cost of goods
Merchandise inventory, January 1160,000160,0000
Freight charges 2,500 2,000500
    Total merchandise handled282,500252,00030,500
Less inventory, December 31100,000120,000(20,000)
Cost of goods sold182,500132,00050,500
Gross profit202,900168,00034,900
Interest income500700(200)
    Total income202,500168,70033,800
Office supplies2,2503,000(750)
Travel and entertainment2,7002,000700
Dues & subscriptions1,1001,000100
Interest paid2,1402,500(360)
Repairs & maintenance1,2501,000250
Taxes & licenses11,70010,0001,700
    Total expenses133,290106,85026,440
Net income$ 69,210$ 61,850$ 7,360


The total investment required for this retail store includes $100,000 from the owner, Matt Flowers, and another $300,000 from four private investors. With the start up equity in place, Matt Flowers will put the business plan in place, secure the location, and secure the partnerships with charities. It is planned that the store will be up and running within three months.