Bootstrapping a Retail Business

Starting a business is always easier when you have some funding, and far too many business advisors will tell you to wait until you have a substantial amount of capital before launching. But what if you just can't raise the money? Then it's time to ignore the advice of those advisors and jump into the fray.
Obviously, if there's no funding, and you want to bankroll your new retail business out of your own poorly-funded back pocket, you will have to seriously re-evaluate your concept. Notice, we're saying “re-evaluate,” not “abandon.” In fact, it's still possible to start a retail business without having to shell out big money for retail space, inventory and advertising. It's not an easy thing to get funding for a retail shop, especially one that is brand new. Expansion capital is a little easier to come by, if you already have a shop that is making money, but if you've got your eyes on running a brand new boutique, those funding dollars will be scarce. About the only way you'll be able to convince a finance company or bank to give you money to start a new retail shop is if you are willing to put up the equity in your home as collateral against the loan.

And yes, if you have equity, you should expect to have to do this. But—what about the rest of us poor folks who don't have any assets, no savings to speak of, and can't get a signature loan? Are we doomed to a life of wage slavery? No. We just have to start out small, so small that our new business wouldn't even show up in the radar of what most people call a small business. What we're talking about here is a “micro business”—one that can be started with very little or no up-front capital.

Traditional business wisdom calls for a business plan that details your spending for the first year, and where that money will come from. Your original goal may have been to open up a small shop in the mall—but rents in most malls even for a small shop often go for thousands of dollars a month. A “bootstrap” retail business is one that is starting with either no, or very little funding, so that space in the mall is out of the question.

Obviously, your first concern is inventory, and without funding, you won't be able to carry very much of it. Consider what you envision selling, and reduce those items to include only those that have the highest margin and the quickest potential turnaround. Starting off specializing in a dozen or so items that sell briskly will prime the pump so you can add more inventory later.

As for retail space, even though the mall is out, take a look at other areas that may offer cheaper rent, even if the space is a lot smaller than what you had in mind. There may be an existing business that would be complementary to yours, with some space to spare—there's a possibility there of making a deal. And barring that, start out without any permanent retail space at all. Many successful retail shops started out selling exclusively at local festivals, farmers' markets, flea markets and specialty shows, where you rent space by the day or week. While you're selling at these venues, collect a customer mailing list so you can send your best customers a card when you are able to finally move into a permanent retail space.

Most importantly—don't assume that you can't go into business just because you don't have a lot of money.

Before Going Into Business

1. Why should there be anyone would do business with you?

This could be the very first question that you must ask yourself before anything else. You got to demand yourself to an answer to this. Why the heck on earth would anybody pay for this “Junk” you’re selling? Yup, “Junk”, as I phrased it. It doesn’t matter how good your product is to be, to the eye of others, it’s just another piece of product in a sea pool of other similar products.

So, still be very proud of your product or service? Truly you’re 100% proud of it? You truthfully and deeply believe people would be dumb by NOT buying from you?

Well…you passed the first barrier! You’re ready to start go to next stage.


2. The basic business needs 3 things: Lawyer, CPA, and Creative or crazy fellow, which could very well be you.

Almost every business gets themselves for the first two. It’s understandably so. Good creative person are really hard to find, hard to manage, and you’ll never sure of what you’re paying for.

Every established and sizeable business knows the creative side plays a heavier weight than the lawyer and CPA. CPA’s and lawyers can help you when you are up there. But at the early stage when your business is still an infant, your business live or die depending on it’s business branding activities in areas like business identities, logos, marketing campaign, advertising copy and business slogans.

Now, are you NUTS enough? Have people been calling you NUTS?
If so, you are ready for the next stage! Do give yourself a “Cheers”!


3. Singing for Your Own? You Got To Promote Yourself In Every Possible Way.

Do all of them. Yes, Do whatever possible to get your business name to be up there! Get your Business Brand being noticed by others. There more the merrier!

Business can just comes and go so fast before anybody could hears of them. People are busy, what do they care? They don’t care about you and your business. Why should they care? Get serious. Do everything you can possibly and reasonably afford to do. But beware; you must not mislead others because it’ll backfire quickly enough to wipe your business off.

Do you “Sing for your own self”? Then you’ve passed! Move on to next stage…

4. Big Decision: Could You Win The Competition.

It’s very likely that you’re entering a crowded business market when you first started. Take a hard and closer look at what other fellows are doing; what your competitors are doing right now could affect your business greatly.

At this stage, you got to decide: Are you going for “Head to Head” fight? Competing on better quality? Crazier pricing strategy? Extra Mile Service Level? Better Marketing Campaign? or what else? Or you would avoid all that, and create you own niche, where you are the leader?

If you decided to be offering the same or very much similar product at the same price, but your marketing materials doesn’t look half as good as your competitors…hey, you’re in deep trouble! If you’re charging half compare to others, then it’s still alright to “Look” cheap, simply because you are the “Cheaper” alternative where people are looking for.


5. Marketing is basically just a matter Perception.

”Perception” is just another fancy word for thoughts. The thought by the public has in mind all about you and your “Good” or “Bad” business. Good salesmen control the perception more on personal level like putting on neat suit, very nice smile and sincere voice, firm handshake…etc.

And your business marketing campaign need to strive to achieve equivalent level of effects. And it needs to be at a more abstract level by means of having an attractive Business Name, Eye Catching Business Graphics, Professionally dressed-up staff. Any things that just might seduce and persuade a potential visitor to become a paying customer.


6. Your Business Identity; Your Business Equity.

The Business Name, the Logo, the projected Business Look, the public’s perception, recognition, or even affection if there is; these are critical to business success. Big businesses routinely pay big buck like million dollars for these aspects for the business.

Your Business Identity must be well organized to target at desired market. It’s what termed as the “Face” side, the side which public always sees first. Work on refining it so it works wonders. Improve it to get better and even better, and then protect it, and treasured like your beloved!

Yup, there are so many people who just bought a ready business. But every time they run a new marketing campaign, they tend to fall into trap of projecting a different business image and look. Really, don’t ever make such mistake like an amateur.

Consistently stick on to the business branding strategy that your have chosen on the very early stage. This is your Business Equity. By keep changing the business look, you’ll get the public confused, and worse still if they see that you don’t even have the basic respect for your business identity.

Don’t destroy the business equity; you need to be utmost concerned with your business image to the public. It has its own personality. It has to stand out from the rest. It has to send clear signal to the targeted market: “Here We are, Come To Us”, “Get Us Today”.


Do Love Your Business, just like you love yourself.