Do you like to sew, knit, embroider, and feel passionate about sharing your knowledge with the rest of your community?
After a challenging few years, fabric shops are back in demand. The growing awareness around the destructive impact of fast fashion has led increasingly more people to opt for the DIY lifestyle - with UK arts and crafts retailer Hobbycraft revealing that sales of sewing machines climbed by nearly 30% in 2016.
So whether it's part of a franchise or your own independent store, if you've been pondering the possibility of opening a fabric shop, this may just be the right time.
In this guide on how to open a fabric shop, you will find all the information needed to carry out your project, including tips for how to write the business plan for your fabric shop.
Conducting market research for your fabric shop
The first step in opening a fabric shop is to carry out market research.
The objective of this exercise is to enable you to verify that your project can be commercially viable. This research will also go some way in helping you develop your future marketing strategy.
To successfully carry out this market study, you'll need to:
- Analyze the trends in the sector: is the sector growing? Are new trends emerging? Are customer's buying habits changing?
- Carry out a detailed analysis of the competition: identify the direct competitors (other fabric shops located in your region) and indirect competitors (websites or apps such as Depop)? What are their products? What services do they offer in addition to these products and for what price?
- Study the expectations of your future customers: What types of products do they want? Are they looking for services in addition to products? What is the typical profile of a customer (age, socio-professional category, income, etc.)?
Choosing the right concept to open your fabric shop
Choosing the right concept will be vital in setting out the specific vision you have in mind for your fabric shop.
You can find different types of fabric shops:
- Specialized fabric shops that only sell objects or fabric or things related to sewing
- Fabric shops that additionally sell wool and everything needed for knitting
- Fabric shops that also sell a range of products related to the hobby of sewing
- Fabric shops that also sell already finished products (such as handmade knitted scarves and blankets)
Choosing a specific market positioning enables you to set yourself apart from your competitors, with factors including the overall atmosphere of the store, a commitment to ethical practices, workshops and regular meetings with your local suppliers, workshops with bloggers, etc.
The goal is to offer a value proposition that is consistent with your concept and will constitute the very DNA of your fabric shop.
Opening a fabric shop: franchise or independent?
Once you've defined your concept, the next step to opening your fabric shop is to decide whether you'd prefer to join a franchise or develop an independent store.
Both options have advantages. By going independent, you'll have all the freedom and autonomy in the world when it comes to setting out the vision for your new business. If you decide to join a franchise network, you'll be able to benefit from the reputation of a well-known brand, marketing support, and a network of suppliers.
Scoping out a location for your fabric shop
Once you've decided on the type of fabric shop you want to open, it's time to consider the location. This choice is important because it will have a direct influence on how successful your venture is.
Placement on a busy downtown shopping street will allow you to benefit from high visibility but will inflate your rent.
Adversely, a quieter street will require more effort to get your name out there, but will allow you to save money on rent.
Your ideal location may be in the heart of the city centre or further out in a more industrial area when opening a fabric shop. It's up to you to choose where you think will be most effective.
Choosing the legal structure of your fabric shop
Once you've found the premises of your future fabric shop, you need to decide its legal form.
Choosing your store's legal form is a vital step as it will impact:
- How much your business is taxed
- Your taxation at a personal level
- Your responsibility for the company's debts in the event of bankruptcy
The choice will depend on your preferences and personal situation (e.g. the number of partners involved in your venture, the amount of start-up capital at your disposal, etc.).
Several legal forms are possible, so they should all be carefully considered before making your decision.
Developing a marketing plan to open a fabric shop
The next step is to develop a strong marketing plan to open your fabric shop, the premise of which will be to attract new customers and build customer loyalty.
The list of suggestions below should give you some ideas, although it's not exhaustive. It's up to you to do some digging and figure out which actions you want to, (and based on your budget), can realistically take to market your fabric shop. Some marketing ideas include:
- Street marketing, such as handing out flyers to the public
- Creation of social media profiles and partnerships with influencers
- Creation of a website and the implementation of a newsletter to showcase promotional offers
- Advertising in the local newspaper
- Online advertising on websites related to sewing, knitting and other fabrics
- Offering video tutorials or online training on the shop website
- The offering of in-store sewing workshops
You will also need to consider how to build up customer loyalty. A loyalty program with an associated card and benefits could be a good shout here. You could also consider making a sewing or knitting gift box that showcases your different products. This would be an effective way to both sell your stock and make it known to a wider scope of potential customers.
Before opening your fabric shop, take some time to write down all the actions you can think of and then implement them - giving priority to those that you find the most effective.
Evaluate the budget to open a fabric shop
Once you have decided on the concept, found your premises, and chosen the shop's legal structure, you will need to look into the elements required to create the budget to open a fabric shop and to ensure the smooth running of your business thereafter.
The equipment required to launch a fabric shop
First of all, you will need to acquire all the items necessary to equip your store for many successful future sales, including a cash register, shelves, sewing machines, an eye-catching window display and trinkets, and not forgetting the initial stock such as fabric, ribbons, needles, wool, iron-on patches.
The recruitment plan for a fabric shop
You can, of course, start on your own. But perhaps you're entertaining the thought of keeping your business open for longer hours further down the line.
And in the event of receiving a high volume of customers at once, you may have planned to make several checkouts available to them - in which case, you will need to hire staff.
We recommend that you hire members of staff who are passionate about sewing and knitting, so they'll be able to adequately advise customers and share their knowledge in the area.
When advertising for new staff, define your needs for each position in terms of responsibilities, skills required, schedules and, salary expectations.
Administrative services required to launch a fabric shop
Opening a fabric shop also implies having recourse to additional services, such as insurance, water, electricity, maintenance, or a premise license if you intend to broadcast music.
You may also want to outsource shop maintenance to a cleaning company or delegate part of the administrative management to an accounting firm. To ensure you estimate these expenses as accurately as possible, get in touch with several professionals and ask them for quotes.
Writing the business plan for a fabric shop
Once you have gathered all the information in the previous sections, you can start writing the business plan for your fabric shop.
The business plan is made up of two major components:
- A financial forecast that aims to highlight the potential profitability of the project and the need for initial financing.
- A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
The business plan is the document with which you will try to attract funding from your bank or potential investors, so you need to make it impeccable.
If you are not used to writing business plans, a good solution would be to use online business plan software.
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the accounting aspects for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by clicking here.
Securing financing to set up a fabric shop
Once your business plan has been written, it's time to embark on the last step in the creation of a fabric shop: the search for financing.
The initial budget required to open a fabric shop will vary depending on the size of your shop.
In order to gather the sum necessary for your shop's launch, you should assess the various possibilities of financing available to you.
First of all, you must estimate the amount of money that you and your potential partners can personally devote to your project. Even if the sum seems very modest in comparison to what you need to raise, it's important that you don't neglect personal contribution. It's highly regarded by institutional investors as they see it as tangible proof of your dedication to the venture.
You can also apply for a professional loan from a bank to finance part of the start-up costs, whether that involves buying sewing machines or kitting out the premises with cool furniture. Remember to submit applications to different banks so that you can compare offers and pick whichever one works best for you.
Crowdfunding is another option. Crowdfunding allows you to collect donations or raise equity from family members or kind strangers who believe in your project.
You can even raise awareness of this initiative by awarding donors with ‘counter-gifts’, including a free basket of sewing supplies, an invitation to a DIY workshop, or a discount on their first purchase.
Finally, also think about state aid for business creators and buyers. This may enable you to benefit from an interest-free loan, for example.
Some useful links to open a fabric shop
- UKFT, the biggest network for UK fashion and textile companies
- Offset Warehouse, an online resource for hand-picked eco fabrics and haberdashery
That's it for this time, we hope this article has helped you better understand how to open a fabric shop. If you have any questions related to setting up your business, please do not hesitate to contact us.
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