How to open a lingerie shop?
Want to start a lingerie shop but don't know where to begin? Then you've come to the right place!
Our comprehensive guide covers everything related to opening a lingerie shop - from choosing the right concept to setting out your marketing plan and financing your business.
You'll also learn how to assess the profitability of your business idea and decide whether or not it can be viable from a financial perspective.
Ready to kickstart your entrepreneurial journey? Let's begin!
What is the business model of a lingerie shop?
Before thinking about starting a lingerie shop, you'll need to have a solid understanding of its business model (how it generates profits) and how the business operates on a daily basis.
Doing so will help you decide whether or not this is the right business idea for you, given your skillset, personal savings, and lifestyle choices.
Looking at the business model in detail will also enable you to form an initial view of the potential for growth and profitability, and to check that it matches your level of ambition.
The easiest ways to acquire insights into how a lingerie shop works are to:
- Speak with lingerie shop owners
- Undertake work experience with a successful lingerie shop
- Participate in a training course
Speak with lingerie shop owners
Talking to seasoned entrepreneurs who have also set up a lingerie shop will enable you to gain practical advice based on their experience and hindsight.
Learning from others' mistakes not only saves you time and money, but also enhances the likelihood of your venture becoming a financial success.
Undertake work experience with a successful lingerie shop
Gaining hands-on experience in a lingerie shop provides insights into the day-to-day operations, and challenges specific to the activity.
This firsthand knowledge is crucial for effective planning and management if you decide to start your own lingerie shop.
You'll also realise if the working hours suit your lifestyle. For many entrepreneurs, this can be a "make or break" situation, especially if they have children to look after.
First-hand experience will not only ensure that this is the right business opportunity for you, but will also enable you to meet valuable contacts and gain a better understanding of customer expectations and key success factors which will likely prove advantageous when launching your own lingerie shop.
Participate in a training course
Undertaking training within your chosen industry is another way to get a feel for how a lingerie shop works before deciding to pursue a new venture.
Whichever approach you go for to gain insights before starting your lingerie shop, make sure you familiarise yourself with:
- The expertise needed to run the business successfully (do you have the skills required?)
- How a week of running a lingerie shop might look like (does this fit with your personal situation?)
- The potential turnover of your lingerie shop and long-term growth prospects (does this match your ambition?)
- The likely course of action if you decide to sell the company or retire (it's never too early to consider your exit)
At the end of this stage, you should be able to decide whether opening a lingerie shop is the right business idea for you given your current personal situation (skills, desires, money, family, etc.).
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Assemble your lingerie shop's founding team
The next step to start your lingerie shop is to think about the ideal founding team, or to go in alone (which is always an option).
Setting up a business with several partners is a way of reducing the (high) risk of launching a lingerie shop since it allows the financial risk of the project to be shared between the co-founders.
This also allows the company to benefit from a greater diversity of profiles in the management team and to spread the burden of decision-making over several shoulders.
But, running a business with multiple co-founders brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your business.
To make an informed decision, we suggest asking yourself these questions:
- How many co-founders would increase the project's chances of success?
- Do you and your potential partners share the same aspirations for the project?
- What is your plan B in case of failure?
Let's examine each of these questions in detail.
How many co-founders would increase the project's chances of success?
The answer to this question will depend on a number of factors, including:
- Your savings compared with the amount of initial capital needed to launch the lingerie shop
- The skills you have compared with those needed to make a success of such a project
- How you want key decisions to be taken in the business (an odd number of partners or a majority partner is generally recommended to avoid deadlock)
Put simply, your partners contribute money and/or skills, and increasing the number of partners is often a good idea when one of these resources is in short supply.
Do you and your potential partners share the same aspirations for the project?
One of the key questions when selecting your potential partners will be their expectations. Do you want to create a small or large business? What are your ambitions for the next 10 or 15 years?
It's better to agree from the outset on what you want to create to avoid disagreements, and to check that you stay on the same wavelength as the project progresses to avoid frustration.
What is your plan B in case of failure?
Of course, we wish you every success, but it's wise to have a plan B when setting up a business.
How you handle the possibility of things not working out can depend a lot on the kind of relationship you have with your co-founders (like being a close friend, spouse, former colleague, etc.) and each person's individual situation.
Take, for instance, launching a business with your spouse. It may seem like a great plan, but if the business doesn't succeed, you could find yourself losing the entire household income at once, and that could be quite a nerve-wracking situation.
Similarly, starting a business partnership with a friend has its challenges. If the business doesn't work out or if tough decisions need to be made, it could strain the friendship.
It's essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Is there room for another lingerie shop on the market?
The next step in starting a lingerie shop is to undertake market research. Now, let's delve into what this entails.
The objectives of market research
The goal here is straightforward: evaluate the demand for your business and determine if there's an opportunity to be seized.
One of the key points of your market analysis will be to ensure that the market is not saturated by competing offers.
The market research to open your lingerie shop will also help you to define a concept and market positioning likely to appeal to your target clientele.
Finally, your analysis will provide you with the data you need to assess the revenue potential of your future business.
Let's take a look at how to carry out your market research.
Evaluating key trends in the sector
Market research for a lingerie shop usually begins with an analysis of the sector in order to develop a solid understanding of the its key players, and recent trends.
Assessing the demand
After the sector analysis comes the demand analysis. Demand for a lingerie shop refers to customers likely to consume the products and services offered by your company or its competitors.
Looking at the demand will enable you to gain insights into the desires and needs expressed by your future customers and their observed purchasing habits.
To be relevant, your demand analysis must be targeted to the geographic area(s) served by your company.
Your demand analysis should highlight the following points:
- Who buys the type of products and services you sell?
- How many potential customers are there in the geographical area(s) targeted by your company?
- What are their needs and expectations?
- What are their purchasing habits?
- How much do they spend on average?
- What are the main customer segments and their characteristics?
- How to communicate and promote the company's offer to reach each segment?
Analyzing demand helps pinpoint customer segments your lingerie shop could target and determines the products or services that will meet their expectations.
Assessing the supply
Once you have a clear vision of who your potential customers are and what they want, the next step is to look at your competitors.
Amongst other things, you’ll need to ask yourself:
- What brands are competing directly/indirectly against your lingerie shop?
- How many competitors are there in the market?
- Where are they located in relation to your company's location?
- What will be the balance of power between you: are your competitors independent players or franchises?
- What types of services and products do they offer? At what price?
- Are they targeting the same customers as you?
- How do they promote themselves?
- Which concepts seem to appeal most to customers?
- Which competitors seem to be doing best?
The aim of your competitive analysis will be to identify who is likely to overshadow you, and to find a way to differentiate yourself (more on this see below).
Regulations
Market research is also an opportunity to look at the regulations and conditions required to do business.
Ask yourself the following questions:
- Do you need a special degree to open a lingerie shop?
- Are there necessary licences or permits?
- What are the main laws applicable to your future business?
At this stage, your analysis of the regulations should be carried out at a high level, to familiarize yourself with any rules and procedures, and above all to ensure that you meet the necessary conditions for carrying out the activity before going any further.
You will have the opportunity to come back to the regulation afterwards with your lawyer when your project is at a more advanced stage.
Take stock of the lessons learned from your market analysis
Market research should give you a definitive idea of your business idea's chances of commercial success.
Ideally, the conclusion is that there is a market opportunity because one or more customer segments are currently underserved by the competition.
On the other hand, the conclusion may be that the market is already taken. In this case, don't panic: the first piece of good news is that you're not going to spend several years working hard on a project that has no chance of succeeding. The second is that there's no shortage of ideas out there: at The Business Plan Shop, we've identified over 1,300 business start-up ideas, so you're bound to find something that will work.
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Choosing the right concept and positioning for your lingerie shop
Once your market research is completed, it's time to consider the type of lingerie shop you want to open and define precisely your company's market positioning in order to capitalise on the opportunity you identified during your market research.
Market positioning refers to the place your product and service offering occupies in customers' minds and how they differ from competing products and services. Being perceived as the premium solution, for example.
There are four questions you need to consider:
- How will you compete with and differentiate yourself from competitors already on the market?
- Can you join a franchise to reduce the risk?
- Is it better to start or buy a lingerie shop already in operation?
- How will you validate your concept and market positioning?
Let's look at each of these in a little more detail.
How will you compete with and differentiate yourself from competitors already on the market?
When you choose to start up a lingerie shop, you are at a disadvantage compared to your rivals who have an established presence on the market.
Your competitors have a reputation, a loyal customer base and a solid team already in place, whereas you're starting from scratch...
Entering the market and taking market share from your competitors won't happen automatically, so it's important to carefully consider how you plan to establish your presence.
There are four questions to consider here:
- Can you avoid direct competition by targeting a customer segment that is currently poorly served by other players in the market?
- Can you offer something unique or complementary to what is already available on the market?
- How will you build a sustainable competitive advantage for your lingerie shop?
- Do you have the resources to compete with well-established competitors on your own, or would it be wiser to explore alternative options (more on that below)?
Also, think about how your competitors will react to your arrival on their market.
Are there franchises available for you to join?
Opening a new lingerie shop from the "ground up" is exciting because you'll enjoy more freedom and flexibility. However, you'll need to put in extra effort to establish a trustworthy brand and attract customers.
On the other hand, joining a franchise might limit your personal flexibility, but you'll be operating under an established brand name. This is likely to bring significant benefits in terms of operational processes, supplier relationships, recruitment, and more.
Of course, joining a franchise is not free: you will have to pay an entry fee and an annual royalty (generally as a percentage of sales).
And franchising opportunities vary from country to country and region to region, so there's no guarantee that you will be able to find a franchise to join.
Nevertheless, where possible, joining a franchise is generally a good way of reducing the risk associated with setting up a lingerie shop, and is well worth considering.
Is it better to start or buy a lingerie shop already in operation?
Another alternative to opening a new business is to take over a lingerie shop already trading.
Purchasing an existing lingerie shop means you get a loyal customer base and an efficient team. It also avoids disrupting the equilibrium in the market by introducing a new player.
A takeover hugely reduces the risk of the business failing compared to starting a new business, whilst giving you the freedom to change the market positioning of the business taken over if you wish.
This makes buying an existing lingerie shop a solid alternative to opening your own or operating under a franchise.
However, here again, buying a business requires more capital compared to starting a lingerie shop from scratch, as you will need to purchase the business from its current owner.
How will you validate your concept and market positioning?
Regardless of how you choose to establish your business, it's crucial to make sure that the way you position your company aligns with the expectations of your target market.
To achieve this, you'll have to meet with your potential customers to showcase your products or services and get their feedback.
Explore the ideal location to start your lingerie shop
The next stage in our guide on how to start a lingerie shop: choosing where to set up shop.
Setting up your business in the right location will have a direct impact on your chances of success, so it's a good idea to think things through before you launch.
To help you decide where to set up your business, we recommend considering the following factors:
- Visibility and foot traffic - This is important for a lingerie shop as it can attract potential customers and increase sales.
- Parking space, road and public transport accessibility - Customers may prefer to shop at a location that is easily accessible by car or public transportation, especially if they plan on making larger purchases.
- Proximity to target customers - A lingerie shop may want to be located near areas with a higher concentration of potential customers, such as shopping malls or busy downtown areas.
- Competitor presence - It is important to consider the presence of other lingerie shops in the area, as they may impact sales and competition for customers.
- Efficient logistics - For an industrial business, having efficient logistics is crucial for ensuring timely and cost-effective delivery of products to customers.
These criteria will need to be refined according to the specific features of your project.
After weighing the factors mentioned earlier, it's crucial to focus on your startup's budget. Look for a location that suits your business needs while being affordable, especially in the short term.
One of the issues that will also come up is the long-term future of your location, particularly if you opt to rent your premises rather than buy. In this case, you will need to consider the conditions for renewing the lease (duration, rent increases, etc.).
Lease agreements vary widely from country to country, so make sure you check the terms applicable to your situation and have your lawyer review your lease before you sign.
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Choosing your lingerie shop's legal form
The next step to open a lingerie shop is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your lingerie shop's legal form important?
Choosing the legal form for your lingerie shop is an important decision because this will affect your tax obligations, your personal exposure to risk, how decisions are made within the business, the sources of financing available to you, and the amount of paperwork and legal formalities, amongst other things.
The way you set up your business legally will impact your taxes and social contributions, both at a personal level (how much your income is taxed) and at the business level (how much the business's profits are taxed).
Your personal exposure to risk as a business owner also varies based on the legal form of your business. Certain legal forms have a legal personality (also called corporate personality), which means that the business obtains a legal entity which is separate from the owners and the people running it. To put it simply, if something goes wrong with a customer or competitor, for example, with a corporate personality the business gets sued, whereas without it is the entrepreneur personally.
Similarly, some legal forms benefit from limited liability. With a limited liability the maximum you can lose if the business fails is what you invested. Your personal assets are not at risk. However, not all structures protect you in such a way, some structures may expose your personal assets (for example, your creditors might try to go after your house if the business incurs debts and then goes under without being able to repay what it owed).
How decisions are made within the business is also influenced by the legal form of your lingerie shop, and so is the amount of paperwork and legal formalities: do you need to hold general assemblies, to produce annual accounts, to get the accounts audited, etc.
The legal form also influences what sources of financing are available to you. Raising capital from investors requires having a company set up, and they will expect limited liability and corporate personality.
What are the most common legal structures?
It's important to note that the actual names of legal structures for businesses vary from country to country.
But they usually fall within two main types of structures:
- Individual businesses
- Companies
Individual businesses
Individual businesses, such as sole traders or sole proprietorships, are legal structures with basic administrative requirements.
They primarily serve self-employed individuals and freelancers rather than businesses with employees.
The main downside of being a sole trader is that there's usually no legal separation between the business and the person running it. Everything the person owns personally is tied up with the business, which can be risky.
This means that if there are problems or the business goes bankrupt, the entrepreneur's personal assets could be taken by creditors. So, there's a risk of personal liability in case of disputes or financial issues.
It is also not possible to raise equity from investors with these structures as there is no share capital.
Despite the downsides, being a sole proprietorship has some advantages. There is usually very little paperwork to get started, simpler tax calculations and accounting formalities.
Companies
Companies are all rounders which can be set up by one or more individuals, working on their own or with many employees.
They are recognized as a distinct entity with their own legal personality, and the liability is usually limited to the amount invested by the owners (co-founders and investors). This means that you cannot lose more than you have invested in the business.
This separation ensures that in legal disputes or bankruptcy, the company bears primary responsibility, protecting the personal assets of the founder(s) and potential investor(s).
How should I choose my lingerie shop's legal structure?
Deciding on the legal structure is usually quite straightforward once you know how many co-founders you'll have, whether you'll have employees, and the expected revenues for the business.
A good business idea will be viable whatever the legal form you choose. How businesses are taxed changes every year, therefore one cannot rely on specific tax benefits tied to a particular structure when deciding to go into business.
One easy way to proceed is to take note of the legal structures used by your top five competitors, and assume you're going with the most commonly chosen option. Once your idea is mature and you're prepared to formally register the business, you can validate this assumption with a lawyer and an accountant.
Can I switch my lingerie shop's legal structure if I get it wrong?
You can switch your legal setup later on, even if it involves selling the old one to a new entity in some cases. However, this comes with extra costs, so it's better to make the right choice from the beginning if you can.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
How much money do I need to start a lingerie shop?
To answer this key question, we first need to look at the resources you'll need to launch your lingerie shop and keep it running on a daily basis. Let's take a look at what that entails.
Since each venture is distinct, providing an average budget for starting a lingerie shop is impossible.
We strongly advise careful consideration when reading estimates on the web. It’s best to ask yourself the following questions:
- Is my project similar (location, concept, planned size, etc.)?
- Can I trust where this information is coming from?
- Is the data fresh or stale?
Your thinking behind the investments and human resources required to launch and operate the business will then enable you to cost each item and include them in your financial forecast (which we'll look at later in this guide).
Once complete, the forecast will give you a precise idea of the initial investment required and profitability potential for your business idea.
Startup costs and investments to start a lingerie shop
Let's start with the investments. To set up a lingerie shop, initial working capital and investments can include the following items:
- Store Renovation: You may need to make significant changes to the physical space of your lingerie shop to create an inviting and attractive shopping environment. This could include things like new flooring, lighting, fixtures, and paint.
- Point-of-Sale System: Investing in a modern and efficient point-of-sale system is crucial for any retail business. This will help you keep track of sales, inventory, and customer data, as well as streamline your checkout process.
- Inventory and Supplies: As a lingerie shop, you will need to continuously invest in new inventory and supplies to keep up with changing trends and styles. This could include things like lingerie, loungewear, accessories, packaging materials, and more.
- Furniture and Decor: In addition to the physical renovation of your store, you may also need to purchase new furniture and decor to create a comfortable and visually appealing shopping experience for your customers.
- Security System: Protecting your merchandise and store is crucial, especially in the retail industry. Investing in a security system, such as cameras and alarms, can help deter theft and ensure the safety of your employees and customers.
Of course, you will need to adapt this list to your company's specific needs.
Staffing requirements to operate a lingerie shop
You'll also need to think about the staff required to run the business on a day-to-day basis.
The human resources required will vary according to the size of your company.
Once again, this list is only indicative and will need to be adjusted according to the specifics of your lingerie shop.
Operating expenses of a lingerie shop
The final point to consider when analyzing the resources required is the question of operating costs.
Operating expenses for a lingerie shop may include:
- Staff Costs: This includes salaries, benefits, and training expenses for your sales associates, fitting specialists, and other employees.
- Rent: The cost of leasing or renting a space for your lingerie shop.
- Utilities: This includes electricity, water, and other utility bills for your shop.
- Inventory: The cost of purchasing lingerie products from suppliers.
- Marketing and Advertising: This includes the cost of promoting your lingerie shop through various channels such as social media, print ads, and events.
- Insurance: The cost of insuring your shop and its contents, including inventory and equipment.
- Accountancy Fees: The cost of hiring an accountant or bookkeeper to manage your financial records and taxes.
- Software Licenses: The cost of purchasing and maintaining software programs for inventory management, sales tracking, and other business operations.
- Banking Fees: The fees associated with maintaining a business bank account, processing transactions, and using merchant services.
- Maintenance and Repairs: The cost of repairing and maintaining your shop's equipment and fixtures.
- Packaging and Shipping: If you offer online sales, this includes the cost of packaging materials and shipping fees.
- Professional Services: This includes the cost of hiring consultants or experts for legal, marketing, or other professional services.
- Training and Development: The cost of ongoing training for your employees to keep up with industry trends and customer needs.
- Credit Card Processing Fees: The fees associated with accepting credit and debit card payments from customers.
- Equipment Leasing: If you lease equipment for your shop, this includes the monthly leasing fees.
Here also, this list will need to be tailored to the specifics of your lingerie shop but should be a good starting point for your budget.
How will I promote my lingerie shop?
The next step to starting a lingerie shop is to think about strategies that will help you attract and retain clients.
Consider the following questions:
- How will you attract as many customers as possible?
- How will you build customer loyalty?
- Who will be responsible for advertising and promotion? What budget can be allocated to these activities?
- How many sales and how much revenue can that generate?
Once again, the resources required will depend on your ambitions and the size of your company. But you could potentially action the initiatives below.
Your lingerie shop's sales plan will also be affected by variations in consumer demand, like changes in activity during peak holiday seasons, and the dynamics within your competitive environment.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
Build your lingerie shop's financial forecast
The next step to start your lingerie shop: putting your financial projections together.
What is the financial forecast for a lingerie shop?
A forecast is a quantified decision-making document that shows the initial investment required to open a lingerie shop and the company's potential profitability and cash flow generation over the next 3 to 5 years.
As you think about your lingerie shop idea, the main role of financial projections will be to help you decide whether it makes sense to create the company.
Building a financial forecast helps determine the amount of initial financing required to start your lingerie shop.
In fact, creating financial projections is the only way to assess the amount of initial financing you'll need to open your lingerie shop, and to make sure your project makes economic and financial sense.
Keep in mind that very few business ideas are financially viable. At The Business Plan Shop, we've seen nearly a million business start-up ideas, and we estimate that less than one in four is economically viable.
Your forecast will therefore require your full attention and constant revision, as your project matures. It's also a good idea to simulate different scenarios to anticipate several possibilities (what happens if your sales take longer than expected to ramp up, for example), so you're ready for all eventualities.
When seeking financing, your forecast will be incorporated into your business plan, which is the document you will use to present your business idea to financial partners. We'll come back to the business plan in more detail later in this guide.
Creating and updating your lingerie shop's forecast is an ongoing process. Indeed, having up-to-date financial projections is the only way to maintain visibility over your company's future cash flow and cash position.
Forecasting is, therefore, the financial management tool that will be with you throughout the life of your company. Once you've started trading, you'll need to regularly compare the difference between your actual accounts and your forecasts, and then adjust them to maintain visibility over your future cash flows.
What does a financial projection look like?
Your lingerie shop forecast will be presented using the following financial tables.
The projected P&L statement
The projected P&L statement for a lingerie shop shows how much revenue and profits your business is expected to generate in the future.
The projected balance sheet of your lingerie shop
Your lingerie shop's projected balance sheet provides a snapshot of your business’s financial position at year-end.
The cash flow forecast
A projected cash flow statement for a lingerie shop is used to show how much cash the business is expected to consume or generate in the years to come.
What is the best financial forecasting tool for starting your lingerie shop?
The simplest and easiest way to create your lingerie shop's projections is to use professional online financial forecasting software such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
How do I choose a name and register my lingerie shop?
Now that your project of launching a lingerie shop is starting to take shape, it's time to look at the name of your business.
Finding the name itself is generally fairly easy. The difficulty lies in registering it.
To prevent this guide from being too long, we won't go into all the criteria you need to take into account when choosing a striking name for your lingerie shop. However, try to choose a name that is short and distinctive.
Once you have a name that you like, you need to check that it is available, because you cannot use a name that is identical or similar to that of a competitor: this type of parasitic behaviour is an act of unfair competition for which you risk being taken to court by your competitors.
To avoid any problems, you will need to check the availability of the name:
- Your country's company register
- With the trademark register
- With a domain name reservation company such as GoDaddy
- On an Internet search engine
If the desired name is available, you can start the registration process.
It is common to want to use the trading name as the name of the company, and to have a domain name and a registered trademark that also correspond to this name: Example ® (trading name protected by a registered trademark), Example LTD (legal name of the company), example.com (domain name used by the company).
The problem is that each of these names has to be registered with a different entity, and each entity has its own deadlines:
- Registering a domain name is immediate
- Registering a trademark usually takes at least 3 months (if your application is accepted)
- The time taken to register a new business depends on the country, but it's generally quite fast
How do I go about it?
Well, you have two choices:
- Complete all registrations at the same time and cross your fingers for a smooth process.
- Make sure to secure the domain names and trademarks. Once that's done, wait for confirmation of a successful trademark registration before moving on to register the company.
At The Business Plan Shop, we believe it's essential to prioritize securing your domain names and trademarks over the business name. This is because you have the flexibility to use a different trading name than your legal business name if needed.
Regardless, we suggest discussing this matter with your lawyer (see below in this guide) before making any decisions.
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What corporate identity do I want for my lingerie shop?
The following step to start a lingerie shop is to define your company's visual identity.
Visual identity is part of the DNA of your lingerie shop: it makes you recognizable and recognized by your customers, and helps you stand out from the competition. It also helps convey your values, notably through the choice of colors that identify the company.
Creating your business's visual identity yourself is entirely possible: there are several online tools that let you generate color palettes, choose typography and even generate logos.
However, we advise you to delegate this task to a designer or a communications agency for a professional result.
Your corporate identity will include the following elements:
- Your business logo
- Your brand guidelines
- Your business cards
- Design and theme of your website
Logo
Your lingerie shop's logo serves as a quick identifier for your company. It will be featured on all your communication platforms (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
Beyond its appearance, your logo should be easy to use on any type of support and background (white, black, gray, colored, etc.). Ideally, it should be easy to use in a variety of colors.
Brand guidelines
One of the challenges when starting a lingerie shop is to ensure a consistent brand image wherever your company is visible.
This is the role of your company's brand guidelines, which defines the typography and colors used by your brand and thus acts as the protector of your brand image.
Typography refers to the fonts used (family and size). For example, Trebuchet in size 22 for your titles and Times New Roman in size 13 for your texts.
The colors chosen to represent your brand should typically be limited to five (or fewer):
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Classic but a must-have, your business cards will be at your side to help you easily communicate your contact details to your founders, customers, suppliers, recruitment candidates, etc.
In essence, they should feature your logo and adhere to the brand guidelines mentioned earlier.
Website theme
Likewise, the theme of your lingerie shop website will integrate your logo and follow the brand guidelines we talked about earlier.
This will also define the look and feel of all your site's graphic elements:
- Buttons
- Menus
- Forms
- Banners
- Etc.
What legal steps are needed to start a lingerie shop?
The next step in opening a lingerie shop is to look in detail at the legal and regulatory formalities.
Although it is possible to do the formalities yourself and draft some of the documents detailed here, The Business Plan Shop recommends that you seek advice on these aspects from a law firm.
Registering a trademark and protecting the intellectual property of your lingerie shop
One of the first things you need to do here is to protect your company's current and future intellectual property.
One way of doing this is to register a trade mark, as mentioned earlier in this guide. Your lawyer will be in a position to do the formalities for you and to help you select the classes (economic activities) and jurisdictions in which you have an interest in obtaining protection.
Your law firm can also advise you on other ways of protecting your company's intellectual property.
Preparing the legal documents for your lingerie shop
Your lingerie shop will need a set of legal and contractual documents to operate on a daily basis.
Your exact needs in this respect will depend on the country in which you are launching your lingerie shop and the size and legal form envisaged for the company. Once again, we highly recommend having these documents prepared by your lawyer.
As a minimum, we recommend that you have the following documents prepared:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
Here too, the list of licences and business permits required for your business to operate legally will depend on the country in which you have decided to start your lingerie shop.
Your law firm will be able to advise you on all the regulations applicable to your business.
Likewise, your accountant will be able to assist you and take care of the formalities involved in complying with the tax authorities.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Create a business plan for your lingerie shop
The next step to open a lingerie shop: put together your business plan.
What is a business plan?
To keep it simple, a business plan comprises two crucial components:
- Firstly, a numerical part, the financial forecast (which we mentioned earlier), which highlights the initial financing requirements and profitability potential of the lingerie shop,
- And a written, well-argued section that presents your project in detail, aims to convince the reader of its chances of success, and provides the context needed to assess whether the forecast is realistic or not.
The business plan will enable you to verify the coherence of your project, and ensure that the company can be profitable before incurring further costs. It will also help you convince business and financial partners.
As you can see, your business plan must be convincing and error-free.
How to write a business plan for a lingerie shop?
Nowadays, the modern and most efficient way to write a lingerie shop business plan is to use startup business plan software like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for alingerie shop has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Financing the launch of your lingerie shop
Once your business plan has been written, you’ll need to think about how you might secure the funding required to open your lingerie shop.
The amount of initial financing required will of course depend on the size of your lingerie shop and the country in which you wish to set up.
Financing your startup will probably require you to obtain a combination of equity and debt, which are the primary financial resources available to businesses.
Equity funding
Equity refers to the amount of money invested in your lingerie shop by founders and investors and is key to starting a business.
Equity provides your company with stable, long-term (often permanent) capital. It also demonstrates the commitment of the company's owners to the project, since these sums can be lost in the event of bankruptcy.
Because the equity invested by the founders may be lost if the project doesn't succeed, it signals to investors and other financial institutions the founders' strong belief in the business's chances of success and might improve the likelihood of obtaining further funding as a result.
In terms of return on investment, equity investors receive dividends paid by the company (provided it is profitable) or realise capital gains by reselling their shares (provided they find a buyer interested in the company).
Equity investors are, therefore, in a very risky position. They stand to lose their initial investment in the case of bankruptcy and will only obtain a return on investment if the business manages to be profitable or sold. On the other hand, they could generate a very high return if the venture is a financial success.
Given their position, equity investors are usually looking to invest in business ventures with sufficient growth and profitability potential to offset their risk.
From the point of view of the company and its creditors, equity reduces risk, since equity providers finance the company and are only remunerated in the event of success.
From a technical standpoint, equity consists of:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Personal contribution from the founders' savings.
- Private investors: business angels, friends and family.
- Crowdfunding campaigns to find investors or collect donations (usually in exchange for a gift).
- Government initiatives such as loans on favourable terms to help partners build up their start-up capital.
Debt funding
Another option for partially funding your lingerie shop is to borrow.
By definition, debt works in the opposite way to equity:
- Debt needs to be repaid, whereas equity is permanent.
- Lenders get a contractually guaranteed return, whereas equity investors only generate a return if the company is a success.
When a company borrows money, it agrees to pay interest and repay the borrowed principal according to a pre-established schedule. Therefore, lenders make money regardless of whether the company is profitable and their main risk is if the company goes bankrupt.
To limit their risk, lenders are usually conservative and cautious in their approach. They only finance projects where they are confident that they will be repaid in full.
Companies borrow in two ways:
- Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
- Against their future cash flows: the bank evaluates the company's financial forecast to estimate its borrowing capacity and assesses the conditions (amount, interest rate, term, etc.) on which it is prepared to lend, taking into account the credit risk posed by the company.
It's difficult to borrow against future cash flow when setting up a lingerie shop, because the business doesn't yet have historical data to reassure lenders about the credibility of the forecasted cash flows.
Borrowing against assets is, therefore, often the only option available to entrepreneurs. What's more, the assets that can be financed with this option must be easy to resell, in the unfortunate event that the bank is forced to seize them, which may limit your options even further.
In terms of possible sources of borrowing, the main sources here are banks and credit institutions. Bear in mind, however, that each institution is different, both in terms of the risk it is prepared to accept and in terms of how the risk of your project will be perceived and what items it will agree to finance.
In some countries, it is also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.
Things to remember about financing a lingerie shop
There are various ways you can raise the initial financing you need to open your lingerie shop. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the package.
Launching your lingerie shop and monitoring progress against your forecast
Once you’ve secured financing, you will finally be ready to launch your lingerie shop. Congratulations!
Celebrate the launch of your business and acknowledge the hard work that brought you here, but remember, this is where the real work begins.
As you know, 50% of business start-ups do not pass the five-year mark. Your priority will be to do everything to secure your business's future.
To do this, it is key to keep an eye on your business plan to ensure that you are on track to achieve your goals.
No one can predict the future with certainty, so it’s likely that your lingerie shop's financial performance will differ from what you predicted in your forecast.
This is why it is recommended to make several forecasts:
- A base case (most likely)
- An optimistic scenario
- And a pessimistic scenario to test the robustness of your financial model
If you follow this approach, your numbers will hopefully be better than your optimistic case and you can consider accelerating your expansion plans. That’s what we wish you anyway!
If, unfortunately, your figures are below your base case (or worse than your pessimistic case), you will need to quickly put in place corrective actions, or consider stopping the activity.
The key, in terms of decision-making, is to regularly compare your real accounting data to your lingerie shop's forecast to:
- Measure the discrepancies and promptly identify where the variances with your base case come from
- Adjust your financial forecast as the year progresses to maintain visibility on future cash flow and cash position
There is nothing worse than waiting for your accountant to prepare your year-end accounts, which can take several months after the end of your financial year (up to nine months in the UK for example), to realise that the performance over the past year was well below the your base case and that your lingerie shop will not have enough cash to keep running over the next twelve months.
This is why using a financial forecasting solution that integrates with accounting software and offers actuals vs. forecast tracking out of the box, like the financial dashboards we offer at The Business Plan Shop, greatly facilitates the task and significantly reduces the risk associated with starting a business.
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Key takeaways
- There are 15 key steps to opening a lingerie shop.
- Your financial forecast will enable you to accurately assess your initial financing requirements and the potential profitability of your project.
- Your business plan will give your financial partners the context they need to be able to judge the consistency and relevance of your forecast before deciding whether or not to finance the creation of your lingerie shop.
- Post-launch, it's essential to have an up-to-date forecast to maintain visibility of your business's future cash flows.
- Using a financial planning and analysis platform that integrates forecasts, business plans and actual performance monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.
We hope this guide has helped you understand how to open a lingerie shop. Please don't hesitate to contact us if you have any questions or want to share your experience as an entrepreneur.
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Founder & CEO at The Business Plan Shop Ltd
