Start a Resale Business
From Treasure Hunting to Profit Making: The Resale Business Journey
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RESALE BUSINESS
Is your garage more of an occasional museum to forgotten wares than an actual car-home? Then a resale business may just be your winning lottery ticket! Essentially, a resale business searches for hidden gems in thrift stores, garage sales, or online platforms, and sells them to an eager market willing to treasure these second-hand goods. With keen eyes and a knack for value, your hobby of treasure hunting can transform into a thrilling entrepreneurship journey in the resale world. Just remember - in this trade, one man's trash is certainly another man's profit!
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RESALE MINI BUSINESS PLAN
This a quick reality check to help you identify the strengths and weaknesses of your business concept before you dive in.
Inventory Acquisition & Management:
- Sourcing: Establish connections with wealthy area estates, thrift stores, flea markets, garage sales, auctions, or directly from clients.
- Pricing: Develop a knack for accurate valuation and pricing of items for resale, aim to sell for double what you paid to maintain profit margins.
- Inventory Turnover: Aim to keep inventory fresh and rotating, sell items quickly to free capital for new purchases.
Marketing and Customer Acquisition:
- Photography: High-quality images and descriptions of items for online sales.
- Online Platforms: Consider platforms like eBay, Etsy, Poshmark, depending on items sold.
- Local Advertising: Budget for online and potentially print ads in local newspapers or on community bulletin boards.
Sales and Customer Relations:
- Customer Service: Offer service with a smile, prompt and reliable response to queries.
- Bargaining: Be open to price negotiations while keeping a keen eye on your bottom line.
Cost Control:
- Shipping Costs: Find efficient and cost-effective methods of packing and shipping items for online sales.
- Utilities and Maintenance: Budget for cleaning, maintenance, and utilities costs.
Business Operations:
- Business Hours: If running a brick-and-mortar shop, open at least 6 days a week, 8-10 hours.
- Transaction Volume: Aim for 10-20 transactions per day at an average sale price of $20-$40.
These are generalized estimations and can vary depending on location, quality and type of goods sold, economic conditions, and individual business strategies. Always consult with a financial advisor for personalized advice.
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Grab Your Business Website Name
Before you get caught up in the whirlwind of setting up your business, invest in a domain name. It's a small but significant step that lays the foundation for your brand and makes it easier for customers to find and trust you. Just like you wouldn't build a house without securing the land first, don't build a business without securing your domain name.
"Why? Can't that wait?" Here's why it shouldn't
Step 1: Determine if a Resale Business is Right for You
Breakdown of Startup Expenses
Before taking the plunge and starting a resale business, it is important to understand the startup costs associated with the venture. This includes the cost of inventory, the cost of any necessary equipment, the cost of any licenses or permits, and the cost of any marketing materials. It is also important to factor in the cost of any additional help that may be needed to get the business up and running. It is important to be aware of all of these costs and to be prepared to pay them before starting the business.
Breakdown of Ongoing Expenses
In addition to the startup costs, it is important to understand the ongoing expenses associated with running a resale business. This includes the cost of inventory, the cost of any necessary equipment, the cost of any licenses or permits, and the cost of any marketing materials. It is also important to factor in the cost of any additional help that may be needed to keep the business running. It is important to be aware of all of these costs and to be prepared to pay them on a regular basis.
Examples of Ways to Make Money
Once the startup and ongoing expenses have been taken into consideration, it is important to understand the different ways to make money with a resale business. This includes buying and selling items, offering consignment services, and offering repair services. It is important to understand the different ways to make money and to be prepared to offer these services to customers. Additionally, it is important to understand the different ways to market the business and to be prepared to use these methods to reach potential customers.
Step 2: Name the Business
Naming a business is an important step in the process of starting a resale business. It is important to choose a name that is memorable and reflects the type of business that is being started. It is also important to make sure that the name is not already taken by another business. To do this, it is important to research the name to make sure it is available to use. Additionally, it is important to make sure that the name is not too long or complicated, as this could make it difficult for customers to remember.
When choosing a name, it is important to consider the type of business that is being started. For example, if the business is selling vintage clothing, it may be beneficial to choose a name that reflects this, such as “Vintage Finds” or “Retro Boutique”. Additionally, it is important to make sure that the name is easy to spell and pronounce, as this will make it easier for customers to find the business.
Once a name has been chosen, it is important to register the business name with the local government. This will ensure that the name is legally protected and that no other business can use it. Additionally, it is important to check if the name is available as a domain name, as this will make it easier for customers to find the business online.
Finally, it is important to make sure that the business name is being used consistently across all marketing materials, such as business cards and websites. This will help to ensure that customers will be able to easily recognize the business and remember the name.
Step 3: Choose a Business Structure
Choosing the right business structure is an important decision for any business owner. It can affect how much you pay in taxes, how much liability you have, and how much paperwork you need to file. The most common business structures are sole proprietorship, partnership, limited liability company (LLC), and corporation. Each has its own advantages and disadvantages, so it’s important to consider your options carefully.
Sole Proprietorship: A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities. The main advantage of a sole proprietorship is that it’s easy to set up and you don’t need to pay any fees or file any paperwork. The main disadvantage is that you are personally liable for any debts or liabilities incurred by the business.
Partnership: A partnership is similar to a sole proprietorship, but with two or more people involved. Each partner contributes money, property, labor or skill, and shares in the profits and losses of the business. The partners are personally liable for any debts or liabilities incurred by the business. The main advantage of a partnership is that it’s easy to set up and you don’t need to pay any fees or file any paperwork. The main disadvantage is that each partner is personally liable for the debts and liabilities of the business.
Limited Liability Company (LLC): An LLC is a business structure that combines the pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation. This means that the business is not liable for the debts and liabilities of its owners. The main advantage of an LLC is that it offers limited liability protection for its owners. The main disadvantage is that it can be more expensive to set up and maintain than a sole proprietorship or partnership.
Corporation: A corporation is an independent legal entity owned by shareholders. The corporation itself, not the shareholders, is held liable for the debts and liabilities of the business. The main advantage of a corporation is that it offers limited liability protection for its owners. The main disadvantage is that it can be more expensive to set up and maintain than a sole proprietorship or partnership. Additionally, corporations are subject to double taxation, meaning that the corporation pays taxes on its profits and then the shareholders pay taxes on the dividends they receive.
No matter which business structure you choose, it’s important to understand the pros and cons of each and make an informed decision. It’s also important to consult with a lawyer or accountant to make sure you’re making the right choice for your business.
Step 4: Obtain Licenses and Permits
Before starting a resale business, it is important to research the necessary licenses and permits that may be required. Depending on the type of business, the location, and the products being sold, there may be a variety of licenses and permits needed. For example, a business selling food products may need a food handler’s license, a business selling alcohol may need an alcohol license, and a business selling firearms may need a firearms license. Additionally, some local governments may require a business license or permit to operate. It is important to research the specific requirements for the business and its location to ensure that all necessary licenses and permits are obtained.
Obtain Necessary Licenses and Permits
After researching the necessary licenses and permits, the next step is to obtain them. Depending on the business and its location, this may involve submitting an application and paying a fee. It is important to submit the application and pay the fee as soon as possible to ensure that the business is able to open on time. Additionally, some licenses and permits may require renewal after a certain amount of time, so it is important to be aware of any renewal requirements.
Keep Licenses and Permits on File
Once the necessary licenses and permits have been obtained, it is important to keep them on file. This will ensure that the business is able to produce them if needed. Additionally, it is important to keep track of any renewal requirements to ensure that the licenses and permits remain valid.
Consult with an Attorney
Finally, it is important to consult with an attorney to ensure that all licenses and permits are obtained correctly. An attorney can provide advice on the specific requirements for the business and its location, and can help ensure that all necessary licenses and permits are obtained. Additionally, an attorney can provide advice on any other legal matters related to the business.
Step 5: Open a Business Bank Account
Opening a business bank account is essential to any business. It provides a way to separate personal and business finances, which is important for tax purposes. It also allows you to keep track of expenses, income, and profits. Additionally, a business bank account can provide access to business credit, which can be used to finance larger purchases.
How to Open a Business Bank Account
The first step in opening a business bank account is to choose a bank. Consider the fees, services offered, and convenience of the bank. Once you have chosen a bank, you will need to provide the bank with information about your business, such as the type of business, the business name, and the business address. You will also need to provide personal information, such as your Social Security number, and proof of identity. Once the bank has all the necessary information, they will open the account and provide you with a debit card and checks.
Maintaining the Business Bank Account
Once the business bank account is open, it is important to keep it in good standing. This means regularly checking the account to ensure that all transactions are accurate and that there is enough money in the account to cover any expenses. Additionally, it is important to keep track of all deposits and withdrawals, and to reconcile the account regularly. Finally, it is important to remember to pay any fees associated with the account on time.
Step 6: Create a Business Plan
Creating a business plan is an important step in the process of starting a business. A business plan is a document that outlines the goals of the business, the strategies and tactics to reach those goals, and the resources needed to achieve the goals. A business plan should include the following components:
Executive Summary: This section should provide a brief overview of the business, its goals, and the strategies and tactics to reach those goals.
Market Analysis: This section should provide an analysis of the current market and the potential for the business. It should include an analysis of the competition, the target market, and the potential for growth.
Business Model: This section should provide an overview of the business model, including the products and services offered, the pricing structure, and the methods of delivery.
Financial Plan: This section should include a breakdown of the startup expenses, the ongoing expenses, and the potential sources of revenue. It should also include a financial projection for the first three years of operation.
Management Plan: This section should provide an overview of the management team and the roles and responsibilities of each team member.
Implementation Plan: This section should outline the steps necessary to launch the business, including the timeline and the resources needed.
Risk Management Plan: This section should outline the potential risks associated with the business and the strategies to mitigate those risks.
Writing the Business Plan
Writing a business plan can be a daunting task, but it is an important step in the process of starting a business. It is important to take the time to research and understand the market, the competition, and the potential for growth. It is also important to include a financial plan and a risk management plan. Once the business plan is written, it should be reviewed by a professional to ensure that it is accurate and complete.
Step 7: Set Up Accounting System
Setting up an accounting system is essential for any business, regardless of size. An accounting system can help you keep track of your income and expenses, as well as provide a way to track the progress of your business. Having an accounting system in place can also help you make better decisions about your business, as you will have a better understanding of your financial situation.
Types of Accounting Systems
There are several types of accounting systems available, including manual, computerized, and cloud-based systems. Manual systems are the most basic and involve keeping track of your finances with paper and pencil. Computerized systems are more advanced and allow you to store and analyze your financial data electronically. Cloud-based systems are the most advanced and allow you to access your financial data from anywhere with an internet connection.
Choosing the Right Accounting System
When choosing an accounting system, it is important to consider your business needs and budget. Manual systems are the least expensive, but they require more time and effort to maintain. Computerized systems are more expensive, but they are easier to use and provide more features. Cloud-based systems are the most expensive, but they offer the most features and are the most convenient.
Setting Up Your Accounting System
Once you have chosen the right accounting system for your business, you will need to set it up. This process usually involves creating accounts, entering financial data, and setting up reports. It is important to make sure that your accounting system is set up correctly, as this will ensure that your financial data is accurate and up-to-date. Additionally, you should make sure that you are familiar with the features of your accounting system, as this will make it easier to use and understand.
Step 8: Market Your Business
When it comes to marketing your business, there are a variety of ways to do so. You can use traditional methods such as print, radio, and television advertising, or you can use more modern methods such as social media, email marketing, and search engine optimization. You can also use word-of-mouth marketing, which is one of the most effective forms of marketing. Additionally, you can use promotional items such as t-shirts, mugs, and other items to help spread the word about your business.
Develop a Brand
Developing a brand for your business is essential to its success. Your brand should reflect the values and mission of your business and should be used consistently across all of your marketing materials. Your brand should be unique and memorable, and should be used to differentiate your business from your competitors. Additionally, you should create a logo for your business that will help to further solidify your brand.
Utilize Online Resources
In today's digital age, there are a variety of online resources that can help you to market your business. You can create a website for your business, and use search engine optimization to make sure that your website is easily found by potential customers. You can also use social media to reach a wider audience and to engage with potential customers. Additionally, you can use online advertising platforms such as Google Ads and Facebook Ads to target potential customers.
Develop a Network
Developing a network of contacts is essential to the success of your business. You should reach out to other businesses in your industry, as well as potential customers, to build relationships and to spread the word about your business. Additionally, you should attend industry events and conferences to make connections and to learn more about the industry. Finally, you should consider joining local business organizations to further expand your network.
Step 9: Monitor Your Business
Monitoring your business is an important step in the process of starting a resale business. It helps you stay on top of your finances, track customer feedback, and ensure that you are meeting your goals. Here are some tips for monitoring your business:
Track Your Finances: Keeping track of your finances is essential for any business. Make sure you have a system in place to track your income and expenses. This will help you make sure you are staying on budget and that you are making a profit.
Analyze Your Sales: Analyzing your sales data can help you understand what products are selling and what products are not. This will help you make decisions about what products to stock and what products to discontinue.
Monitor Customer Feedback: Customer feedback is an important part of any business. Make sure you are monitoring customer feedback and responding to any complaints or concerns. This will help you build customer loyalty and ensure that your customers are happy with your products and services.
Set Goals: Setting goals for your business can help you stay on track and ensure that you are meeting your objectives. Make sure you are setting realistic and achievable goals and that you are tracking your progress towards those goals.
Evaluate Your Performance: Evaluating your performance is an important part of any business. Make sure you are regularly evaluating your performance and making changes as needed. This will help you stay on track and make sure that you are meeting your goals.
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