Is opening children's store a reasonable investment?

The economic situation in which the whole world finds itself today is quite unstable. So you're wondering if now is the time to take steps to open a children's store. Whether this investment is reasonable or you risk investing a lot of money in a business that will die in just a few months.

What do studies on the world market for children's goods show?

According to data from market analysis globally, the trade in children's goods is one of the most stable businesses in the world. Studies show that the market for children's goods is extremely stable even in the context of the global economic crisis. According to analysts in 2020, revenues in the segment of children's goods and clothing is estimated to reach a value of 297 billion dollars.

Of course, the domestic market is small and the profits generated in our country are much smaller, but it is a fact that with each passing year, the percentage of revenues in the segment increases by about 4 - 5%.

What is the reason for the stable growth in the sales of children's goods?

There are several factors that are influencing the growing demand and purchase of children's goods:

Demographic

An increasing number of parents decide to have older children when they already have a career, a higher income and attained economic stability. They can afford to buy more often and more expensive children's goods without having to calculate whether the purchase is affordable for them or not.

Change in buying attitude

Another leading factor is the change in the attitude of parents when buying children's goods. In the last few years, more and more parents are looking to buy clothes for their children that mimic the adult fashion industry. Parents want their children, regardless of their age, to be dressed in clothes and use goods that follow fashion trends.

Unconditional parental love

Whether parents have a high income or not, it doesn't matter when they have to make sure their children have everything they need, such as clothes, shoes and toys. They may be deprived of a purchase for themselves, but they do their best to keep their children well dressed and have the toys they want.

In other words, investing in opening a children's store is a very insightful and sensible decision. However, there is always a "but". And in this case, if you want to have not just a small business, but a business that brings you profits, you need to have a clear concept and a good business plan to follow.

How to prepare a concept for opening a children's store so that it is profitable?

A clear concept is essential for any successful entrepreneur. It outlines the specifics of your business and by preparing it, you will find both the unknown and the answers you are looking for.

The important questions you need to find above all else are the following:

What is your target audience?

It is very important whether you want to sell goods for children in a certain age group or you want to cover all age groups. It's entirely up to you, but if you want to "adjust your watch" you should know that surveys of the most successful children's stores show that the biggest profits are generated by stores that offer goods for children from 0 to 15 years of age.

What do you want to sell?

It is good to know whether you want to sell only children's clothes, only toys or you want your store to have everything for the baby and the child - from clothes to toys, room furniture, cosmetics, etc. This issue ought to be clarified in advance, because it subsequently affects both investment and costs.

Who are your competitors?

Getting to know the competition gives you the huge advantage of developing your own concept and doing something different to attract customers. Therefore, it is good to carefully study the competition, to note its strengths and weaknesses and to think about how to make your store successful in this highly competitive environment.

What employees do you hire?

Often businesses fail not because they do not offer quality and diverse goods, but because the employees they hire are not qualified enough or do not have an approach to buyers. If you want your store to attract customers, select your staff very carefully.

How to calculate your investments and expenses yourself and prepare a good business plan?

The amount of investment depends on the planned amount of working capital, so each business plan is strictly individualistic. However, we can give some sample guidelines to apply when preparing your business plan.

Costs and investments

When preparing the business plan you need to anticipate the amounts you will need to cover the following costs:

• For company registration - this cost is one-time and is probably the smallest cost you need to anticipate
• To hire an accountant or an accounting firm - you will work with the accountant for a long time, so you need to provide and set aside money to cover payments to him for at least a few months ahead
• For renting a room - usually when renting a room, the owners require you to pay a minimum rent for one month + one rent in full as a deposit. To be more relaxed, however, it is good to anticipate and set aside money for rent for at least another 6 months
• For employee salaries - salary costs depend on how many employees you want to hire and what salaries you are willing to give them
• For insurances, taxes, etc. - insurances are obligatory payments, which are determined on the salary you give to the employees, and the taxes are formed on the basis of the sales, which you have generated and reported during the month.
• To renovate the room - if the room you rented needs renovation or refreshment, you must have the means to make it friendly to customers
• For the purchase of equipment - the equipment of the store is one of the big items in the column "costs". To know how much you have to pay, it is good to decide in advance what equipment you need and look at the offers of the companies that offer it.
• To buy a product - without buying the right product there will be nothing to sell. That is why this cost is the highest. How much it will cost you to initially load the store with goods depends on what goods you sell and whether you want to keep large quantities of goods in stock or you have bet on a trusted supplier
• Advertising costs - without proper advertising, no matter how well selected and arranged your product is, the store will not be able to stay in the competition for very long. Depending on the capabilities and the ways in which you want your business to be advertised, the funds you need to set aside are from a few hundred to several thousand
• Overheads - this column includes all costs for electricity, heating, water, maintenance, telephones, etc.

Once you know how much the initial costs are, it's time for the investment you have.

You have several options for securing the necessary investments:

• Personal savings - this is the best possible way and if you have enough personal funds to invest in opening a store, do not hesitate to act
• Bank lending - all banks offer business development loans, so you can consider taking a bank loan to open a store. This option may not be the most profitable, but it is often the only solution for most start-ups
• Finding partners - if you have some own funds, but they are not enough, you can find a partner to invest in your common business

Once you have the necessary investment and once you know what the costs are, make calculations to see what free funds you have, after you paying for everything else and getting the store to take off. To be fully prepared for any situation, all financial experts advise you to charge an amount that can cover your expenses for at least the next 6 months.