You might decide to buy an existing lingerie shop rather than starting from scratch. Buying a going concern can mean that:
- the premises, business equipment and shop fittings are already in place
- there are established customers
- the business can generate income immediately
- suppliers have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- staff are already in place
- a business website has already been set up
However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.
Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- the state of the premises, fittings, equipment and so on. Will you have to spend money refurbishing or replacing assets
- the condition and value of any stock you are buying. Check this over carefully before agreeing a price - you don't want to pay for unfashionable or shop soiled items
- is the existing owner prepared to give you some training after you take over - for example, in bra fitting
- existing staff rights
- how to retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.
Franchising can be a good 'halfway house' between starting out from scratch and buying an existing business. If you purchase a franchise you'll still be setting up your own business, but you should benefit from the experience, resources and perhaps the name of a business that is already successful.
There are a few franchises available for lingerie retailers - a web search for 'lingerie retail franchise' should turn up some potential opportunities.
Although different franchise schemes vary in detail, most feature the following key points:
- as a franchise holder, you'll remain self employed but you'll use the identity (corporate colours, logos, trade name and so on) of the franchisor
- in return, you'll pay the franchisor a fee - this might be a one-off investment, a monthly charge, or a combination of both
- both you and your franchisor will have to fulfil certain obligations and maintain certain minimum standards
You'll probably have to buy some or all of your stock from your franchisor.
Some franchisors will provide you with training, as well as help with advertising and marketing and advice and support on a range of business and technical matters.
Details of the above points are set out in the franchise agreement or contract, which both you and your franchisor will sign. The agreement will also deal with other matters, for example any territorial exclusivity due to you and the minimum period for which the franchise will run.
Before entering into a franchise agreement, it's advisable to check the terms carefully to be sure that you're getting a reasonable deal. Go through the contract with your solicitor before signing anything. Try to find out more about the reputation of the franchisor's business - both among past and present franchisees and among members of the public.
More information about franchising is available on the Franchise Info website. Information is also available from the British Franchise Association (BFA).