Second Chance Consignment Boutique

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Executive Summary

Second Chance Consignment Boutique is a consignment and resale boutique in Pennsylvania. We sell gently used women's, men's and children's clothing, shoes and accessories, mostly on consignment from people in our community, plus items we buy outright or receive as donations, and we sell online and at pop-up events. Shoppers find good brands at fair prices, and sellers earn money from closets they have outgrown.

Why this fits. Families are watching their budgets, and many want quality clothes without paying full price. Many also have closets full of clothing they no longer wear. A friendly, organized shop that pays sellers fairly, prices items clearly and keeps the racks fresh gives both sides a reason to come back, and it keeps useful clothing out of the trash.

Here is what our numbers show. In Year 1 we plan to sell about 9,500 consignment items, 5,000 items bought outright or donated and 700 online and pop-up orders, which is about 50 items a day. That brings in sales of $325,400, growing to $770,014 by Year 5 as the shop builds a loyal base of sellers and shoppers. We expect a profit of about $9,000 in Year 1, then a profit of about $36,600 in Year 2, $77,800 in Year 3 and $125,700 by Year 5. Rent and pay are our largest costs, and the plan counts all of them.

We need $98,000 in total. Of that, $54,700 is startup costs (racks and fixtures, a point-of-sale and consignment system, steamers, security cameras, the lease deposit, a license, signs, opening stock and insurance), and the rest is cash for the first months. I am putting in $58,000 of my own savings and asking for a $40,000 small business loan.

I am Gloria Simmons, the owner and store manager, with nine years in retail, including five years managing a resale store where I priced items, trained staff and handled consignors. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Second Chance Consignment Boutique is a small, independently owned consignment and resale boutique in Pennsylvania, planned as a limited liability company (LLC). We serve shoppers and sellers in our town and the neighborhoods around it from a leased storefront on a busy street.

Our mission. To make quality clothing affordable, give closets a second life and treat every seller and shopper with respect.

What we believe. Fair is fair. Sellers should know how items are priced, how long they stay on the floor and when they get paid. Shoppers should be able to trust that items are clean, in good condition and priced honestly. We keep the shop bright and organized and make every customer feel welcome, no matter her or his budget.

What we offer:
- Consignment. Sellers bring in clothing, shoes and accessories by appointment. We price what we accept, display it for 60 to 90 days and pay the seller about half of the sale price.
- Bought-outright and donated items. Items we buy for a flat price or receive as donations, sold at a low price for budget shoppers.
- Online and pop-up sales. Photos of favorite items on our website and social media, and pop-up tables at schools, churches and community events.
- Seasonal events. Back-to-school, prom and holiday sales and a sellers' appreciation day.

Who we serve. Families on a budget, teens, college students, people who want unique finds and sellers who want to clear their closets.

What we do not do. We do not accept stained, damaged, counterfeit or recalled items, mark items up unfairly or keep a seller's money past the payout date.

How we are run. I am the owner and store manager and I work the floor and intake desk. Two sales associates, counted as full-time equivalents, work with me from Year 1. An intake and pricing specialist joins in Year 2 and more associates join as we grow. An accountant keeps the books.

Where things stand today. We have toured two storefronts and have a lease offer on one, quotes for the fixtures and software, a consignment agreement reviewed by an attorney and about 40 people who said they would bring in clothing when we open. (Replace this with where you really are.)

Problem & Opportunity

Clothes for growing children and busy families are expensive, and most households have a closet full of items they no longer use. Selling them online takes time, photos, messages and shipping. Many people give up and donate the items for no money. Shoppers, in turn, find that many thrift stores are disorganized and that new stores are too pricey.

Resale shops can also run into trouble. Without clear rules, sellers may feel they were not paid fairly or on time. Prices may be inconsistent, and a messy shop can feel unwelcoming. Stock can grow stale if it does not turn over.

For a new owner, the hard parts are finding a good location, getting enough quality items on the racks before opening, pricing items correctly and building trust with sellers. A shop with sparse racks does not attract shoppers, and a shop with no shoppers does not attract sellers.

We want to be clear about what we know and do not know. Resale is a real and growing way for families to save money, and a well-run shop earns loyal customers. We do not know how fast our racks and customers will build, so our plan starts with a small profit at best and enough cash for the early months. We will use current local numbers on households and competing shops in our final plan and will not overstate them.

Products & Services

Second Chance Consignment Boutique will give sellers an easy way to earn money from their closets and shoppers a clean, organized place to find good items at fair prices.

How it works, step by step:
1. Appointment. A seller books an intake time online or by phone and brings items that are clean, in season and in good condition.
2. Intake. We review the items, accept what fits our standards and explain what we cannot take.
3. Price. We price each item against what similar items sell for, and we tag it with the seller's number and the date.
4. Display. Items are hung by size and category, and we rotate new items to the front every few days.
5. Markdown schedule. Prices drop on a set schedule, for example 25 percent at 30 days and 50 percent at 60 days, so shoppers know what to expect and stock turns over.
6. Sell. Shoppers pay at the counter or online. Sold items are recorded automatically in the consignment system.
7. Pay the seller. Sellers receive about half of the sale price, paid monthly by check or store credit with a clear statement.
8. Donate or return. After 90 days, unsold items are returned or donated, according to the seller's choice.

Why this approach is strong. Clear rules and prompt payment build trust with sellers, and a clean, fresh floor brings shoppers back.

Market Analysis

Who we serve: families, teens, college students and bargain hunters in our town and the neighborhoods around it, and sellers with clothing to clear out.

Our primary group is parents who buy children's and women's clothing and want quality at lower prices. Our secondary group is teens and students looking for unique styles and sellers who want a way to earn from clothes they no longer need. We will use the most recent local numbers on households, schools and competing shops in our final plan.

How we sized our plan. We plan about 9,500 consignment items sold, 5,000 bought-outright or donated items sold and 700 online and pop-up orders in Year 1, about 50 items a day, growing to 18,800, 10,200 and 2,500 by Year 5, about 100 items a day. Our Year 1 prices are about $24 per consignment item, $15 per bought or donated item and $32 per online order, rising about 3% a year.

Demand data. About 40 people who said they would bring in clothing cover part of the first racks. We do not count on any one seller or shopper. Sales are strongest in spring, back-to-school and before the holidays, and weaker in the middle of summer.

We do not take everything. We decline items that are out of season, stained, torn or not in demand, and we say so kindly.

Competitive Landscape

Other choices for sellers and shoppers, and what makes us different.

- National thrift stores. They have low prices and many donations. We offer a cleaner, better organized shop and pay sellers.
- Other consignment shops. Some are very good. We compete on fair pay, fast payouts and a pleasant shop.
- Online resale apps and marketplaces. They reach more people. We save sellers the time of photos, messages and shipping.
- Big box stores and discount retailers. They offer new clothes at low prices. We offer brand names and unique pieces.
- Garage sales and hand-me-downs. They are free but occasional. We offer a place to shop every week.

What makes us different.
- Clear consignment rules and a monthly statement.
- A bright, organized shop with items sorted by size.
- A set markdown schedule that shoppers can count on.
- Pop-up events at schools and churches.

What we do not claim. We are new. Larger shops have more space and more stock. We plan to earn trust one seller and one shopper at a time.

Marketing & Sales Strategy

How we will reach customers.

Sellers. We will hold a pre-opening drive at schools, churches and community groups, give new sellers a bonus on their first items and hand out a one-page guide on how to prepare clothing.

Shoppers. A grand opening sale, social media photos of new arrivals twice a week and flyers at schools, daycare centers and laundromats.

Pop-ups and partners. We will hold pop-up tables at school events, church bazaars and community fairs and partner with a local nonprofit for a clothing donation day.

Online. A website with an item gallery, a Google business listing, reviews and an email list for new arrivals and sales.

Pricing. About $24 per consignment item, $15 per bought or donated item and $32 per online order in Year 1, with a set markdown schedule.

Operations Plan

How the business will run.

Setup (the 2 to 3 months before opening). We will form the LLC, get an EIN, open a business bank account, sign the lease, get the business license and sales tax registration, install racks, fixtures and the point-of-sale and consignment system, collect consignment items from the first sellers, price and display about 1,500 items and hire and train staff.

The shop. A leased storefront of about 1,500 square feet. Rent is $40,800 a year in Year 1.

Staffing. In Year 1: I serve as owner and store manager. Two sales associates, counted as full-time equivalents and paid $25,000 a year each, work with me. They grow to 3 in Year 2, 3.5 in Year 3, 4 in Year 4 and 4.5 in Year 5. An intake and pricing specialist, paid $27,000 a year, joins in Year 2.

Costs. Seller payouts and direct costs are about $12.50 per consignment item, $2.50 per bought or donated item and $11 per online order in Year 1. Utilities are about $5,400 a year, insurance about $2,600, card processing fees about $6,000, marketing and consignor events about $5,400, software and website about $1,800 and hangers, bags, tags and shop supplies about $2,800.

Quality. We inspect every item, wash or steam as needed, keep the floor sorted and tidy and remove items that do not sell after 90 days.

Payments. Almost all sales are paid at the counter or online by card, so cash arrives right away. Sellers are paid monthly.

Insurance. We carry general liability, property, workers' compensation and coverage for consigned goods.

Management & Organization

The people who will run Second Chance Consignment Boutique.

Gloria Simmons, owner and store manager. Nine years in retail, including five years managing a resale store, where she priced items, trained staff, handled consignors and set up displays. She leads buying, pricing, staffing and finance. (Replace this paragraph with your own background.)

Sales associates (from Year 1). Help shoppers, run the register and keep the floor fresh.

Intake and pricing specialist (from Year 2). Reviews consignment items, prices them and manages the markdown schedule.

Outside advisors. A bookkeeper, an accountant, an attorney, an insurance broker, a local nonprofit director and a free mentor from SCORE or the Small Business Development Center.

Staff pay in this plan is a full year per person: owner and store manager $38,000, sales associate $25,000 per full-time equivalent and intake and pricing specialist $27,000. Replace them with the pay you can offer where you live.

Milestones Narrative

Our goals and when we plan to reach them.
- Before opening (2 to 3 months ahead): sign the lease, get the business license and sales tax registration, install racks and the point-of-sale system, collect consignment items from at least 40 sellers, price and display about 1,500 items and hire and train staff.
- Year 1: about 50 items a day and a growing list of sellers; $325,400 in sales and a profit of about $9,000.
- Year 2: about 70 items a day, a third sales associate and an intake and pricing specialist; $484,718 in sales and a profit of about $36,600.
- Year 3: about 84 items a day and a half-time sales associate added; $603,705 in sales and a profit of about $77,800.
- Year 4: about 94 items a day and a fourth sales associate; $694,287 in sales and a profit of about $105,400.
- Year 5: about 100 items a day and online sales of about 2,500 orders; $770,014 in sales and a profit of about $125,700.
Growth depends on winning and keeping customers, so treat the later years as goals, not promises.

What we check every week: items sold per day, new items accepted, items marked down, seller payouts due, online orders, labor hours and cash in the bank.

Funding Request

How much we need and how we will use it. Total we are raising: $98,000.

How we got that number. The Funding Need Calculator in this plan adds up three things:
- Startup costs of $54,700, listed item by item in the Startup Costs section: $14,500 for clothing racks, shelving, fitting rooms and counter; $5,200 for point-of-sale and consignment software, tag printer and computer; $3,300 for garment steamers, hangers system and cleaning equipment; $3,000 for security cameras and tag system; $7,200 for lease deposit and first month of rent; $600 for business license and sales tax registration; $2,800 for attorney: consignment agreement, lease review and LLC setup; $5,500 for sign, branding and a website; $6,000 for opening stock bought outright, plus bags, tags and supplies; $2,800 for insurance down payment; $3,800 for consignor drive and grand opening ads.
- The cash the business uses before it breaks even, about $0. Sales cover the daily costs of the shop once the doors open, so the cash we need up front goes mostly to the fixtures, deposit and opening stock, which are counted in the startup costs.
- A cash cushion of about $41,300: three months of Year 1 operating costs.
- Together, the cash used before break even and the cushion come to about $41,300, and the three pieces add up to about $96,050, rounded up to the nearest $500: $96,500.
We are raising $1,500 more than that, $98,000 in all, to cover a slower first season than planned and the cost of adding a third associate in Year 2. With this funding, the lowest year-end cash balance is about $71,000, at the end of Year 1.

Where the money comes from:
- My own money: $58,000.
- Small business loan: $40,000.

Kind of funding we are looking for. A small business loan from a lender that finances small retail businesses, backed by my own savings and the fixtures as collateral.

How we will pay it back. We expect a profit of about $9,000 in Year 1, a profit of about $36,600 in Year 2, a profit of about $77,800 in Year 3, a profit of about $105,400 in Year 4 and a profit of about $125,700 in Year 5. With this funding, the business has money in the bank at the end of every year of the plan. Our loan is the small business loan at 11.5% over 5 years, about $880 a month. That payment is already included in our cash flow. We chose these as cautious planning rates; ask the lender for the real rates, which may be lower or higher.

What we are offering the lender: the fixtures and my personal guarantee.

A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan:
- Phase 1: open with a smaller storefront and about 1,000 items, with one associate and less rent, which lowers startup costs and the loan.
- Phase 2: once the racks and sellers grow, add associates, the intake specialist and online sales and follow this plan.
To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match.

All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume and a personal financial statement (a list of what you own and what you owe; lenders usually provide a form).
- Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov).
- The lease or a letter of intent from the landlord.
- Quotes for the fixtures and the consignment software.
- Your consignment agreement, markdown schedule and seller payout policy.
- Your business license and sales tax registration.
- A list of people who have agreed to consign and letters of interest from schools or churches.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Consignment Sales, Shop Share (per item sold): about $24 in Year 1, rising to $27.01; about $12.50 in direct costs, rising to $14.34; about 9,500 in Year 1, growing to 18,800.
- Items Bought Outright or Donated (per item sold): about $15 in Year 1, rising to $16.88; about $2.50 in direct costs, rising to $2.87; about 5,000 in Year 1, growing to 10,200.
- Online and Pop-Up Event Sales (per order): about $32 in Year 1, rising to $36.02; about $11 in direct costs, rising to $12.62; about 700 in Year 1, growing to 2,500.
- A consignment item sells for about $24 in Year 1 and about half goes to the seller, which is why direct costs are about $12.50. About 9,500 consignment items, 5,000 bought or donated items and 700 online orders is roughly 50 items a day on about 312 open days. Prices rise about 3% a year.
- Equipment ($26,000 in Year 1) covers racks, fixtures, software and cameras, and later years add small items and replace racks.
- Pay (a full year, per person): owner and store manager $38,000; sales associates (full-time equivalents) $25,000; intake and pricing specialist $27,000.
- Other yearly costs in Year 1: rent $40,800, utilities $5,400, insurance $2,600, card processing fees $6,000, marketing and consignor events $5,400, software and website $1,800, hangers, bags, tags and shop supplies $2,800, accounting and legal $3,000, payroll taxes $9,500. These grow between 3% and 12% a year.
- Startup equipment and later purchases ($26,000 in Year 1, then $2,500, $2,500, $4,000 and $2,500) are spread evenly over five years in the plan's books.
- Customers and payers pay about 4 days after service, so at the end of Year 1 about $3,254 is still owed to us. Income tax at 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs