Are you interested in starting a shoe line business from scratch? If YES, here is a complete guide to starting a shoe line business from home with NO money and no experience.
Okay, so we have provided you an in-depth sample shoe line business plan template. We also took it further by analyzing and drafting a sample shoe line marketing plan backed up by actionable guerrilla marketing ideas for shoe line businesses. In this article, we will be considering all the requirements for starting a shoe line business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Shoe Line?
Shoes are a major fashion component, and no dressing is complete without the shoes. There is a global market for shoes, which means there are large opportunities for those who want to go into shoe manufacturing, designing, or retailing. In wanting to become an entrepreneur in this field, you will need to carry out a market research to identify your potential customers and target market, make a decision as to whether your brand will include shoes for both gender, and the type of shoes that will be offered.
The type of shoes and the quality you intend to go into will determine your target market. If your target market is a high end clientele, then more emphasis will be laid on the quality of the shoes as against the quantity. And if your clients are low classed, more emphasis will be laid on quantity over quality. Shoes are sold in a number of stores and venues, including family shoe store, specialty shoe stores, department and discount stores and vendor-owned outlets, and you would have to decide which type of shoe stores you would want your shoes to be in so as to be close to your target market.
You can also decide to sell your shoes in online stores. The geographic spread of establishments for online shoes sales industry is not proportional to the population distribution. An online store is unlike a physical store that must be close to the customers, an online store needs a warehouse to store goods that can be delivered through mail to the customer.
As an entrepreneur, you would need to keep up with industry trends by becoming a member of shoe manufacturers and retailer associations, such as the American Apparel and Footwear Association, and the National Shoe Retailers Association. The organizations also help regulate the industry as well as minimize trade restraints.
Starting a Shoe Line from Scratch With No Money – A Complete Guide
- Shoe Line Industry Overview
People in the United States every year spend over $20 billion in footwear. According to the 2002 Census Bureau’s Statistical Abstract of the United States, the number of shoe stores in the year 2,000 dropped to 29,700 (from 37,200 in 1996). The footwear industry has been negatively affected by the downturn economy in the United States, and also by low consumer confidence that caused stagnation in spending; this however, did not affect the teen market, as spending continued as a strong pace.
- Interesting Statistics About the Footwear Industry
The revenue for this industry is well over $15 billion, with a projected annual growth of 21.3% from year 2010 to 2015. According to American Apparel and Footwear Association, Americans purchased 2.2 billion pairs of shoes in 2008. Women’s non-rubber footwear was the biggest seller at 886 million pairs.
In the footwear industry, establishments are either chain stores, or individually owned stores. The National Retail Federation categorizes most franchises as belonging to a large chain operation, with the involvement of parent companies varying depending on several factors.
The industry is further divided into family shoe store, where a broad range of shoe sizes and styles are sold; specialty shoe stores where a specific selection such as women’s footwear or athletic footwear is exclusively sold. The athletic shoe stores in 1998 had the largest specialty category, increasing its market share from 19.4 in the previous year to 19.9.
While athletic shoes dominated the market for a while, the Sporting Goods Manufacturers Association (SGMA) stated that in the second quarter of 1999, the total spending for athletic shoes declined by 10% from $3.403 billion to $3.056 billion for the same period in 1998; and while footwear for men’s models increased in that period, that of children and women models declined.
In 2014, sports footwear still outperformed total footwear, according to Euro Monitor. While sportswear had an increase of 9% in value, other footwear value increased by just 2%. Also sports inspired footwear increased by 12%, while performance footwear increased by 9% in the year under review. This increase is due to the fact that a more casual form of dressing has increased across the country, with men, women and children wearing more performance and sports-inspired footwear daily.
Apart from sales in stores, most shoe line entrepreneurs have also had to go online to sell their shoes. Since shoes are generally discretionary purchases, the online stores are heavily dependent on per capita disposable income as well as macroeconomic factors that drive consumer spending.
Starting a Shoe Line from Scratch With No Money – Market Feasibility and Research
- Demographics and Psychographics
The demographic and psychographic composition of those who need shoes need not be stated, as everyone regardless of their class wear shoes. Shoes are a basic necessity, and even though one might argue on the quality worn by certain classes, one cannot deny that the shoes still serve a purpose, from baby boomers, young children, teenagers, young adults, adults, the middle aged, and the aged all need shoes.
Also regardless of your job, you will need shoes as some jobs require specialty shoes before carrying out the job, like those in healthcare, athletes, blue collar workers, and so many others.
List of Niche Ideas Within the Shoe Line Industry
There are different niche ideas within the shoe line industry, and while certain aspects in the shoe line might be different amongst shoe companies, the basic aim of providing cover for the feet is the same, and some even go as far as offering other services that would give them an edge over their colleagues in the same industry.
Some area of specialization in the shoe industry includes;
- General shoe design
- Specialty shoe design
- Shoe manufacturing
- Shoe distribution, shoe retailing, and other such related area of specialization.
The sub niches can be based on customer groups or distinguishing characteristics, specific age grades, male, cross-trainer or tennis player, female, athlete, adventurist or hiker. While entrepreneurs starting on a small scale might choose one area to specialize in, those starting on a medium or large scale, might choose to go into two or more areas of specialization.
- The Level of Competition in the Shoe Line Industry
The shoe line industry is not for the faint hearted. It is not so easy to start this kind of business, as it needs one who has pure determination and zeal. First off the amount required to start for someone on a small scale cannot be compared to most other types of business, and many important details will have to be thought out or taken into consideration, like the target market, shoe brand, materials needed, and any other feature the shoe might need, and then designing, and finding a footwear sourcing agent or shoe factory.
Truthfully, it is better to start off on a medium or large scale, as this would bring operating costs down as opposed to starting up on a small scale. Competition in this industry is stiff, and entrepreneurs that want to go into this industry, must go into specialty type of shoes, if they ever hope to be able to compete.
- List Of Well – Known Brands in the Footwear Industry
The brand leaders are those who have done so well in the industry and have been operating for a defined period of time. Not every business can stand the test of time, and retain customers, so those who can be called well-known brands are those who have succeeded in merging so many factors so as to be perceived successful. They are retaining more customers, and are keeping their bottom line healthy.
Here’s a list of well-known brands in any specialization of the shoe industry:
- Payless ShoeSource Inc
- Wolverine World Wide
- VF Corp
- Stride Rite
- Flip Flop Shops
- BioPed Footraces Centers
- Foot Solutions
- Good Feet
- Kiddie Kobbler Ltd
- Panda Franchises Ltd
- Shoebox New York
- The Athlete’s Foot
- The Brown Shoe Company
Before starting up a shoe line business, you must carry out a thorough research of the industry, and be certain of several factors such as the location you intend to send your shoes to, or sell from yourself. Recently, there has been a downturn in the economy, and this has had an adverse effect on the demand for shoes; with only specialty shoes like that for athletes, and teenagers, not being affected.
This means that the demand for shoes is dependent on the per capita disposable income, and more growth will be expected as the economy picks off again. The growth of the economy will not only boost demand, but commercial expansion as well, allowing more shoe entrepreneurs entering into the market, to carve out a niche for themselves.
It is necessary to note that even if shoes are essential, people will not buy more if they are not disposed to doing so, especially as most people own more one pair of shoes. An average person owns at least two pairs of footwear, while others might own more than ten. A bad economy will just have people owning less than they usually do.
The overhead cost for an entrepreneur seeking to start a small scale shoe line might have less difference than a medium or large scale business, especially for those that want to manufacture themselves.
Is the Shoe Line Business Worth Starting from Scratch or is Buying a Franchise Better?
Investing in any business either a start up or franchise is risky, as nothing is a guarantee. Also, while it might seem like this business works better with franchising, entrepreneurs who want to start on their own can do so as well. Footwear franchising is flexible and versatile for those that are willing to buy into the franchise opportunity. It affords the entrepreneur the opportunity to be in different types of stores, and locations.
Those who wish to start up on their own without going into a franchise can get their own share of the market by focusing on a proven shoe category generally or more specifically on the niche of high performance sports shoes, and sell in a section of a shoe retail outlet. Starting on your own might mean making mistakes, but they will guarantee you a better experience.
Possible Threats and Challenges You Will Face When Starting a Shoe Line
Every business faces threats and risks, and it is how they handle it that determines if they will survive. When starting your shoe line, you are likely to be faced with product risk which means your product must solve a problem to get an investment. The shoes would need to address the market and the right opportunity within the market at the right time. Knowing the buying trend of your customer is another challenge that needs to be assesses before you think of starting your shoe line.
Would the client buy your shoes even if there is an economic recession? There is also the threat of facing a competitor in the same line whether on a small, medium or huge scale. The threats cannot be avoided, but proactive planning can limit the challenges your business will face, or help your business absorb the shocks.
Starting a Shoe Line from Scratch With No Money – Legal Matter
- Best Legal Entity to Use for a Shoe Line Business
In starting out your shoe line business, you must decide on the appropriate legal structure for it. Usually, there are four legal structures you can choose from; sole proprietorship, partnership, limited liability company (LLC), or a corporation. There’s no right or wrong structure to choose, as you would have to choose the structure that best meets your needs. Most times, it is better to seek some counsel from a lawyer or an accountant.
For those wanting to start on a small scale, the initial best choice of structure would be either a sole proprietorship, or partnership. These structures make so much sense especially as personal liability will not be a big worry, which means you might not be able to borrow much money, and are also unlikely to be sued.
Small scale businesses can also open an LLC or even corporation, especially as these structures provide a limit on the owner’s personal liability for business debs. Also an LLC or corporation enables you enjoy better tax rates. Overall, an LLC isn’t just for medium and large scale business, but can be for small scale businesses as well.
Catchy Business Name ideas Suitable for a Shoe Line Business
- Comfy Feet
- Squiggles Shoe Store
- Happy Feet
- Walking Tall Inc
The Best Insurance Needed for a Shoe Line Business
The fact that you can operate your shoe line business as a sole proprietorship does not mean that you will have to forgo basic insurance policy. Having insurance protects you, your business, your shoes, and you employees if any. You could talk to your insurance broker or agent so that you will be guided on the best and most suitable insurance cover that you should buy for your shoe line business.
Below are some of the basic insurance covers that you should consider purchasing if you want to start your own shoe line business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- hazard Insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
Does a Shoe Line Business need Intellectual Property Protection?
The shoe business is a world where there is creativity and innovation. Acquiring intellectual property (IP) rights and using them strategically will ensure that an entrepreneur can protect and increase their income-generating potential. If an entrepreneur wants to manufacture a sports shoe, he or she would need several intellectual properties to protect the shoe such as:
- Patents: which is aimed at protecting the technology that was used in developing the shoe.
- Designs: which protects how the shoe looks
- Trademarks: which distinguishes the shoe from similar products and protect the reputation of the shoe as well as the company making it
- Copyright: which protects any artwork and audiovisual creations that will be used to publicize the shoe
Does a Shoe Line Business Need Professional Certification?
Yes, if you want to go into shoe design or manufacturing, you would need to be certified, or have a basic degree in fashion, or arts design. This is because it would require the use of technical knowledge to design and see a shoe to its completion. An entrepreneur who wants to start a shoe line business would have to be aware of industry regulations, whether the shoe line is in designing or manufacturing.
List of Legal Documents You Need to Run a Shoe Line
Some of the basic legal documents that would be needed to successfully run a shoe line business in the United States of America include;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement
- Operating Agreement
- Insurance Policy
- Employees Handbook
- Contract Document
- Trademark registration for your logo
- Tax Payer’s ID number.
Writing a Business Plan for Your Shoe Line
There is hardly any business that does not require a business plan. Any serious entrepreneur who intends to make profit from his or her business, then ensuring that a proper business plan is prepared is vital before investing hard earned money and time into the business. A business plan will guide you and give you a clear picture of what you intends achieving in starting the business.
Having a business plan is not just for the sake of having a business document in place; but will help in drafting strategies that will help the entrepreneur effectively administer and manage the shoe line business. The business plan should cover strategies on how start-up capital will be generated, clients attracted and how the scope of the business will be expanded. These key components must not be missing from the business plan.
Other key components that should be included in the business plan are as follows;
Executive summary which clearly states what your shoe line business will be all about, the company’s corporate culture, sales and marketing strategies, marketing goals, target market and perhaps what stands you out from your competitors, It is also expected that you state your company’s vision statement, mission statement and the areas where you would likely want to cover.
Lastly, other key components such as products or service offering, SWOT analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, publicity and advertising strategy, budget and start – up capital generation should be made available in the document.
Not everyone can write a detailed business plan themselves, and so you would need to employ an expert, or download an online template to be used as a guide.
Detailed Cost Analysis for Starting a Shoe Line
Research and statistics show that the cost of starting a shoe line business is almost fixed simply because the prices of the basic equipment needed for the business is the same. The start-up capital for a shoe line business is dependent on what ideas the entrepreneur has towards the business. A shoe manufacturer has to ensure that he gets the right quality materials without breaking the bank, while ensuring that the shoes remain affordable to the customer.
Basically, to launch your shoe line business in the United States of America, you would need to ensure that the following requirements are done;
- The Fee for incorporating the Business in the United States of America would cost $750.
- The budget for Liability insurance, permits and license would cost $1,500
- The amount needed to acquire a small facility with space for storage of working tools and equipment would cost $3,000.
- Equipping the facility would cost $500
- The cost for acquiring the required working tools, equipment and machine would cost $15,000
- Website would cost $200
- Miscellaneous expenses would cost $1,000
Going by the report from detailed research and feasibility studies, an entrepreneur would need an average of $22,000 to start a small scale shoe line business in the United States of America.
Those wanting to start a medium scale shoe line business, would need nothing less than $80,000. Those starting on a large scale shoe line business should look towards raising well over $170,000 as start-up capital.
- Financing Your Shoe Line Business
A shoe line business idea might sound fantastic, but without the required finance, the business would just remain what it is, an idea. This goes to show how important finance is in starting a business. Finding capital for your business idea is therefore a task that every entrepreneur must face.
Before sourcing for funds, it is best to have a detailed business plan in place, because not only does it show you are serious, it also gives investors the opportunity to see where your business is going, and then investing in the business. No serious investor except probably a loan shark will take you or your business seriously without seeing a detailed business plan.
Below are several options that can be used in raising money to finance your shoe line start-up business:
- Raising money from personal savings
- Raising money from investors and business partners
- Applying for loan from bank
- Sourcing money from Venture Capitalists, and Investors
- Sourcing for soft loans from family members and friends.
Choosing a Suitable Location for your Shoe Line Business
Choosing an important location for your shoe line business is very vital, because the location has to be one to attract those who love your kind of shoes to your show room or the retailing outfit like malls you choose to use. If you are selling trendy teenage shoes, it is important to get your shoes into a mall, because teenagers mainly hang out at the malls, and are likely to look at what you have on display, while they hang out.
Locating your shoe business in a quiet area especially when just starting out, might be great if your shoes are for senior citizens or those that do not care to shop in a crowded place. This is why it is essential that you do plenty of research before choosing a location.
A major factor in the location of your shoe line business is the financial status of those either residing, or working around the area of your location, and your product pricing. This is important so you do not locate your business away from your target market, an orthopedic shoe dealer will have no business in locating their show room or store in the mall, as turnover will likely be poor.
You can start your shoe line business from home, and liaise with shoe factories, material suppliers, distributors and retailers. All you need is a small space for administrative work and a good computer plus work space for your design; the garage, den, attic or basement can also fulfill that purpose. The only reason why you would need a showroom or store is if would be starting off the business on a large scale or medium scale, as well as have a handful of employees working for you.
Starting a Shoe Line Business – Technical & Manpower Details
Creating modern shoes relies heavily on sub-contract factories for the different and many specialized operations. Even though the outsoles might be developed in-house by the shoe technicians, the tooling and parts might be purchased from a company that specializes in rubber pressing. A shoe factory controls the different components and ensures that the uppers and the outsoles all fit together correctly.
The first operations during shoe manufacturing are the cutting and marking operations. The following are some of the equipment that would be needed.
- Clicker cutting machines
- Drag Knife Cutter
- Vacuum Table
- Silk screen printers
- Electric Sewing Machines (Post, Long Arm, Short Arm)
- Toe box
- Heel Counters
- Strobel Sewing Machine
- Lasting Machines
- Assembly Line Machines
- Pressing Machines
- Dryer Oven
- UV Light Tunnel
Basically as a shoe line designer, one might not need all the above listed equipment, and can successfully run the business from the privacy of your home. However, those who choose to go into a medium or large scale operation, and venture into the all part, not just designing, would need to get an office facility or a warehouse, to at least carry out some or all of the operations.
This also means that the number of employees needed to run the facility will be dependent on the owner’s intention, as more employees would be required to work in a large scale business as opposed to those that would work in a medium scale business, or even small scale shoe business.
A small scale business might require just the owner, but a medium scale shoe business might require a range of 10 and 15 employees, while a large scale would certainly require more than 15 employees to carry out its functions effectively, from technicians, floor workers, factory foreman, cashier, administrators, security personnel, accountants, marketers etc.
The Production Process Involved in a Shoe Line Business
The production process depends on what type of shoe line business, you are venturing into. A designer might not require any production process save designing.
The production processes involved in the shoe line business mainly for manufacturers range from design creation, getting the materials, cutting them, creating the upper and the heel through a heating and cooling method, creating the sides and upper heel, gluing the base of the shoe, to finalizing by checking for excess glue and imperfections
Other processes not necessarily involved in the production would be packaging and distribution of the shoes to the different locations where it would be sold.
Starting a Shoe Line Business – The Marketing Plan
- Marketing ideas and strategies for a Shoe Line Business
In marketing your shoe line business, you should be aware of the enormous competition from brand names, especially the ones that are status symbols, as customers prefer brands they know to that which they do not know. However, an entrepreneur with creativity, business sense, and style, will not be too bothered about the big sharks, especially as he or she knows the value they are bringing to the marketplace.
In marketing your shoes, you should leverage on all available sources to get business deals. For those that will be running a medium and large scale business, even those on a small scale business, they must ensure that they bid for contracts from schools, hospitals as well as government agencies, whenever the opportunity presents itself.
What will make you noticed are your innovations, your marketing has to be based on the innovations your shoe is bringing to the marketplace.
Below are some tips that will help you effectively market your shoe line business:
- Introducing your business by sending introductory letters alongside your images of your shoes, and why they are different from others in the same line to stake holders in the shoe distributor and retailers, government institutions, fashion shows, or sporting agencies.
- Promptness in bidding for contracts, as well as delivery reliability.
- Advertising your business in relevant fashion magazines, local newspapers, television, and radios.
- Listing your business on local directories and yellow pages
- Attending conferences, seminars, fashion and business fairs relating to shoes
- Creating different packages for different category of clients whilst still delivering quality shoes for them.
- Leveraging on the internet especially the social media to promote your business
- Direct marketing
- Word of mouth marketing (referrals)
- Sponsoring shows that will boost your brand image, and create more awareness for your company.
Factors That Will Help You Get the Right Product Pricing for your Shoe Line
There are several factors that will enable you set the right price for your shoe line business, so that you don’t operate at a loss while trying to ensure your customers get shoes at affordable prices. The first factor is in ensuring that your operating costs are kept at the lowest minimum.
In manufacturing the shoes for instance, which will be a cheaper option, is it taking your shoes overseas to countries where labor laws are cheap, or is it using a company close to home. The decision can only be made, after shipping costs, way billing costs have been put into consideration. The right decision in determining the right product pricing has to be one that is a win-win situation for you and your clients.
Possible Competitive Strategies for Winning Your Competitors in the Footwear Industry
The business world is a game where only the best players win. While the customers are the lifeblood of any business, you have to realize that your competition is vying for the same customers as well, and would do whatever it takes to get and retain them.
The competitive strategies you would need to win your competitors would be in defining your brand. Just like no two customers are alike, no two brands are alike as well. Your brand has to stand for something that projects your vision and objectives as well as identifying with the customers as well. Your brand has to be consistent is communicating your own Unique Selling Point (USP).
Also, choose a competitive advantage. You can do this in three key areas, such as in quality, pricing and service. Ensure that in these three key areas, you have an edge over your competition. Another competitive strategy is to ensure that your customers stay excited by making every new feature or product you introduce innovative. This gives your customers something to talk about, whilst shutting out the competitors.
Possible Ways to Increase Customer Retention for your Shoe Line Company
Regardless of rising customer acquisition cost, every serious entrepreneur knows that his or her business needs to increase customer retention, as no company can survive for long without their customers. According to studies from the United States Small Business Administration and U.S Chamber of Commerce, it was found that acquiring new customers cost as much as five to seven times as retaining them. Customer profitability increases over the life of a retained customer, which is why businesses strive for ways to retain their customers.
The reason why customers leave a business or brand is due to dissatisfaction with service offered, dissatisfaction with product, and the need to try out an alternative. The best ways at increasing customer retention for your shoe line is to; set customer expectations early, by under promising and over delivering. Clients tend to remember negative experiences; building on trust by implementing a relationship marketing strategy; having an excellent and proactive customer service and building relationships with your clients online especially on important social media platforms.
Strategies to Boost your Brand Awareness and Create a Corporate identity for your Shoe Line
Creating strategies that would boost your brand awareness and create a corporate identity for your shoe line is very important. As an entrepreneur, you should know that having a brand alone is not enough, as the customers must be made aware of the brand always either subtly or otherwise.
Stated below are tips that can help you boost your company’s brand as well as advertise and promote your company:
- Ensure you create an identifiable brand by streamlining you logos, colors, and fonts. Tell your brand story as well, while emphasizing the brand’s core values.
- Ensure that not only is your website optimized through the use of Search Engine Optimization (SEO), but that you also convert every visit to your page to actual sales through the use of Conversion Rate Optimization (CRO)
- Apart from having a website, having a social media presence is vial as well, as you connect with your customers over platforms that are best for your brands. For example, your brand, if it is in baby foot wears would not need to have a handle in singles dating sites or forum, because majority of your customers will be at sites for mothers. Also being on LinkedIn, Facebook, Twitter, Instagram, and any other social media, has to be dependent on which will project your brand the more.
- Word of mouth or direct referral is a powerful influence, and can help boost your brands in ways that you could not imagine. Word of mouth or direct referral can be gained through excellent customer service, provision of incentives, and also testimonials.
- Use of biddable media is another way at boosting brand awareness, as it is the use of paid promotion across Facebook or Twitter, targeted at a particular segment, by using keywords and usually run on a budget to reach target market.
- Sponsoring shows and competitions. Shows such as fashion shows, and other such events, are strategies intended to boost the brand awareness of your company.
- Advertisement through relevant magazines, local newspapers, television, and radios.
- Handbills and posters.
Creating a Suppliers/Distribution Network for your Shoe Line Business
The shoe line business is one that cannot be run as a stand-alone, as it often needs the efforts of suppliers and distributors before it gets to the final customer. This is why it is not only essential that one researches the industry well, but it is also necessary that suppliers and trusted vendors and distributors are sourced, and then a good relationship kept.
The suppliers will ensure that you get the best deals in materials; while the distributors will ensure that you get a feedback from clients, or advice from the distributors themselves, and make possible adjustments where necessary. Without these vital relationships, you might find your business floundering.
Tips for Running a Shoe Line Business Successfully
Running a shoe business line successfully, would need an entrepreneur who has innovative concepts to bring into the market. Clients love innovation, but they also love comfort. In bringing in new innovations, do not sacrifice the comfort of your client.
After innovation, comes accessibility. Customers must be able to get to your products when they desire to do so, which is why the location for your shoes must not be far or be of great inconvenience to your clients. Locating your corporate male shoes in a college area might not be a good idea, as there are more of young adults within your location, than there are of working males, as even the working males would prefer casual shoes to corporate ones.
You will also need to remain updated, knowledge-wise and skill-wise about industry information and trends; and also network with colleagues in the same area through seminars and conferences. That way you know about your customer’s preferences and needs, and make adjustments accordingly.