Do you want to start a fabric store business? If YES, here is a complete guide on how to start a fabric store business with no money and no experience.
A fabric store is one of the many businesses that can be started in any part of the world and the owner of the business can still generate good turnover year in year out because everybody has need for fabrics. Entrepreneurs who intend starting a fabric store business can as a matter of fact start from their car or garage.
The bottom line is that there is always a ready market for fabrics. All a fabric retail store needs to do is ensure that they have quality fabrics from different parts of the world, and also ensure that their store is well positioned.
Which is why before launching this type of business, it will pay you carry out market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your fabric store, it will not take you long before you breakeven and start smiling to the bank.
So, if you want to start your own fabric store, all you need do is to read this article and you will be well equipped. You can start your fabric store from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes recognized.
Steps to Starting a Fabric Store Business
1. Understand the Industry
Fabrics store business is classified under the Fabric, Craft & Sewing Supplies industry and they primarily retail sewing and craft supplies, fabrics, patterns, yarns, needlework accessories, seasonal decorations and sewing machines. Stores that sell sewing machines with other household appliances are excluded from this industry.
A fabric supplies store is not a difficult business to start and it is not so capital intensive especially if you choose to start on a small scale within your neighborhood. Getting the right stock that people want to buy and good stock keeping records are the secrets of running a successful retail business.
The Fabric, Craft & Sewing Supplies Stores Industry is indeed a large industry and pretty much active in a lot of countries. Statistics has it that in the united states of America alone, there are about 20,034 registered fabrics, craft and sewing stores responsible for employing about 50,383 people and the industry rakes in a whooping sum of $4 billion annually.
The industry is projected to enjoy -3.0 percent annual growth. The establishments in this industry that have a dominant market share in the United States of America are; Hobby Lobby Stores Inc., Jo-Ann Stores and Michaels Stores.
A study of industry activities shows that the revenue for the Fabric, Craft and Sewing Supplies industry has exhibited glaring decline over the five years to 2017. The industry is threatened by external competition from online retailers of industry products.
Not only do online retailers have lower overhead and administrative costs, they are increasingly taking a larger portion of sales away from physical establishments.
Input price declines and increasing operational efficiencies have increased industry profitability, however, this has not benefited revenue growth. Going forward to 2022, industry revenue is expected to continue its decline, however, at a slower pace.
A recent study conducted by IBISWorld shows that Fabrics accounted for the majority of the industry revenue in 2017, representing roughly 60.3 percent of total sales. This segment includes fabrics, such as cotton, satin, silk and corduroy, that are used for apparel construction, home decor and quilting projects.
The report also started that this segment has experienced a moderate rise in its share of revenue over the past five years; driven by the do-it-yourself (DIY) trend, as a growing number of American consumers have taken to creating their own clothes and household decor items.
As a result, demand for fabric materials has increased. Sewing and craft supplies, which include yarns, laces, trimmings, notions and needlework kits, are anticipated to account for 37.0 percent of the revenue generated from the industry within the stated period.
The fabric supply store business will continue to blossom because people will always make use of the products retailed by fabric stores. Despite the fact that the industry seems over – saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own stores in the United States.
If you are contemplating starting your own fabric store business in the United States, you should ensure that you carry out a thorough market survey and feasibility studies. If you get some key factors wrong before starting your business, then you are likely going to struggle to stay afloat.
The fabrics, craft & sewing supplies store business is a thriving and profitable business especially if you are creative and ready to take on the available market within the location of your business and also leverage on online stores.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize fabric stores cut across all genders; male and female above 18 years with the financial means hence the demographic composition for fabrics and supplies store business is all encompassing.
In essence, your target market can’t be restricted to just a group of people, but all adults who reside in your target location and who have the purchasing power. So, if you are thinking of opening your own fabrics store then you should make your target demographics all encompassing.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to the fabrics store business. Every player in this line of business usually sells a wide range fabric, patterns, sewing supplies, upholstery materials, yarns, needlecraft supplies, sewing machines and seasonal decorations from top manufacturing brands in the United States and other countries of the world.
On the other hand, it is important to state that some fabric stores may decide to build a strong online presence and service the online community.
The Level of Competition in the Industry
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you stock your store with a wide range of fabrics from different manufacturing companies and you know how to attract and reach out to your target market.
But there are several fabric stores scattered all around the United States, so if you choose to start your own store in the United States, you will definitely will experience fierce competition from the expansion of e-commerce.
4. Know Your Major Competitors in the Industry
It is the norm that in every industry, there are always brands that perform better or are better regarded by customers and general public than others.
Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading fabric brands in the United States of America and in the globe;
- Hobby Lobby Stores Inc.
- Jo-Ann Stores
- Michaels Stores Fabric – Michael Levine Inc.
- Fine Fabrics USA
- Fabrics World USA, Inc.
- Fabric Center
- Discount Fabrics USA
- Fabric Town USA
- Fabric Czar USA, Inc.
- JOANN Fabrics and Crafts
- Warehouse Fabrics Inc.
- Belle Maison USA Ltd
- Dae Shin USA Inc.
- Baum Textile Mills, Inc.
- American Ribbon Craft, Trophy & Fabric
- The Sewing Studio Fabric Superstore
- Metro Textile Corporation
- Wilson Fabrics
Economic analysis is one of the important factors that anyone who intends starting a new business should never take for granted. This is because if you get your economic analysis wrong before investing into any business, the likelihood of the business struggling cannot be ruled out.
So if you want to start your fabric store business, then you should endeavor to carry out detailed economic analysis so as to know the amount to invest in the business, the best supplies to deal with, the running cost and overhead cost of owning the business and of course pricing and profits you are expected to generate from the business.
Please note that in order to carry out thorough economic analysis for your business, it will profit you to engage the services of business consultants who would help you come up with tailored economic analysis that will help to properly structure and operate your business.
5. Decide Whether to Buy a Franchise or Start from Scratch
Anyone who wants to start any business will always want to adopt the simplest route or Business model that will guarantee them profits with minimal investment which is why people usually don’t want to build their business from the scratch and instead opt to purchase franchise from an existing and successful brand.
If you are looking towards starting a fabric business, you have the options of purchasing a franchise or starting from the scratch. There are a couple of fabric stores that are into franchising that you can purchase from. But the fact still remains that a lot of entrepreneurs prefer to start the business from the scratch because the business has low level entry barrier and it can be started with minimal startup capital.
In a nutshell, whether you choose to start your business from the scratch or buy a franchise, the choice is yours, but make sure whatever choice you make aligns with your business goal, vision and mission.
6. Know the Possible Threats and Challenges You Will Face
The fabrics industry is threatened by external competition from online retailers, so therefore, if you decide to start your own today, one of the major challenges you are likely going to face is the presence of well – established fabric stores and online fabric stores. The only way to avoid this challenge is to create your own market.
Other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you are considering starting a fabric store business, the legal entity you choose will go a long way to determine how big the business can grow. You have the option of either choosing a general partnership, limited liability company, or a sole proprietorship for your fabric store.
Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale fabric store especially if you are just starting out with a moderate startup capital in a small neighborhood.
But if your intention is to grow the business and have chains of fabric stores across the United States of America and other countries of the world via franchising and opening online store, then choosing sole proprietor is not an option for you. Limited Liability Company or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your fabric store business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your fabric store business with the ability to sell franchise and open chains of fabric stores all across the United States of America, you will agree that limited liability company is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own fabric store business, here are some catchy names that you can choose from;
- Maria De La Rosa® Fabric Store, Inc.
- Stacy McRib ™ Fabric, Craft & Sewing Supplies Store, LLC
- Bridget DE Costa™ Fabric Store, Inc.
- Ella Mac® Fabric, Craft & Sewing Supplies Store, LLC
- Fabric Nation™, Inc.
- Ananta Baldwin® Fabrics Store, Inc.
- Dora Kings© Fabrics Stores, Inc.
- Georgina Paulson™ Fabric, Craft & Sewing Supplies Store, LLC
- Queen’s Court™ Fabric Stores, Inc.
- Grace Mendez® Fabrics Store, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance cover that you should consider purchasing if you want to start your own fabric business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own fabric business, usually you may not have any need to file for intellectual property protection / trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
When it comes to fabric store business, you do not need to have any formal training or special certification before you can be allowed to start it. All you need is informal training that will expose you to the in and out of the business. With that, you will be able to maximize profits in the business. On the other hand, if you come across any form of certification that can aid you to conduct your business, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
If you do, it won’t be too long before the long hand of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own fabric store business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Copy of license for the service support facility and/or a recent inspection report
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a fabric business can be cost effective especially if you choose to start on a small scale by running your fabric store in a street corner.
Securing a standard and well – positioned store facility and stocking your store with a wide range of fabric, craft & sewing supplies from different manufacturing brands are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale, you would need to go source for fund to finance the business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your fabric business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your fabric store, the rule of thumb is that you should be guided by the demand for such products and easy access to wholesale purchasing of a wide range of fabric, craft & sewing supplies from different manufacturing brands.
It cannot be overemphasized that the location you chose to open your fabric store business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power.
It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for a business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your store.
These are some of the key factors that you should consider before choosing a location for your fabric store;
- The demography of the location
- The demand for fabric, craft & sewing supplies in the location
- The numbers of adults and the purchasing power of the residence of the location
- Accessibility of the location
- The numbers of other fabric, craft & sewing supplies stores in the location
- The local laws and regulations in the community
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
There is no special technology or equipment needed to run this type of business except for Point of Sales (POS) Machines, shelves, and software applications. You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a store facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard fabric store business, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Store Manager, Sales and Marketing Officers, Accounting Clerk, and Cleaners. On the average, you will need a minimum of 3 to 6 key staff members to run a small – scale but standard fabric store business.
The Services Delivery Process of the Business
When it comes to buying and selling things, there are no hard and fast rules about it. Basically, it is the duty of the merchandize manager to help the store stock goods (a wide range of fabric, patterns, sewing supplies, upholstery materials, yarns, needlecraft supplies, sewing machines, sewing craft supplies and seasonal decorations from different manufacturing brands).
They source for good purchasing deals and also ensure that they do not only purchase at the right prices that will guarantee them good profits, but also ensure that they purchase supplies that are in demand in their business location.
Once the fabrics are bought, they are properly arranged in the store for customers to see and purchase. On the other hand, they are also expected to deliver orders made by clients if such services are available in the store. It is important to state that a fabric store may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a fabric business, then you must employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the industry.
People will purchase fabrics from your store if they know that they are going to get the best and of course value for their money.
As a matter of fact, your marketing strategy will center on quality, and pricing, and above all excellent customer service. You should ensure that whenever your customers visit your store, they will get quality products and excellent service.
The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers. These are some of the marketing ideas and strategies that you can adopt for your fabric store business;
- Introduce your fabrics store by sending introductory letters alongside your brochure to fashion designers, tailors, corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists, and every adult in the neighborhood where your supplies store will be located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need to purchase fabric, craft & sewing supplies products within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your products.
- Engage in road shows in targeted communities from time to time to sell your products
- Join local fabric, craft & sewing supplies store associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your fabrics at rock bottom prices is to purchase your items directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your supplies at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of a wide range of fabric, craft & sewing supplies from different manufacturing brands in your store, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your product can favorably compete with the some of the best in the industry.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and services delivery, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.
If you can continue to make available a wide range of fabric, patterns, sewing supplies, upholstery materials, yarns, needlecraft supplies, sewing machines, sewing craft supplies and seasonal decorations from different manufacturing companies, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a fabric store business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of fabric stores and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your fabric store;
- Place adverts on both print (newspapers and fashion magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your fabric store
- Install your Billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your fabric store
- Distribute your fliers and handbills in target areas
- List your fabric store in local directories/yellow pages
- Advertise your fabric store in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your fabric, craft & sewing supplies store is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks ans are well branded with your company logo et al.