Own business: showroom

* The calculations use the average data for the World

The show-room is generally a room where a product is presented, it differs from the exhibition by the ability to touch and see, and if you liked everything and place an order for the product you like, although the show-room was originally a fashionable apparel. In such establishments, fashion shows are held where designers exhibit their collections to people of only a limited circle - this is a kind of presentation and exhibition for the elite. Usually a show-room is opened by a design studio or fashion store, however, a similar concept of organizing an exhibition space can theoretically extend to absolutely any thing and even services. If you open your own showroom, you can earn money just for renting your space for one evening, and the famous show-room can set a very undemocratic price tag for a place.

Activities of this kind may fall under different definitions and take place in various formats. From a legal point of view, this can be (OKPD 2) 82.30 Services for organizing conferences and trade shows or (OKPD 2) 68.2 Services for renting (leasing) of own or leased real estate. To get started, you need to register as a business entity, you can register as an individual entrepreneur, it is simpler and takes a little time, takes a little time and effort. If there is a need to register a legal entity, it is better to choose the form of a limited liability company. This will allow, as in the case of individual entrepreneurship, to use a simplified taxation system, which involves transferring to the state’s benefit no more than 6% of revenues or 15% of operating activities as taxes.

Now you need to decide on the format of your institution. In general, a show-room can be used as a tool for selling its products, this way of promoting a product can be very promising, especially when working with an elite product that is not intended for everyone. This also includes the launch of a novelty, an innovative product, or just something unique. However, this will not be a full-fledged separate type of business, but the development of an existing one. To deal exclusively with the showroom, you need to decide on what exactly there is a desire to earn. This can be either making a profit for the delivery of a place, or making a profit by selling the goods presented. These are essentially generally very different ways of earning.

In the first case, when there is a goal to make money exclusively through rent, you need to create a good reputation for your place, that is, make your premises famous, “untwisted”, “elite”. In this case, a sufficiently large number of sellers will contact such an organization to present their goods to direct consumers, and the entrepreneur who organizes the show-room should take care of advertising, the organization of the whole process and the like.

If the goal is to sell some products, then there is no need to cooperate with other sellers, but all the same difficulties appear here as with wholesale or retail trade. Only, as already noted, the show-room is usually used as a platform for the sale of clothing and related products (accessories, for example), so the range of its activities is somewhat limited. Although there is a show-room in which they sell equipment and even some other types of products in this way. In general, as a separate type of business, the show-room exists precisely as the point where various sellers promote their goods. To some extent, this is just an exhibition (therefore, the classification of activities takes place under this code).

One of the main points in organizing such a business is the search for premises. Here a lot depends on what kind of goods you have to trade, for which contingent the show-room is designed, what volumes of goods will be sold, and also on many factors. You can open a relatively small room where a couple of tens of square meters sell goods of some category. Only usually this is a deliberately losing option. More often, show-rooms are opened on a grand scale, and if we are talking about clothes, then it can be almost a show studio, combined with a clothing store. That is, no one excludes the possibility of attracting professional models with the subsequent organization of showing collections on the catwalk. Although the more common option is the presentation of the clothing collection directly by the designer to customers, when the latter is well versed in the product and can place an order for a single copy or its batch, depending on whether wholesale or retail trade takes place. Usually these are owners of large, branded, eminent, well-known, as well as high-end stores that take a new collection for their outlet.

In general, the optimal placement for the showroom is the city center, business quarters, in general, where the largest number of wealthy consumers are located. This also applies to such an institution, which is focused on retail customers, because it should be convenient for them to get to the place, but not go to the remote edge of the city. It is also very good if the building itself is already known in the city, that is, it will be some kind of cult place, which attracts a lot of people by its name alone. As for the cost of renting this kind of premises, we can say that it will be fully covered due to the fact that the cost of participation in shows is usually high. But initially, you will have to rely on considerable amounts, especially the calculation needs to be done for the first months of work - as long as there are few consumers, it may be necessary to pay for the site just like that. On the other hand, you can make a cult place on your own, carefully choosing the clientele and conducting a competent marketing campaign.

However, at the start of your business, a newcomer to this business, it can be very difficult, in fact, it is impossible to enter this market. Because no matter how extensive and progressive the campaign to promote their services is, there is still no reputation, and in the fashion business, connections play a very huge role - acquaintances and established relationships, including not only workers. In this regard, many novice entrepreneurs open their show-room naturally in the apartment, where they invite only a limited circle of people. This adds a certain elitism to the product, even if it is not branded.

The advantages in such a business are obvious - minimal financial investments and, as a result, low risks. Some entrepreneurs even begin to try to sell their goods not in order to make a profit, but to earn a name, and at first they are not registered as a business entity. That is, semi-legal trade takes place on small-scale products, which are sometimes sold at first at cost. Moreover, with this format of business organization, it is possible to sell goods that are made on an individual order. All the same clothes can only be made when there is a customer for it, while directly in the show-room itself there are only samples and previously created goods that either did not find their buyer, or were duplicated for the purpose of reselling or even just representing. Such a show-room “on the couch” (because many of them really open on the territory of private apartments) can become a reference point for a more normal business, because such semi-formal trading allows you to build up your client base and earn a reputation without any expenses and problems, and speech It’s not only about the reputation of your product brand, but also about the reputation of the outlet.

However, in any case, sooner or later it will be necessary to expand its activities, and from the sofa you have to go to rent or buy out your premises - this already depends on the capabilities of the entrepreneur. The first stage is the selection of just the right place (as mentioned above) and its arrangement. Depending on the specifics of the product, appropriate trading equipment is bought - these are racks, display cases, shelves; for clothes - hangers and sometimes even changing rooms. The consumer appreciates the opportunity to examine the goods from all sides, touch them, in "elite clubs" usually everyone trusts everyone, but if the company is also aimed at consumers "from the street", then you need to hire the appropriate sales staff. He will be able not only to monitor the situation on the site, but also to advise buyers, select the things they need - in general, engage in the usual trading activities of a consultant. Here, the show-room is only slightly different from the average store. In the case of the clothing trade, special models can be hired, which can immediately be dressed in the offered clothes (such as living mannequins), and wear them only at the request of the customer, that is, when he saw an interesting product and wants to see how he will look like on a person . In the case of an expensive show-room, a full-fledged show can also be organized, where models go to the podium - however, this is already a slightly different type of business. In addition, you can develop your business in the direction of holding full-fledged exhibitions, that is, hold presentations, conferences, consultations. Thus, the path of development of such a business can be very, very long and planned. And it can be very thorny.

The biggest difficulty in opening a show-room focused on the sale of expensive and well-known brands is the search for suppliers. For a beginner, getting the opportunity to collaborate with eminent clothing manufacturers is close to zero. Such companies already have their own representatives in all countries and are not interested in cooperation with an unknown organization. That is, you have to start with less quality or just less well-developed products, and those entrepreneurs who initially opened a show-room to demonstrate an existing brand - their own or a partner one, are deprived of this problem. Therefore, perhaps, in most cases, you can open a show-room only when there is already a product that can be presented, if there is no such product, then you should not open an enterprise with the expectation that “we will open, and then we will find consumers” . The organization or person who rents a place on the show-room venue wants to be sure that enough people will come to show it, because despite the seller’s direct contact with the buyer, the percentage of transactions in the total number of negotiations is not too large. Consumers of show-room services need mass, crowds, a whole campaign to attract potential customers; banquets are sometimes held and additional free services are offered to visitors. The organizer has all the responsibilities - the visitor should be interested not only in the product, but also in the place itself, that is, the entire presentation should be held in such a way that the client remembers not even the products, but the pastime itself (the partner who rents the area is, of course, interested in the opposite, but there is already some struggle with him for a man). It is important for an entrepreneur to make his place popular, cult, elitist, whatever - the main thing is known and popular. Then even a complete change in the profile of work (they sold clothes - they began to trade cameras) will not significantly change the flow of visitors.

To promote your services, you need to look for potential consumers to your own extent. Although it all depends on, again, what format of work was chosen. If the show-room is designed for any customer, then even ATL communications come into play - local media, posting information about oneself on thematic sites on the Internet, creating even your own site - this is convenient and puts at the disposal of a powerful information and advertising platform . But if it is a “closed club”, then here only acquaintances, acquaintances of acquaintances and other persons who have managed to get a “pass” will become consumers. Such a concept itself - working only with a limited circle of people - creates some excitement and a desire for uninvited people to attend a closed exhibition. Typical human weaknesses. True, a show-room of this type usually offers a truly unique product, or at least one that just cannot be bought. For example, brought from abroad. Some entrepreneurs manage to sell branded items in a show-room at a discount, because the imported goods pass through customs either as a trade sample or as a thing for personal use. Hence the reduced rates and the absence of tax. It is profitable and convenient, though it will not work in large quantities, and indeed it is illegal.

In such work, you generally need to be careful with finding customers. If the show-room operates in the format of an elite store “only for its own people”, then a constant, almost unchanged customer base is formed here, and even exhibitions are held by agreement with all participants, especially if there are not too many of them. Here you can already promote your services as you wish, but the most effective is simply to get to know people at other exhibitions, find them in person, that is, not to advertise your activities too much. What is unusual for entrepreneurship, to put it mildly.

The cost of opening one show-room can vary greatly. Yes, right, depending on the format of the work Indeed, when opening a “sofa” store at home or in an apartment, it’s enough to allocate funds only for the purchase of the first batch (the experience of successful entrepreneurs of this plan suggests that the amount varies between 200-400 thousand rubles for clothes). If you rent a room, then there will already be additional expenses that can increase the amount of starting investments by several times.

A simple show-room, not elite, can be opened for up to one million rubles, this includes repair and rental of premises or premises, purchase of sales equipment, remuneration of employees and other similar expenses. Show-room, which offers trade in branded things, in which presentations are held, shows are held and a large number of additional services are offered, will cost several million rubles.

There are plenty of options for what to spend your money on. However, it is best to start all the same with something small and only after gradually develop, but this has also been said. As for profit, most players note that the payback period for a simple project to open a show-room is no more than a year, which is pretty good. Profitability can be very high if you trade in unique, but at the same time demanded goods, or create a very good reputation for your place and lease it out at a very high price. That is, a considerable margin (several hundred percent) plays the whole role here. But to come to this, you will have to spend a lot of time and effort. In general, such a business is suitable for both novice entrepreneurs who want to start selling their goods with small investments, and large companies that seek to expand their field of activity.

Matthias Laudanum

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08/18/2019

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