Is This A Good Business Idea? What Are Your Thoughts?

  •  
  •  
  •  
  •  

[wp_campaign_1]

My wife and I love to keep busy. Both of us have full time jobs and also have our own side businesses; hers is photography and mine is blogging. With our multiple sources of income, we have been able to set audacious goals such as paying down all of our student loan debt within 14 months time (we accomplished this in March, 2011), and also to pay off our home mortgage in 4 short years (only 3 years and 2 months to go on this plan).

Since we are knocking down our mortgage loan payoff from an already short time frame of 15 years down to 4, I figured it would fly by in no-time. Well, I was wrong. We’re only 10 months into the plan and I already feel like this mortgage should have been fully paid by now. We still have $61,450 to go! I don’t want to admit it, but I could see us sluffing off on our extra payments soon, mainly because we’re not really paying extra on our house for a purpose other than saving a few bucks on interest.

I know that getting rid of our debt is the next step to becoming ultra-wealthy, but we really need a future goal to look forward to as a tool for motivation.

A New Business Venture?

Personally, I love the blogging business because starting a new website has practically no risks because the start-up is so low! I paid $44 for the first year of my site and earned over $4,000. It was absolutely awesome! However, a blogging business is nothing to depend on. Google could make one change overnight and suddenly your earnings drop from $5,000 per month down to $50. It’s happened to other people, and it could happen to me too.

For this reason, my wife and I are thinking about starting a more tangible business down the road. We’re not thinking about anything too seriously quite yet, but just the brainstorming about a future idea keeps our motivation flowing because we both know that before we start any type of venture, we’d like to have our mortgage paid in full.

The Wedding Dress Shop

Just recently, a local antique store has decided to call it quits. The knick-knacks are out and the for sale sign is up, and it got my wife and I thinking about what businesses might thrive in that location.

My wife absolutely loves weddings, and I think her next greatest passion is fashion. Meld those two areas together and what do you get? Wedding dresses of course. Naturally then, she thought that this location would be suited perfectly for a wedding dress shop. Given the demographics and the style of the location, I actually agree with her 100%. For fun, we decided to dig into the numbers to see if the business was practical.

Get Rid of Our Mortgage

Like I stated before, we’re committed to getting rid of our home loan before starting a new venture. So, with our current payments of $1,911 per month, we could start considering a new venture 3 years and 2 months from now. But, if we really got serious about getting rid of this debt, I think we could increase our payment to $2,400, which would allow us to pay off our home loan in just 2 years and 6 months.

Purchase the Antique Store

The store is currently listed for $324,900, which we believe is a little high. It’s already been on the market for 260 days and hasn’t stirred a ton on interest. If this place is still on the market in 2.5 years, we’re certain that we could buy it for just $225,000.

If the accommodations permitted, I wouldn’t mind living in the store to keep expenses low, but let’s just assume that we stay living in our fully paid-for house for now.

Non-Wedding Shop Income

The asking price includes not only the antique store, but also a builders office that is earning rental income. Upon purchase, my wife and I plan on receiving $800 per month for this unit.

There also is enough room in the store to rent out some space for local photographers. This side-room would be all set up with backdrops and lighting and could be rented by photographers that are taking professional photos. This would most likely bring in at least another $500 per month.

The Wedding Shop

Of course, this is where the real income would come from. Since we only need to house the sample dresses in the store, our expenses would stay low (would only need to invest about $10,000 initially), but if we were able to sell just 150 dresses per year (that’s only 3 per week), our profits from the markup would be right around $100,000.

The Big Draw

If you’ve ever been a bride, you know that one of the toughest things to do is visualize a sample dress as a different color. Do you know what I mean? Maybe you love the style of the dress, but the sample is only in stark white. You’d really like to purchase the dress in champagne. Sometimes you just have to go by faith and figure the dress will be beautiful, even though you’ve never seen it.

With my wife’s skills in graphic design, this blind purchase will never happen again. She can take a photo of you in the sample dress, and then alter the color to what you want – all in a matter of seconds! I think that this simple skill will separate our bridal store from all the others.

What do you think of this business idea? Is it crazy? Or does it sound like it has potential?

If you enjoyed this article, Get email updates (It’s Free!)


  •  
  •  
  •  
  •  
  •  
  •  
  •  

Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

34 Comments

  1. Well, if she can deal with Bridezillas, it might work fine! Remember, with a bride it’s all about ME ME ME, and they’re usually not shy about saying so!

    Can she easily deal with that sort of customer?

    What about fitting and seamstress work? I have virtually NEVER heard of a bride that liked the fit of her dress once purchased. They almost always have to be customized for the individual, even if ordered by measurement. Can your wife do that? Probably she wouldn’t have time if all her time is on the selling end, so she would need to hire or contract a seamstress, and it would need to be a very, very good one, to deal with those expensive dresses.

    Also for side income, does your wife know any wedding planners? She could possibly rent some “referral” space to them as well, or otherwise get a cut of their fee if she refers them. Many brides start out not having a clue what they want, so the general idea is to solve all their problems for them…the more problems solved within the confines of your shop, the more business you will have….a one-stop-shopping type of experience. (Really, isn’t “solve your problems” the basis for ALL successful businesses?)
    gharkness recently posted..Anti Candida Diet Guidelines

    • She would do fabulously with bridezillas. She just has a way with people. As for the seamstress work, we do have a few contacts already through various weddings we’ve been involved with. I’m sure we could find somebody. Great idea about the wedding planners. I think in the future, if we actually got serious about this idea, we would work to create 7-8 different businesses in the same location to cover all of the bride’s needs. Flowers, photography, dress, cake, etc. A one-stop shop for brides! 🙂

  2. You are right about blogging. It can change any minute. How is her photography business? If you tie it in with the bridal shop you might be able to make a killing.
    Jai Catalano recently posted..PX This – A Story Of Fate

    • I think my wife would love to tie in her photography to a wedding dress business. She’d be busy, but she could handle it.

  3. As gharkness said, there are some serious potential stress issues in dealing with bridezillas, but if that’s tolerable, the idea has a lot of potential.

    Even if wedding trends go “thrifty”, I don’t see a lot of brides giving up on their wedding dresses. Heck, you can buy them back for rentals if that happens anyways!

    • Good point SFH. Brides typically want a fairy tale wedding whether it’s a down economy or not. Dresses will always be in demand.

  4. As someone who was just recently shopping for wedding dresses, being able to see a dress in a different color on you should be a big hit. I know that I heard a few other brides asking the dress shop workers if they had any color snippets they could view (they didn’t). And as your wife does photographs, what about offering a package deal?
    bogofdebt recently posted..Spending Recap 7/2-7/8

    • I’m glad you commented about the color change capability. I think that would be absolutely huge! I think once a few brides experience it, business would start booming! The package deal is a great idea as well. She could do invitations, photography, the dress, and she actually dabbles in cake baking as well! 🙂

  5. Is the picture above the actual location? If so, it looks like a small town. I don’t know if you can sell wedding dresses at a reasonable price and still meet your monthly obligations.
    On one hand, they say that during a recession it is the best time to start a business, but on the other hand, this could be a high ticket item in this economy.
    I agree with the poster who said to incorporate the photo business somehow too.
    Good Luck whatever you decide.

    • It is the actual location. The town certainly is small, but it’s between two larger towns (not too far away). I think given the area though, the wedding dresses would all have to be priced less than $1,000. Thanks for the comment!

  6. How much up front to buy all the samples, one each style and size? Do you have anyone to make alterations? What if the builder retires or moves?
    There is an empty grocery store here that’s been on the market for a couple of years, its asking price is now half of where it started.

    • The samples would cost between $100 and $300 each. Typically you’d get multiple styles, but one standard size (typically an 8 or so). If the builder retires or moves, I don’t think it would be too difficult to rent out the space to a small law firm or a consultant business.

  7. Great comments by everyone else! Good questions/food for thought. Maybe between your wife’s skills and mine, our families could give it a go. You line up the dresses and photography for weddings and my wife could do the flowers for the weddings from her business – http://www.floralelegancebychristine.blogspot.com 🙂

    • I like the idea. The bigger the network, the easier it is to build each business.

  8. Weddings never go out of style, so the business has lasting power. Dealing with bridezillas probably wouldn’t be so bad as long as you give them good customer service. It sounds like you’ve got plenty of time to do your research and make sure its a good idea. If your wife does any wedding photography in the area, there’s no harm in doing some market research by asking the brides where they got their dresses. If the majority of them say they went out of town because there wasn’t anything local, you might have a great opportunity.
    Shane @ Beating Broke recently posted..Reducing Your Debt: Much Better than a Snowballs Chance

    • Thanks for the comment Shane. I like your idea of “polling” the current customers about their wedding dress experience. It certainly would be an effective way to analyze the local market.

  9. I like the idea of the wedding dress shop, but will you be able to sell 3 a week? Depends on the area you live. Also, I the comment about bridezilla…. they are out there!
    julie recently posted..7-9-2012 Monday Morning Free Reads

    • The 3 dresses a week is just an estimate. I’ll have to dig into that one a little more if we start pursuing this business. Thanks for the comment!

  10. Sounds like a decent idea if you are confident in the sales numbers. I also think there is huge potential to tie in he photography business as well. Good pro photographers make a killing on weddings.
    Lance@MoneyLife&More recently posted..My First Job: Crazy Stories

    • We’d certainly have to give it some more research, but I think it could actually be a solid business! We’ll keep you posted on any further thoughts.

  11. One of the advantages of your plan is that your wife loves weddings. Finding something you’re passionate about can almost always translate into income if the effort level and determination is there.

    • Very true! And, I was getting a little excited about the analysis of the sales and income! Lol. i think we’d definitely work well together.

  12. I love thinking about different business ideas that I would want to pursue. I have never really seen myself working in the “corporate” world all of my life. I lately I have been trying to narrow down exactly what I would be passionate enough to do. I would also be interested in helping someone else start their own business. It is always fun to think about!

    • Same here Kyle. I don’t think I’m really a corporate guy either. I feel like I could work my butt off in the corporate world and maybe earn a raise of a couple thousand bucks for the year. But, if I put those same efforts toward my business, I could increase my earnings by $20-30k or more! I’m always thinking about potential business ideas for the future.

  13. There’s a ton of money to be made off the wedding industry . I think this is a terrific idea. Does she already photograph weddings? Has she advertised in wedding directories? This might help if she knows where to start when it comes to advertising. Obviously, if she’s running the shop, she might not be able to pursue photography as much as she’d like, but she could offer her services in packages. Good luck and keep us posted!
    Little House recently posted..June Progress Monitoring – Need I Be Honest?

    • She does already photograph weddings and is fantastic at it. I think that once the shop would get going, she could hire someone to work the store while she takes some pictures. Then, she could always work on editing and such while she’s manning the shop.

  14. I assume when she works for the wedding dress store, she would quit her day job? If so, have you run the numbers how they compare; store profit vs. salary? It’s prudent to prepare some cash flow statements for the business so you may get an idea on that front as well.

    In addition, once you buy the store, you are tied to that particular location forever. Is there any chance that you might be relocating somewhere for your job? Do you guys like the town?
    Early Financial Freedom recently posted..Having Clear Goals, Paying Its Dues and Reaping Its Benefits

    • I haven’t looked too closely at the numbers since this is more of a pipe dream at this point, but I think they would be pretty comparable, even for the first couple of years. Once things take off, then I think she could be earning much more than her salary.

      As for the relocating, I don’t see us moving anywhere for a long while. We actually just moved back to this area because we missed it so much! 🙂

    • Online margins are great, but I don’t know if I’d want to keep watching my back for Google’s latest update that could screw me… Within 2-3 years though, who knows, maybe I’ll have an online business of my own to compliment the brick-and-mortar one.

        • Those are my thoughts too. I’d like to start online and keep costs low at first. If we find out that there is a local need, then go for the B&M. Thanks for giving your two cents FS!

  15. Derek-I’m assuming that you’re buying the property given the 800 a month you’d be receiving from rental income? If that is the case, perhaps put aside your business idea and look at the actual property value to determine viability. As you are starting a new venture at the location, there is no goodwill nor should you pay for any. Even if you were able to acquire the location for 225k, is there a rational reason to go into that much debt when you could easily start your venture for substantially less money by leasing a spot without asssuming 225k debt.
    Your business idea may or may not have merit but it may be more prudent to determine if it can be done without assuming that much long term debt. Even if you could buy the place for cash AFTER you’ve paid off your mortgage, again the same reasoning would, in my opinion, apply. Think of the things you guys could invest 225k cash in instead of this location and still give your venture a whirl.
    Agio
    P.S. I own a few businesses.

    • Good point Agio. I always like the idea of buying over leasing, because then there’s also another aspect of value to the business. However, leasing would be a cheaper option, and could keep us in business longer since our cashflow would be up. While I never really think about leasing as an option, I do see your point. Thanks for the comment!


Add a Comment

Your email address will not be published. Required fields are marked *

CommentLuv badge

Related posts