Thinking about opening a costume sales and rental business? We tell you what you need to know to get started.
Costume Sale & Rental Business Dynamics
The costume sales and rentals industry is a somewhat complicated marketplace that is subject to seasonal trends and demand fluctuations. As you might imagine, September and October are big months as hordes of consumers shop for Halloween costumes. However, with an intentional strategy, costume retail entrepreneurs can continue to attract a trickle of customers throughout the year.
During the planning stages, you will need to decide whether you plan to operate your startup as a pop-up (seasonal) business or on a 12-month basis. The advantage of pop-up retail is that limits your expenses to the season(s) when you earn the most revenue. At the same time, 12-month retailers often have a market advantage because they have a permanent market presence.
Since pop-up business models are often restricted to the availability of pop-up space, you will need to determine whether short-term retail leases are an option in your area before you commit to a seasonal costume sale and rental business model.
Increasing Profit Margins in a Costume Startup
In the retail universe, net income is directly related to the profit margin on merchandise. For costume sales and rental entrepreneurs, profit margins are typically limited to the pricing you are able to achieve from costume wholesalers. Competitive retail pricing concerns will only allow you to increase your prices so much. Unless you are able to reduce operating costs, your startup's net income will be determined exclusively by wholesalers.
To boost profit margins, you may want to consider expanding your operation to include costume manufacturing. With relatively little effort, you can create an assortment of internally manufactured costumes – and receive a much higher profit margin with each sale.
Viral Marketing Tips for Costume Sales & Rental Businesses
Many brick-and-mortar costume storeowners view the Internet as a threat. Since they don't incur the overhead costs associated with a storefront operation, online costume providers are able to leverage discount pricing, gradually squeezing brick-and-mortar shops out of business.
A better approach is for brick-and-mortar costume retailers to view the Internet as an ally rather than as an enemy. Smart startup costume retailers incorporate an ecommerce component into their business strategy. But more importantly, you can leverage the Internet as a way to promote viral marketing messages about your store.
Using social media and other online resources, you can generate buzz about your costumes in the local community. A great business website, email discounts, pics of new costume lines and other tactics can be employed to produce a viral marketing campaign that makes your startup the go-to place for costumes in your market.
Business Plan Mechanics for Costume Sales & Rental Businesses
Haven't created a business plan for your costume sales and rental business yet? You could be in big trouble.
At Gaebler, we advise new business owners to keep your business plan simple. Even though there are certain issues your plan needs to address, business plans are fluid documents that are intended to adapt alongside your costume sales and rental business.
As your company matures, you can circle back to your business plan to make revisions and adjustments.
Consider the Competition
Prior to opening a costume sales and rental business in your area, it's worthwhile to find out how strong the competition is. Use the link below to generate a list of competitors in your city. After following the link, enter your city, state and zip code to get a list of costume sales and rental businesses in your area.
It's important to be aware of what the competition is doing. Take the time to visit the competition to properly assess their strengths and weaknesses.
A Good Source of Advice
After you've evaluated your local competitors, you really ought to learn as much as you can from somebody who is already in the business. If you think your local competitors will give you advice, you're being overoptimistic. The last thing they want to do is help you to be a better competitor.
But, a person who owns a costume sales and rental business in a different city will be much more likely to talk with you, as long as they don't view you as a competitive threat. Many business owners are happy to give advice to new entrepreneurs It can take a while to find an entrepreneur who is willing to talk, but it's well worth the effort.
Where do you find a costume sales and rental business founder outside of your area who is willing to talk?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Advantages of Buying an Established Costume Sales & Rental Business
We know . . . From the time you were a kid you dreamed about starting a business from scratch and growing it to a position of market dominance.
Yet a healthier and safer strategy may be to purchase an existing costume sales and rental business.
Most notably, a costume sales and rental business includes more than just assets - a brand identity and customer base come with the keys to the front door. And that's not to mention the fact that a purchase let's you avoid the trial-and-error mistakes that are common in startups.
Is Franchising the Right Option?
Your odds of doing well with your venture are much greater when you opt to franchise and benefit from the prior work of others and their lessons learned.
Prior to making the decision to open a costume sales and rental business, a smart move is to check out whether franchise opportunities in your space might simplify your entering the business.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you currently own a costume sales and rental business, these resources will come in handy:
If you sell to costume sales and rental businesses, we've got better information for you elsewhere on our site. These resources are more appropriate for you:
If you are interested in starting a different kind of business, please browse our directory of guides below.