Hello fellow entrepreneurs,
I'm in the vaping industry since almost 2 year ago, in the manufacturing area. Lately I've been thinking of diversifying/expanding my business by setting up a vape shop in a touristic European city (where I grew up).
A location at a prime street it's not cheap. 3.700€ at month incl. taxes and expenses. If we would add an employee it'd be 1.500€ incl. taxes and social security. As an initial investment we have: -Paper work= ~1000€ -3 months rent as deposit + first month= 14.800€ -Some local renovation works to fine tune it (although the place is quite neat already) = ~2000€ -Furniture, signs, decoration, packaging, website= ~4000€ -Initial stock= ~4000€ (usually distros will give you 2 months to pay, specially since they already know me, but counting this in anyways).
Roughly 26k as initial investment and 5.200€ at month with an employee inside.
The plan looks promising: I've done a lot of market research, discussed it with several colleagues that owns shops in the country, have a clear branding/concept and found the exact location, far from competitors etc. By placing the store at a prime street a big percentage of the sales should be secured right away due to the huge passers-by traffic (5-10k pedestrians at day all year around). It's a very fair estimation that during the tough first year, relying only on passer-by pedestrians we can hit 16-20k in gross revenue monthly to break even. Covering clientele needs from "I want to quit smoking" and expert gourmet vaper to CBD products, oppening 7 days at week.
Finances: I have 30k for this project, enough to start, and even to throw some "guerrilla marketing" right of the batch, hiring some local social media influencers and youtubers to make some noise. But that money is not enough to cover possible surprises or the worst possible scenario in which the first 3-5 months we wouldn't sell nothing at all... To be on the save side I would need an extra 20-30k.
THIS IS THE HARD ONE:
Bank loan? Hard to get since I don't have a long record, only 1 year of income registered from the manufacturing business. (I'm 33years old, been doing different masters getting scholarships and traveling around until 3 years ago, not that proud of it now). Unless they are signed into the company, and that serves as a security asset for them??
Venture capital? Too small for a VC to even look at.
Angel investors? Maybe the best solution, but never done it before. How to make it fair for both parts? Should I let go of a 20-30% of the business for 20-30k? Is is too little or too much? It feels unfair having to pay such percentage for a life time for that amount of money isn't it?
Franchisee? I've been researching and none is willing to help with investment. Plus, paying 7% of the gross revenue as royalties seems abusive.
Wait and save? Should I wait a half year or more until I have saved all the money myself? It's risky because vape stores are blooming lately and by the time I have the money there could be competition in the arear or not that price/location local available at the moment.
Thanks in advance
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