Picking the right name for your consignment shop is critical, but it should also be fun. Here are some things to keep in mind while you brainstorm.

There are some legal issues to be aware of with picking a name, but actually its not anything to get too paranoid about. If you really want to be 120% sure about your name, check with a lawyer. In fact, though a few hours with a lawyer may eat into a couple hundred dollars worth of your startup budget, it is definitely a good idea.

At your meeting you can talk about business structures, the name you want, things to look for in a lease, and your county and town’s business license requirements and more. However, if you’ve already picked one or two names you’d like to use before you meet with a lawyer, you’ll make much better use of their time.

Here are the rough rules for picking a business name: you can have any name you want, just so long as 1) no one in your state is already running a business under that name or 2) no one in the country is running a trademarked business under that name.

You can check to see if there is another business operating under the name you want by doing a few internet searches (try each of the three major search engines). Most states also offer free business name availability checks online. Google “check business name availability” and your state and you’ll probably find what you want. Be sure to print out the results of your research… just in case anyone ever challenges your name, at least you’ll be able to show that you did check if the name was available.

You usually do not have to register your business name. If your business structure is going to be a corporation, an LLC, or a limited partnership, your business name will be automatically registered when you file your paperwork.

You also probably do not need to get your name trademarked. But if you have any dreams of opening chain stores, or doing any kind of business beyond your state (maybe like an eBay store), you might want to consider it. Trademarking costs about $500 and takes a while. You will need to have a logo designed and registered as your trademark symbol. Generally this is way more than the typical consignment shop needs.

So… now that we’re past the legal issues — what makes a good name? It should be easy to remember, easy to understand, and easy to spell. It is very important that your shop name telegraphs what it is, so that anyone can immediately know what you do. Some stores have gotten away with obscure names, but it is an uphill battle. For 90% of the population, if they do not immediately understand what you do, they will immediately forget you.

Here are just a few sample names to get the brainstorming started:

- Your Town Name Consignment
- Your Town Name What You are Selling Consignment (ie, “Smalltown Clothing Consignment”)
- Your Name What You Are Selling Consignment (ie, “Cheryl’s Equestrian Consignment”)
- As Good As New Consignment
- Renewed Consignment
- Better Than Ever Consignment
- Like an Old Friend Consignment
- Lots of Wear Left Consignment

A recent survey by Business Plan Pro showed that startup companies that wrote a business plan were twice as likely to succeed as companies that wrote no plan.

You should take that with a grain of salt, because Business Plan Pro is in the business of selling its software, but the point holds, and business management professionals have said for decades that if you really want to succeed, you write a business plan. And if you want outside funding, like a loan or investor capital, don’t even bother without a business plan.

The business plan you write for your consignment shop does not have to be a book, and it does not have to be intimidating. If you can only manage five pages, that’s a great start. Here are the main parts of a standard business plan:

1) Executive summary. You actually write this last, but let’s talk about it first anyway. Think of this as an elevator speech that summarizes your business plan. In other words, if you had to summarize your entire business plan into a few paragraphs that would inspire and impress someone so much that they would give you money to start your business, that would be the executive summary.

2) Business analysis. This is where you outline what structure your business will have (LLC, limited partnership, etc) and give a high-level view of what you want to do, who your customers will be, how much competition there is and how strong or weak it is.

3) Marketing strategy. How will you promote this business? How much will it cost to promote? What advantages will selecting a specific niche give you? Frequently people do a SWOT analysis (strengthes, weakenesses, opportunities and threats) for both their business and their top 1-3 existing competitors.

4) Products and Services. Hopefully you really like what you’re going to be selling, and you are really excited about any other services you’ll be offering (like being an eBay consignment store, for example). Write about those in detail, including where you’ll get your goods and how you’ll manage inventory.

5) Management Plan. Who are you? Why would you be good at this? If you are going to have a store manager, and if you’ve already selected a couple of employees, now is the time to introduce them and sing their praises.

6) Financial Plan. Get help from an accountant if you’re anxious about doing this, but you can probably do it on your own. This is where you “do the math” to prove your consignment shop can be a financial success. You’ll need to know about costs for rent and other expenses, like advertising, payroll, electricity, a website, paying consignees and everything else. Include what you need to buy to start your shop.

And that’s it. Really, the main benefit of writing a business plan is not necessarily the final product — its the work it makes you do to get those final printed pages. By the time you are done writing your business plan, you will be keenly aware of all the details about your business. You will have a realistic idea of what you can and can not do, and you’ll know how much it will all cost. This is essential information for your first few months of business.

It is an extremely wise idea to get some real-world experience in the resale business before you attempt to launch your own consignment or second-hand store.

Even a few days spent at this effort will teach you volumes of critical information that you need to know to make your store a success. In fact, after writing the business plan, getting a bit of resale experience should be next on the list of your must-do consignment store planning.

So, where to get this experience? Here are several ways to go about it



1) Run one to a few garage sales

Almost anyone can benefit from clearing out their house for a garage sale. If your house is one of the very few that have no junk, try to help a friend or a relative. Hunt down used appliances, clothing, sports gear, gardening gear, tools and whatever you can find. Get some practice in marking items clearly and in getting people to come to the sale. See which kinds of signs work best, and carefully watch how people review the merchandise you have for sale.

2) Get a flea market booth

This is a terrific way to ramp up your business before you have to start paying for a retail location (OK, actually, you will be paying for a retail location, but a booth is cheaper than a lease). You will need several portable tables and a clothes rack if you are selling clothes.

Doing a booth for a month will teach you a tremendous amount about pricing and how people shop. If you have a website, or if you are gathering a list of email address to send a grand opening announcement to, be assertive about getting people to fill out their names and information. That customer list will become your best marketing tool.

3) Work in a Consignment Store

Even a short stay and a Salvation Army or a Goodwill Store is much better than nothing. You may run into some issues of competition if you are working in a consignment store that sells similar things to what you want to be selling. Its up to you if you discuss your business plan with your current employer, but honesty generally is the best policy.

Working in the rows will give you intimate knowledge of payment options, stocking, traffic flow, layaway policies, security and a bunch of other issues that you can not learn just doing a garage sale or a flea market booth.

4) Work at an Antique Store or a Antique Show or an Auction House

Antiques are a world unto themselves, but if you are going to be selling furniture or high-end housewares in your consignment store, the issues around antiques are going to come up, and you had better know about them sooner or later. Another nice benefit to doing these shows, or working in a store, is that you’ll meet all sorts of people “in the biz”. One of them who wants to unload a bunch of their inventory for cheap might be a goldmine for your stores startup inventory.

Many consignment store owners recommend buying an existing store rather than starting your own from scratch.

There are pros and cons to doing this versus starting up from nothing.

The Pros of Buying an Existing Store

- The location is already decided, and you have a good idea how well it works for the store

- The clientele are established, both consignors and buyers


- There are existing financial records, so you know much, much more about how the store is performing than when you do a startup.

- If you do an “asset purchase” you will be getting all the store’s inventory, the building lease (or the building, if they own it) and all the equipment uses to run the store. Getting all the inventory and all the marketing materials and all the equipment in one fell swoop is a gigantic time-saver, and you will probably spend much less to buy them this way than you would if you bought the equipment a la carte at retail prices.

- If you do a “stock purchase” you will be buying everything in the store and all the financial obligations and monies owed.

The Cons of Buying an Established Store

- You must do a thorough investigation of all parts of the current store, especially their legal and financial health and obligations, or you could be walking into a nightmare. You will need to hire a lawyer to review the terms of the sale, and a CPA to review the books of the store.

- If the store has a bad reputation, even with some customers, you are buying that bad reputation. Putting up an “Under New Ownership” sign may help a little, but once people have a judgment about a store it is hard to change it.

- The store may not be profitable, and you may end up spending a lot of money with a lawyer and a CPA and doing negotiations with an unrealistic owner before you have to let go and move on

- The store may have hidden legal or financial problems that (for whatever reason) do not turn up during your due diligence research

After you’ve weighed all those issues, it may still be a very good choice to buy a store. So how much should you expect to pay for a consignment store? It varies widely — typically business valuation can be 3 years profits or 3 years sales. If the building is owned instead of leased, that will also affect the price. Historically a consignment store can go for anywhere between $20,000 to $250,000, depending on how large it is, where it is, and how much business it is doing.

If you can, try to get a clause put into your purchase agreement that lets you work in the store for two weeks, then gives you the option to re-negotiate the contract after that period. Or, just ask the owner if they will let you help out for two weeks to really get a handle on how the store is operating. Those two weeks will be time well spent.

Another critical thing to know is why the current store owner wants to get out. Maybe they want to retire, or maybe their health requires them to work less. They may also have burnout, and while almost every business owner alive has had a case of burnout at one time or another, if there’s is severe, and they say they just want to get out of the business as fast as possible, you need to ask more questions about how they got so desperate.

Finally, if a current owner ever gives you any resistance about getting financial information, or any other information about the store, put up your problem radar immediately. If they flat out refuse to supply you with something, that is a serious red flag that could be the proverbial “deal-killer”.