Have you ever wanted to run your own thrift store or secondhand shop? With the right approach, your thrift businesses can be successful and profitable. If you’re interested in becoming a thrift store owner, you’ll need a business plan that outlines your objectives and vision.
Follow this step-by-step thrift store business plan template and turn your startup thrift shop into a successful venture your customers will enjoy visiting.
Step One: Create an Executive Summary
An executive summary is a brief look into what your business is all about. It summarizes everything from business objectives to the types of products you want to sell and the experiences you want to convey to your customers. You should include these elements in your thrift shop’s summary:
- Mission Statement: Explain what your thrift shop hopes to achieve and what makes it stand out. For instance, you might open a thrift store to offer your local community affordable, gently-used clothing, with the sales proceeds supporting a nearby humane society for pets.
- Business Goals: Outline what success will look like for your thrift shop, when you expect it to turn a profit, and if you plan to expand to additional locations.
- Business Focus: Detail what items your shop specializes in and the shopping experience you want to provide your customers.
- Financial Overview: You’ll need to outline the initial funding required to cover all startup costs for your thrift business. Then, provide an estimated revenue projection for the first year to demonstrate its expected profitability.
Potential stakeholders in your thrift store, such as partners looking to financially support your nonprofit organization and its mission, often read the executive summary first. Keep each point concise, clear, and compelling to maximize the chances of getting them on board. The summary must achieve two objectives: demonstrating the thrift shop can be run as a profitable business and explaining how it advances the nonprofit’s goals.
Step Two: Write a Business Overview
Think of your thrift store’s business overview as its business card, introducing its essential details at a glance. It should include:
- The business’ complete name
- Geographic location
- Business structure, such as 501(c)(3) organization, sole proprietorship, LLC, or corporation
- Short version of the mission statement
- Brief explanation of the shop’s purpose, core values, and future goals
Potential partners and investors use your business overview to understand your shop’s identity and what sets it apart from other thrift shops.
Step Three: Conduct Industry and Market Analysis
Starting a thrift store is a challenge. The thrift store industry is a competitive environment with a mix of different business types. Depending on your location and target market, your competitors may include independent mom-and-pop stores, online ventures, or large and established chains like Goodwill and Savers.
Research the current state of the thrift shop industry and check out what businesses local customers turn to when they want to go thrifting. Then, analyze the type and number of competitors.
Are they primarily independent businesses, or are there bigger chain stores? How many are there in your region? These market research details can help you find a way to differentiate your thrift business and offer items, services, and experiences the competition doesn’t.
Step Four: Perform a Thrift Customer Analysis
All kinds of people love to go thrifting. Look into what type of customers like to visit secondhand shops and analyze their demographics, purchasing behaviors, and reasons for going thrifting.
Are local thrifters budget-conscious customers looking for a great deal, or are they visiting thrift shops to reduce waste and be eco-conscious shoppers? Do they look for vintage items and one-of-a-kind objects, or do they stick to wardrobe staples? The answers can help you understand what your customers are like and how best to answer their needs.
Step Five: Describe Products and Services
Decide whether to specialize in specific items, such as used clothing and accessories, or run your business like a secondhand general store offering a wide variety of goods.
Besides choosing what products to sell, consider providing additional services to your customers to encourage more sales, like donation drop-off points, repairs, and loyalty programs. Choose your approach based on the local community’s needs, giving your customers what they expect while standing out from competing businesses.
Step Six: Outline an Operations Plan
An operations plan is a guide detailing everything your store needs to run smoothly on any given business day. Most operational plans for thrift businesses include:
- Inventory management: Determine the tools and systems the store needs to sort, price, and categorize items. An all-in-one POS system built for thrift stores is ideal and often includes powerful tools to help you automate or streamline inventory management. For instance, they include donation processing tools designed to sort all the items your store will handle.
- Pricing and discounting strategies: Develop strategies to group items into bundles or categorize them by type, color, theming, or other descriptors. These strategies can help you create exclusive deals or seasonal discounts, attracting customers looking to score deals.
Regular deals and discounts incite deal-hunting customers to return to your store more frequently, naturally building loyalty and creating anticipation for your store’s next discounts. - Donation processing: Establish the store’s procedures to source, accept, and sort donated items.
- Staff and training: Define roles, responsibilities, and training standards for each staff member.
- Store layout: Organize your store’s space and determine how items are grouped and showcased to visitors as they navigate your thrift store.
- Customer service: Set guidelines for greeting customers, managing transactions, offering services and assistance, and contributing to a positive shopping experience.
- Finances and budgeting: Detail your store’s procedures for tracking sales and transactions, managing revenues and expenses, and ensuring long-term profitability.
Your shop’s operations plan is the framework for managing a typical business day. A well-designed plan encourages repeated business and keeps thrifters coming back so your store can turn a profit.
Step Seven: Develop a Marketing Plan
Your thrift store’s marketing plan is similar to its operations plan, but specific to marketing and advertising efforts. It should include the strategies your shop will use to increase foot traffic, establish a loyal customer base, and make the store profitable long-term.
Consider all of the following in your marketing plan:
- Branding and Identity: Design your store’s logo, signage, lettering, interior theming, and colors.
- Advertising: Choose how you will promote your store, what advertising channels and digital marketing tools you’ll use, and what messages and values to convey.
- Promotions: Offer loyalty programs to attract customers or entice new business with deals and promotion codes on specific items.
A solid marketing plan should present your secondhand shop in the best possible light. Besides attracting new customers, it contributes to your store’s brand identity, making it more visible and creating a positive reputation.
Step Eight: Identify Your Management Team
The success of your thrift store ultimately comes down to who is running the day-to-day operations. As part of your business plan, you need to identify the staff members who will manage your thrift store, including information on their education, managerial skill set, and industry experience.
Highlight your managers’ backgrounds, showcase how their talents will contribute to the store’s success, and outline their total compensation plan. A credible, trustworthy team will show your investors and partners that your thrift store business is in good hands — and ready to grow into a successful venture!
Step Nine: Build a Financial Plan
Develop a financial plan to get the approval of your investors and potential partners. Your plan should expand on the initial estimates and financial projections in your executive summary with more details.
Outline your shop’s projected expenses and expected revenues so you can assess its profitability over time. Include initial startup purchases and operational spending, like salaries, utilities, and maintenance, in your expenses.
The data will help you estimate how long your business will take to break even, generate financial returns, and become a successful thrift store.
Set Up Your Thrift Store for Success With ThriftCart
A good thrift store business plan is the right solution to turn an idea into a money-making venture. Everything that makes a successful business should be accounted for and planned, from the basic details to day-to-day operations, customer analysis, marketing, and team management.
Once you’re confident in your business plan, it’s time to think about the technology that will support your operations. Every retail store needs a point of sale (POS) solution, and the best in the industry is ThriftCart. Our POS software was developed specifically for nonprofit thrift stores and can support your startup from day one. Book a demo today and discover a simpler, better way to manage your thrift shop’s inventory, operations, finances, and marketing!
