Research
These tend to be quite personal businesses so you need to look carefully at what you are being offered. Something that has been its owner's pride and joy for the last 20 years might need more work on it that if you just started afresh.
The evaluation of the shop will be based on the stock being passed on, the fixtures and fittings and, most importantly, the good will. But how do you know you're getting value for money? Getting advice from someone already in the trade can be helpful at this point. Other shop owners are usually happy to help as long as you are not in direct competition - try asking someone completely outside your area.
Good will, however, is especially difficult to quantify. Jeremy Hayward, a senior manager at Lloyds TSB, explains the best way, "Look at the business in terms of the strength of its reputation in the local area and its location - is it too near other businesses or too far away from town. And look for evidence of repeat business in the accounts."
If you are borrowing money from the bank, it will expect to see evidence you have researched the business. Alex Connelly is the director of startups and small businesses at Barclays. He says:
"Show awareness of the size of the market in your area, where any competition lies and therefore how you will market yourself in the area. Then how you are planning to cope with the large levels of stock required and the fairly rapid changes in consumer taste."
These are largely standard for any retail business but particularly important for a niche industry. You should produce a business plan of these details before you approach the bank.
And it might sound obvious but make sure you really want to go into the business. One transfer agent admitted that occasion wear outlets are difficult to sell because they are so intrinsically linked with their owner.
For example, rather as owners start to look like their dogs and vice versa, so the shop can reflect the tastes and dress sense of the proprietor. How are you to know that if you get rid of the lace and bows a devoted customer base won't follow?
And the agent is fully aware of this. If you show interest, they will really "chase you hard" for a sale. Be prepared for that.
What do you need to know?
Although you will probably have to order in specific items for customers, it's very important to have a good range of stock in. Even if people think they know what they're looking for, it's likely they will still want a choice.
The best way to meet your main suppliers - and to find out which you want to use in the future - is to attend one of the bridal and occasion wear trade shows. Genevieve Lovegrove of Four Weddings and a Party in Northampton, says,
"The main shows are in Harrogate in March and September. I have about eight or nine designers in stock and this is when I go to see what all of them has on offer. This is better than reps coming to visit and you get to compare all the different styles."
She says its best also to have a range of prices as well -to ensure you have something for most pockets. "I have an price range of £200 to £1700. This strikes a good balance between the top end and the more moderately priced."
With the dress hire side, there are no hard an fast rules as to how often you will need to replace stock. Obviously, you need to keep an eye on changing fashions and update the styles. But you might hire out a dress 15 times and it stays immaculate and popular. Equally, after one hire someone will decide they want to buy it and it will have to be replaced.
Genevieve says she has dresses that she's been hiring out since she opened her shop four years ago. Very few actually wear out. Rotation of stock is something to be judged and monitored month by month.