Last Updated on September 22, 2023
Looking to open a thrift store? Step one is creating a thrift store business plan. Don’t worry, we have a sample plan ready for you, which will make the process much easier. Before working on your business plan, you want to check out some examples of plans related to retail stores. You’ll learn a lot by studying these examples.
These sample business plans will help you understand your goals better. They’ll also show you the various sections successful entrepreneurs include in their plans and the language they use to describe their businesses.
We’ve put together a sample business plan for a thrift store to guide you. This should give you a clear picture of what an excellent business plan looks like and the details you need to consider for your own impressive plan.
What is a Business Plan?
A business plan is like a roadmap for your thrift store. It shows where you are now and how you plan to grow over the next five years.
It outlines your business aims and how you plan to achieve them. Plus, it includes data from market research to back up your strategies.
So, if you’re thinking of setting up a thrift store or want to expand an existing one, you need a business plan, even if you are starting a thrift store with no money.
It can help you secure investment (if required) and strategize your thrift store’s growth, enhancing your chances of success.
Your thrift store business plan is a dynamic tool that should be updated yearly to reflect your business’s evolution and changes.
Thrift Store Business Plan
So, how do you write a thrift store business plan?
1. Executive Summary
Think of your executive summary as a trailer to a movie, it’s usually written at the end because it sums up everything about your business plan. It’s meant to catch the reader’s interest right off the bat. You’ll talk about what kind of thrift store you’re running and where you’re at with it.
- Are you just starting out, wanting to expand an existing store? or
- Do you already have multiple locations?
After that, give them a peek into the rest of your business plan. Give them a snapshot of your industry, your business, your competition, who you’re targeting, your marketing strategies, key team members, and your financial outlook.
Our Thrift Store, named “Thrift Smart” aims to be a prime destination for secondhand goods and vintage items. We will provide high-quality, gently used merchandise at affordable prices, promoting a culture of recycling and sustainability.
2. Company Description
The company analysis is all about your thrift store. There’s a variety of thrift stores out there, like:
- Vintage thrift stores – sell older, retro clothes and shoes that are at least 10 years old.
- Consignment thrift stores – sell pricier items like clothes, shoes, and jewelry that can be resold if they’re in good condition.
- Goodwill thrift stores – accept all types of donations and often employ disadvantaged individuals, benefiting the community.
Beyond explaining what kind of thrift store you’ll run, you should also talk about your business’s background. Answer questions like: Why and when did you start? What have you achieved so far? What is the legal structure of your business (e.g. S-Corp, LLC, or sole proprietorship)?
Thrift Smart” is a brick-and-mortar thrift store based in the bustling city center, making us easily accessible to a diverse range of customers. We deal in a broad spectrum of products, including clothes, accessories, furniture, home decor, books, and more.
“Thrift Smart” offers an array of secondhand items in excellent condition. We specialize in:
Products Clothing Trendy, vintage, and seasonal wear Furniture From antique pieces to modern designs Home Decor Eclectic mix to match various aesthetics Books Bestsellers, classics, and rare finds
Our mission is to encourage the sustainable lifestyle of reusing goods, reducing waste, and saving money while providing an enjoyable shopping experience.
3. Market Analysis
The industry analysis helps you understand your market better and strengthens your strategy. It also shows readers that you know your stuff.
In this section, you should answer:
- How big is the thrift store industry?
- Is the industry growing or shrinking?
- Who are your main competitors and suppliers?
- What trends are shaping the industry?
- What’s the growth forecast for the next 5-10 years?
- How big is your potential market? You can calculate this by checking the national market size and adjusting it based on your local population.
Our primary target market is millennials and Gen-Z individuals who are conscious about sustainability and love hunting for unique, vintage pieces at a bargain. We will also cater to families looking for affordable home goods and clothing.
With growing awareness of environmental issues, thrift stores are gaining popularity. The COVID-19 pandemic also boosted thrift store shopping as more people became budget-conscious.
While there are other thrift stores in the area, “Thrift Smart” sets itself apart by offering curated selections, regular inventory updates, and a pleasant in-store shopping experience.
4. Customer Analysis
In your thrift store business plan, you need a clear understanding of the customers you aim to cater to.
This might include groups such as individuals, families, or those on a low income. Remember that different customer groups will be attracted to different types of thrift stores and marketing strategies.
Try to provide a detailed picture of your potential customers, including factors like their age, gender, location, and income level. Go a step further and try to define what they want and need – the better you understand this, the more successful you’ll be in attracting and keeping them.
5. Competitor Analysis
YOu “must” understand your competitors. Identify who they are – these will likely be other thrift stores close to your location but also include indirect competitors like large retail stores or garage sales.
Try to provide a summary of each of these businesses, noting what they do well and where they fall short. You may not know everything about them, but try to understand key aspects such as:
- The type of thrift stores they run
- The areas they serve
- The customers they target
- Their pricing strategies
- Their strengths and weaknesses
You also should identify what makes your business unique. Will you offer products or services that your competitors don’t? Can you provide better customer service or pricing? This is your competitive advantage.
6. Operations Plan
This section talks about how your thrift store will operate day-to-day and achieve its long-term goals. The operations plan is your roadmap to success.
- Daily processes. This is what you do every day to keep your store running. It includes things like cleaning the store, managing the inventory of items, making work schedules for your staff, taking in new items, and promoting your store.
- Long-term goals. These are the big milestones you’re aiming for. For example, it might be the day you get your XXth customer, or when your store’s earnings reach $X. It could also be when you plan to expand your store to another location.
7. Management Team
Your thrift store’s success depends on a strong team of leaders. Your management team’s job is to make the company grow.
Here’s where you talk about the backgrounds of your key players. Show off the skills and experiences they have that make them good at their job. If you or your team have experience in running a thrift store, that’s great. Make sure to talk about it. Also, share other experiences that you think will help your thrift store succeed.
If you feel your team isn’t complete, think about forming an advisory board. This would be a group of 2 to 8 people who can act as guides for your business. They can help answer questions and give advice on strategy. If necessary, try to find board members who have experience in managing a thrift store, or in nonprofit work and community relations.
Your thrift store can be managed by a small but dedicated team.
|Store Manager||Oversee daily operations, manage staff, customer service|
|Procurement Officer||Source, inspect, and price goods|
|Sales Associates||Assist customers, maintain store appearance|
8. Marketing and Sales Strategy
Your marketing plan is essential for your thrift store business plan. This should include:
- What type of thrift store are you running, and what specific services will you offer? You might offer extra services like skating instruction or food and drink.
- How will your prices compare to your competitors?
- Where is your thrift store located? Discuss how the location will contribute to your success – for instance, is it near a busy neighborhood or a school?
- How will you let people know about your store? You could consider advertising in local papers, distributing flyers, using social media, or relying on word-of-mouth.
Our marketing strategy involves engaging customers through social media platforms, local newspaper advertisements, and in-store promotions.
For sales, we will provide an enjoyable shopping experience by maintaining a clean, organized store with friendly staff ready to assist. We will also offer a loyalty program for regular customers and discounts on bulk purchases.
9. Financial Projections
Our financial projections for the first year of operations are as follows:
Estimated operating expenses are $60,000, including rent, utilities, salaries, and procurement.
Your financial plan is a blueprint that showcases how your money will work for you over the next five years. In the first year, you’ll need to prepare monthly or quarterly reports, then after that, yearly ones. These reports include your income statement, balance sheet, and cash flow statements.
Let’s break each one down:
- Income statement. This is also known as a Profit and Loss (P&L) statement. It’s basically a list of all the money you’re making (revenues), and the money you’re spending (costs). The end result tells you if you’re making a profit or a loss. You’ll need to make some guesses when making your income statement. For example, how much will you charge for the items you’re selling? How much do you think your sales will grow each year? These assumptions will shape your business’ financial future, so try to base them on real data.
- Balance sheets. These sheets display what you own (assets) and what you owe (liabilities). Although these sheets can hold a lot of details, try to keep them simple and focused on important items. For instance, if you spend $50,000 on setting up your store, it won’t give you instant profits, but it’s an asset that will help you make money in the long run. Similarly, if a bank gives you a $50,000 loan, you won’t have to repay it immediately, but over time, it becomes a liability.
- Cash flow statement. This report shows how much money you need to start or grow your business, and ensures that you never run out of cash. Many business owners forget that even if you’re making a profit, you can still run out of cash and go bankrupt.
When you’re preparing your Income Statement and Balance Sheets, don’t forget to include all the key costs related to starting or expanding your store. These costs include:
- Building and outfitting your store
- Store supplies
- Marketing costs
- Staff wages
- Business insurance
- Taxes and permits
- Legal costs
You can add an appendix to your financial plan. This section should include your full financial projections and any documents that support and enhance your plan. For example, you might include a list of products your store will sell, information about your target customers, and details about the areas your store will serve.
11. Exit Strategy
As part of your thrift store business plan, you also include what happens should the business goal fails. If the business doesn’t prove viable, include if you would sell the inventory, recuperate the initial investment as much as possible, and close the store.
Sourcing for Inventory
In a thrift store business, sourcing inventory can be done in several ways. You could also include the funding aspect in your thrift store business plan.
- Donations. A very common method of sourcing inventory from the local community. This can include clothing, books, furniture, and other household items. You can encourage donations by providing donors with discount vouchers or other incentives.
- Estate sales. There are events where families sell their belongings, typically due to a move or after a family member’s death. It’s a great place to find a wide range of items, often in good condition and at a low price.
- Garage sales and yard sales. Garage sales are typically sold for a fraction of their original cost. However, it’s important to arrive early to get the best items.
- Wholesale purchases. Your company can buy large lots of items from wholesale companies, including returned items, overstock from retailers, or products from company liquidations.
- Consignment. In this method, items are placed in the store by owners. When the item sells, the store takes a percentage of the sale, and the rest goes to the item’s owner.
- Online Marketplaces. Platforms such as eBay, Craigslist, and Facebook Marketplace can also be valuable resources for finding inventory.
- Clothing Drives. Your thrift store can host community clothing drives to help gather a large amount of inventory while also promoting our store in the community.
What to Do with Unsold Inventory
It may not be business every day; some days you just have to dust it off and keep going. In your thrift store business plan, you could also discuss what happens to unsold inventory. Here are some ideas.
1. Markdown Sales
You can clear unsold items by marking down the prices over time. This not only encourages purchases but also maintains a steady flow of inventory.
|Time On Shelf||Discount|
|1 month||25% off|
|2 months||50% off|
|3+ months||75% off|
After a certain period, any items still unsold could go into an “everything must go” sale where shoppers can fill a bag for a set price.
Donating unsold items is another excellent option, especially for a thrift store that already operates around the idea of reuse and giving.
|Homeless Shelters||Clothes, blankets|
|Animal Shelters||Towels, bedding|
These organizations often appreciate such contributions, and it provides additional community service.
Recycling is an eco-friendly way to handle unsold items. Many materials, particularly textiles, can be recycled into new products.
|Textiles||Industrial rags, insulation|
|Paper||Recycled paper products|
|Metal||Scrap metal industry|
Before choosing this route, ensure a reliable and ethical recycling service is available in your area.
4. Consignment or Wholesale
Unsold items could be sold to consignment stores or wholesalers who might have a different customer base.
|Consignment Stores||High-quality, brand-name items|
|Wholesalers||Bulk clothing, furniture|
This method may help recover some costs associated with the unsold inventory.
Each strategy has its place, and often a combination is used. The chosen method will depend on factors like the volume and type of unsold items, local resources, and the store’s mission and values.
Pricing items in a thrift store can be a bit tricky as it involves finding a balance between generating revenue and offering customers a good deal. Here are some general steps we follow to price items:
- Evaluate the Item’s Condition: The first step is assessing the condition of the item. New or nearly new items can be priced higher than those showing signs of wear and tear.
- Research: Look at the original retail price of the item, if possible. Also, check similar items in other thrift stores or online platforms like eBay to understand the going rate.
- Calculate the Price: As a rule of thumb, thrift store items are typically priced at 30-50% of the original retail price. However, for more upscale or rare items, we may price up to 60-75% of the original cost, provided the item is still in demand and in excellent condition.
- Consider Seasonality: Seasonal items may be priced slightly higher. For example, winter coats may command higher prices during colder months.
- Factor in Overhead Costs: While we want to offer a great deal, we also need to cover operating expenses like rent, salaries, utilities, etc.
- Price Reduction Strategy: To keep the inventory moving, we may progressively reduce the price of items that have not sold within a certain period. This way, we can make room for new items and maintain a fresh stock.
You can state in your thrift store business plan that your store is always open to negotiation, within reason. If a customer suggests a fair price for an item that’s been sitting on the shelf for a while, you might consider accepting the offer to make the sale.
Attracting customers to a thrift store involves a mix of marketing and in-store strategies. For this section, we will use a first-person (we) point of view to drive home the points.
Here are some of the methods you can include in your thrift store business plan.
1. Social Media Presence
Social media platforms like Instagram, Facebook, and Twitter are invaluable tools for promoting our store. We post photos of unique items, share customer testimonials, announce sales, and engage with our followers.
2. Email Marketing
We collect email addresses from our customers and send them regular updates about new arrivals, special discounts, or events.
3. Window Displays
Attractive window displays can draw in passersby. We change these displays regularly to showcase our newest and most interesting items.
4. Community Engagement
We participate in local events, sponsor charity drives, and collaborate with local businesses to build our brand presence in the community.
5. Loyalty Program
We offer a loyalty program where customers earn points for every purchase, which they can redeem for discounts on future purchases.
6. In-Store Experience
We make sure our store is clean, and well-organized, and that our staff is friendly and helpful. A positive shopping experience can turn a first-time visitor into a repeat customer.
7. Special Sales
We run special sales events (e.g., end-of-season sales, holiday sales) to attract bargain hunters.
8. SEO Optimization
If we have an online store, we use SEO strategies to improve our website’s visibility on search engines.
Partnering with local businesses or influencers for cross-promotions can also be a great way to reach new customers.
10. Word of Mouth
Offering great products at great prices and providing excellent customer service can fuel word-of-mouth referrals, one of the most effective marketing strategies.
How About Any Loyalty Program?
A loyalty program is an excellent tool to retain customers and incentivize repeat purchases. Here’s an example of a simple but effective loyalty program for our thrift store, “Thrift Smart”:
- Treasure points loyalty program. Our customers can join the Treasure Points Loyalty Program free of charge. Here’s how it works:
- Earning points. For every dollar spent in the store, customers earn one Treasure Point. We may also offer double points during special promotional periods or on specific categories of items.
- Redeeming points. Once a customer has accumulated a certain number of points, they can be redeemed for discounts on future purchases. For example, 100 points could be worth a $10 discount.
- Bonus rewards. On top of the points system, we could provide extra rewards for our loyal customers. For instance, customers might get a special birthday discount, early access to sales, or exclusive shopping events.
- Tracking points. Customers can track their points through a mobile app or via our website. Our sales associates can also provide this information in-store.
- Expiration. Points would need to be used within a certain period, say one year, to encourage regular visits to the store.
Free Business Plan for Thrift Store
(Use the PDF)
Marketing Plan for Thrift Store
1. Social media marketing
Use platforms like Instagram and Facebook to showcase our products, interact with customers, and share updates.
|Post photos of unique items, store events, and behind-the-scenes content|
|Share updates, engage in community groups, run targeted ads|
|Share news and updates, engage in relevant conversations|
2. Local Marketing
This involves engaging with the local community through events, partnerships, and local media.
|Local Newspapers||Advertise sales events and new arrivals|
|Community Events||Participate or sponsor to gain visibility|
|Partnerships||Partner with local businesses for cross-promotion|
3. Email Marketing
Send regular newsletters with updates, discounts, and special offers to customers who have opted in.
|Newsletters||Share store updates, new arrivals, and sales events|
|Promotional Emails||Offer special discounts or early access to sales|
|Birthday Emails||Send special birthday discounts or gifts|
4. In-Store Marketing
Create a pleasant shopping environment that encourages customers to spend more time (and money) in the store.
|Window Displays||Attractively showcase new or unique items|
|Store Layout||Organize the store for easy navigation and discovery|
|Signage||Use clear signage to guide customers, highlight sales|
5. Loyalty Program
You could have a “Treasure Points” program that incentivizes repeat purchases by offering points that can be redeemed for discounts.
|Earning Points||Customers earn points for every dollar spent|
|Redeeming Points||Points can be exchanged for discounts on future purchases|
|Bonus Rewards||Offer additional perks like birthday discounts, early access to sales|
Exit Strategy Extended
For our thrift store, “Thrift Smart,” you can have the following exit strategies:
In this case, you could sell off all the store’s assets, including inventory, fixtures, and any other equipment. The cash generated could be used to pay off any debts or liabilities, and any remaining money would be the profit.
2. Sale of the Business
Alternatively, your store can sell the entire business to a competitor or another interested party. In this case, you would need to accurately evaluate the business’s worth, which would include tangible assets (inventory, equipment, etc.) and intangible assets (brand reputation, customer base, etc.).
3. Merger or Acquisition
You could consider merging with another business or allowing a larger company to acquire your thrift store. This would typically provide a higher return compared to liquidation but would require finding a suitable partner or buyer.
Here’s how we would plan and implement these strategies:
|Steps||Liquidation||Sale of Business||Merger/Acquisition|
|Planning||Evaluate what assets can be sold and estimate their worth. Plan a liquidation sale.||Evaluate the business’s worth, including both tangible and intangible assets. Prepare financial statements and business plans.||Identify potential partners or buyers. Evaluate the business’s worth.|
|Execution||Sell all assets. Use proceeds to pay off any debts.||List the business for sale. Negotiate with potential buyers.||Negotiate terms with the partner or buyer.|
|Transition||Close down the store. Cancel any contracts (lease, utilities, etc.)||Hand over operations to the new owner. Assist in the transition, if agreed upon.||Merge operations with the partner company or hand over to the new owner.|
|Post-Exit||Pay taxes on any profit. Finalize any remaining paperwork.||Depending on the agreement, may continue to work in the business or depart after the transition.||Depending on the agreement, may continue to work in the business or depart after the transition.|
- Store manager. The store manager is responsible for the overall functioning of the store. They handle hiring, training, scheduling, inventory management, and store operations. They’re also in charge of handling any escalated customer service issues.
- Assistant manager. The assistant manager supports the store manager in their duties and steps in when the store manager is unavailable. They might have specific duties such as overseeing merchandising or employee training.
- Cashiers. Cashiers handle the checkout process, ringing up sales, bagging items, and processing returns or exchanges. They should be friendly and able to handle transactions swiftly and accurately.
- Sales associates. Sales associates are responsible for assisting customers on the shop floor. They answer questions, help locate items, and might also handle fitting rooms if applicable. Their goal is to create a pleasant shopping experience for every customer.
- Merchandiser/Stock Associate. The merchandiser is in charge of creating attractive displays in the store and organizing the store layout. They might also handle restocking tasks. The stock associate is primarily responsible for sorting and pricing donations, maintaining inventory, and restocking shelves.
- Janitor/Cleaner. A janitor or cleaner is vital to keep the store clean and tidy. This includes sweeping and mopping floors, dusting, cleaning restrooms, and removing trash.
Handling Customer Complaints
Should you have to include the customer complaint handling section, use this as a guide:
1. You Would Listen Actively
When a customer has a complaint, the first step is to listen attentively to their concerns without interrupting. Make the customer feel heard and understood.
2. Apologize and Empathize
Even if the complaint isn’t the store’s fault, apologize to the customer for their negative experience. You have to show empathy and understanding – this can often defuse a tense situation.
3. Ask Questions and Clarify
If the issue is not clear, ask for more details. You would have to be sure to understand the complaint fully before offering a solution.
4. Offer a Solution
After understanding the problem, propose a solution. This could be a refund, replacement, or any other remedy appropriate to the issue. If you can’t resolve the complaint immediately, let the customer know you will follow up.
After the complaint has been handled, follow up with the customer to make sure they are satisfied with the resolution. This demonstrates that the store values its customers.
6. Learn and Improve
Use the complaint as a learning opportunity. If a certain issue keeps arising, consider how store policies or procedures can be changed to prevent the problem in the future.
Thrift Store Ideas for Business
You would do with some ideas, wouldn’t you? So, here are some ideas you can bring in to help your thrift store business overall:
1. Niche Selection
Identify a specific market segment to cater to. It could be vintage clothing, used books, antique furniture, or children’s toys.
Most of the time, sticking to a particular niche helps you stand out from other thrift stores and attract a dedicated customer base. So, don’t forget to pin your specific niche into your thrift store business plan.
2. Quality Control
Ensure that all items you sell are in good condition. While customers expect thrift store items to be used, they still want items that are clean, functional, and presentable.
You’d also want to implement a strict quality control process. This will help maintain customer satisfaction and your store’s reputation.
3. Online Presence
It’s the 21st century, you know. And that rings a bell – “digital age”. Now, having an online presence is synonymous with a successful business, most of the time. So, for your thrift store business plan, consider including your set up an e-commerce website where customers can browse and purchase items. Social media platforms can also help you showcase items, announce sales, and engage with customers.
4. Community Involvement
Thrift stores often have strong ties to their local communities. Consider partnering with local charities or hosting community events. You will need this to increase your store’s visibility and reputation.
5. Sustainable Practices
Promote your store’s commitment to sustainability. This could involve using recycled materials for packaging, implementing energy-efficient practices, or donating a portion of profits to environmental causes.
6. Customer Loyalty Program
Implement a customer loyalty program to encourage repeat business. This could involve a points system, where customers earn points for every purchase that can be redeemed for discounts on future purchases.
7. Regular Sales and Promotions
Hold regular sales and promotions to attract customers and move inventory. This could involve seasonal sales, flash sales, or discounts on certain categories of items.
Is the Thrift Store Industry Growing?
The thrift store industry has been witnessing considerable growth over the past decade, driven by various socio-economic factors. Increased focus on sustainability, economic downturns, and changing consumer attitudes toward used goods have all contributed to the factors.
More consumers are shifting towards thrift stores as a means to combat the detrimental effects of fast fashion. They perceive purchasing second-hand goods as a way to reduce waste and promote the circular economy.
According to ThredUp’s 2021 Resale Report, the secondhand apparel market is projected to double in value from $36 billion in 2021 to $77 billion by 2025. This expansion isn’t limited to just clothing; other segments like furniture, electronics, books, and household goods also exhibit strong growth trajectories.
Another significant factor is the economic fluctuations and downturns that have made consumers more budget-conscious. They are increasingly turning to thrift stores to find quality goods at significantly reduced prices. For instance, during the financial crisis of 2008, many thrift stores reported an increase in sales, as consumers sought to tighten their belts – Reuters report.
Lastly, the perception of buying used goods has shifted drastically. A study by First Insight found that 40% of millennials and Gen Z are open to buying second-hand items, compared to just 28% of Gen X and baby boomers. This acceptance of pre-owned goods by younger demographics is a clear signal of continued growth in the thrift store industry.
In terms of industry segmentation, clothing, and footwear continue to dominate with a 60% share, followed by furniture at 20%, electronics at 10%, and books and others at 10% – GlobalData.
|Industry Segment||Market Share|
|Clothing and Footwear||60%|
|Books and Others||10%|