Shoe business part 2
Are you interested in retailing footwear? We hope that the answer to this question is yes. The whole point is that the shoe business, despite the next crisis, is now experiencing an unprecedented rise. You can read about the reasons for growth during the period of decline in our article Shoe business in detail. In the same article, we will try to supplement this topic with a story about a young guy who, having started with ordinary distribution, has reached the level of his own manufactory producing shoes.
- Beginning ;
- A sharp turn;
- Things went well;
- Money in the morning, chairs in the evening;
- Time to set new goals;
- Local specialties;
- First import experience;
- Another import experience;
- One level higher;
- Own footwear production.
Once a student of a technical university, Andrei dreamed of a social package, a personal mobile number and a laptop, eventually - and work in the capital, necessarily in a large transnational corporation. Having chosen the three largest companies in order to get a good position, he diligently studied the literature on economics, management, marketing, psychology, passed 50 interviews, mastered the wisdom of writing resumes and cover letters. And they took a bite at the masterfully written resume.
Now Andrey is preparing a business plan for his own shoe production. His company, already set up in the capital, employs five people, including two sales managers who, like Andrei himself, offer the best shoe models on store shelves.
You may be interested in reading about How to find a competent manager.
After meeting with the future employer, Andrey had only three hours to think about it. On the scales: a social package, a personal mobile number and a laptop, eventually work in the capital, or the prospect of an independent business, starting with employment in a company that has not yet been created. The thirst for knowledge and experience took over.
Three hours after the interview, the new partners were already at the meeting with the first client - at the shoe production.
Having registered as a private entrepreneur, Andrey began to work not as an engineer, as his specialty was listed in his diploma, but as a merchandiser. Together with the employer, a young and proactive sales manager, he plunged into the element of business. Retail sale of shoes was very exciting for our hero.
A newly minted firm in the regional center was ready to represent the interests of shoe factories. At first glance, the matter looked as easy as shelling pears: they found a shoe manufacturer, agreed on a consignment of goods, and then found several outlets to which this very product was offered.
The economic situation in our country can hardly be called stable, and the standard of living of most of the population is decent. Therefore, mass consumers are paying more and more attention to the purchase of domestically produced goods, since in the overwhelming majority of cases they are cheaper than imported ones. First of all, this concerns essential goods, including clothes and shoes. Accordingly, in modern realities, the opening of a small shoe factory in a provincial Russian city can become a fairly profitable business. We will talk about how to start a shoe production from scratch on our own within the framework of this material.
Stages of organization
The step-by-step instructions below will answer the question of what needs to be done to open their own shoe production:
- If a theater starts with a hanger, then almost any business starts with a visit to the nearest branch of the Federal Tax Service, where it is registered. In this case, the most acceptable is the organizational and legal form of an individual entrepreneur on the "simplified" system. The necessary documents are processed relatively simply, so we will not cover this issue in detail. It should only be noted that you need to be as careful as possible to the selection of the necessary OKVED codes.
- Finding a suitable location for a shoe shop takes a lot of effort. It must be at least 100 sq. meters, well heated and with impeccable communications. Part of it should be allocated for a warehouse of finished products and materials, and a production line should be placed directly on the remaining area. The workshop also needs to be renovated and create the most comfortable working conditions for the staff.
- Equipment for footwear production is best purchased from domestic manufacturers, and not necessarily new - used, but in good condition, will do. It is recommended to take an experienced fitter-adjuster for the purchase of equipment, who will be able to adequately assess the condition of the machines and make his own verdict regarding the expediency of their purchase.
- When it comes to recruiting footwear production, the key is to find a couple of skilled shoemakers and an experienced locksmith. No special skills are required from ordinary workers and loaders, the main requirements for them are the absence of bad habits and responsibility.
- A competent marketing policy will provide a private shoe shop with rapid profit growth and steady development. Emphasis should be placed on actively searching for distribution channels and establishing close contacts with potential wholesale buyers of products. Naturally, developing your own website is also a prerequisite for creating a presentable business image in the eyes of clients.
An aspiring entrepreneur should also take care of creating a product quality control system in order to minimize the number of rejects and protect the reputation of his business from the appearance of "dark spots" on it.
Advantages and Disadvantages
In this section of the article, we will understand what is good about this business idea and what are its negative sides. In short, let's take a look at the pros and cons of a private mini shoe factory. First, let's take a look at the positive aspects of this business:
- The level of competition in this segment of the market is still low, especially in the provincial regions.
- Fast return on startup investments, provided that you quickly establish contacts for the sale of products.
- Relatively low cost of equipment and ease of use, which minimizes additional costs for its repair, maintenance and possible replacement.
- The possibility of obtaining additional funding from the municipal authorities, since a private shoe factory is a socially significant business that can contribute to the formation of the image of the corresponding region or individual city.
- Difficulties associated with finding qualified shoe masters. This profession is not common and therefore, in order to find a good specialist, you will have to try very hard.
- There may be interruptions in the supply of quality materials and components for the manufacture of shoes. Most likely, raw materials will have to be purchased in remote regions, which is associated with additional transportation costs.
In the end
After an entrepreneur has successfully decided where to start a business, he immediately has another, no less pressing question - is it profitable to do it. Own shoe production is a small business, which in the context of the sanctions blockade and the financial crisis can easily “shoot” and become very profitable. Its profitability will largely depend on the region where it is planned to organize the sewing of shoes, and the correctly selected range of products. It is extremely important to conduct a thorough monitoring of the needs of the population and its material security in advance, as well as try to interest the largest target audience with your products.
Paperwork for an enterprise
The shoe business is created in accordance with GOST standards and is necessarily controlled by the sanitary and epidemiological station and the fire inspection. Shoes for adults are always declared, but certified at the request of the manufacturer. Children's footwear must pass the certification stage. Also subject to declaration:
- Yuft and chrome.
- Shoes with artificial leather upper.
- Felt products (with the exception of the army).
It is better to register an enterprise for production in the form of an individual entrepreneur (individual entrepreneur), since the amount of taxes is reduced and accounting is simplified. If an entrepreneur is going to open a business with up to 100 employees, he will have a simplified taxation system - 6% or 15% of the income received. A businessman also has the right to choose UTII. When registering a production, you need:
- Copy of passport.
- Registration with the tax office.
- Company charter.
- Agreed assortment of goods with Rospotrebnadzor.
- IIN certificate (individual identification number).
- The conclusion of the SES and the fire service.
- Waste disposal contract.
- Financial expense accounting plan.
When creating a shoe factory, you will have to invest in the following aspects:
- Registration of an enterprise and obtaining business permits.
- Workers' salaries.
- Purchase of equipment (sewing, side sewing and double tape machines, cutters, staplers, a press for making insoles, sewing containers).
- Purchase of accessories.
- Rent of premises.
When you open a store, money will go to other equipment, in particular, to the cash register. It is subject to sealing and registration with the tax office. You will also need racks, ottomans, mirrors (placed at foot level), showcases.
Shoe business takes about 4-5 years to pay off.
The initial financial investment in the business will amount to approximately 180 million rubles. Production is not particularly profitable - 15-20% per year.
The stereotype that domestically produced footwear is significantly inferior in design and quality to imported samples was formed in the minds of our citizens back in the Soviet years. However, due to the well-known events that led to the growth of the foreign exchange rate, the cost of foreign shoes has grown, and the gaze of even the most hardened fashionistas and fashionistas turned towards domestic manufacturers. A small private shoe factory in a small Russian town is a business that has great potential and can become quite profitable. We recommend that beginners and experienced entrepreneurs look at our business plan for the production of shoes with calculations in order to draw a conclusion for themselves about the feasibility of this undertaking in a specific region of the Russian Federation.
Start-up investments in the opening of our own shoe factory will amount to 800 thousand rubles. The amount is relatively small - it can be borrowed or from the personal savings of a businessman (if any).
The first step that an entrepreneur has to take to put his business on an official "track" is the registration of an individual entrepreneur. The example of a business plan for organizing a shoe production, which is described here, a priori implies exactly this organizational and legal form of business. As for the taxation system, the standard "simplified" tax rate of 15% of the difference between income and expenses for the reporting period will be the best choice.
So that later the inspection bodies do not have "unnecessary" questions, the entrepreneur should be as careful as possible when choosing OKVED codes. To register a shoe manufacturing business, the following codes are suitable:
- 15. 0. "Manufacture of footwear, except for sports, protective and orthopedic footwear."
- 15. 0. "Sewing footwear and various additions to footwear according to the individual order of the population."
The process of making shoes consists of several sequential stages, relatively simple technologically, but requiring attentiveness and well-developed skills from production workers:
- Making pork or calf leather blanks. The number of parts in one pair of shoes can be quite large.
- Pressing blanks into the desired shape.
- Cutting insoles and making additional elements of a pair of shoes from other materials.
- Layout of workpieces, including manual drawing of seam lines.
- Sewing the finished model and firing it in a special oven so that the shoes do not later lose their original shape.
An important point: the assortment of the model range of a private shoe factory largely depends on the professionalism of the craftsmen who work on the blanks. The more experienced the master shoemaker, the more complex models he can make.
How much to invest in opening
The costs of starting a business to open a shoe production in a provincial Russian city are shown in the following table:
There are many brands on the market that offer quality footwear for every taste. There are also a lot of groups of joint purchases and online stores with delivery to different regions of the country. However, shoe sewing is still relevant. Unique models that are made by hand according to individual measurements are a promising direction that is gradually gaining more and more customers around the world.
Shoes are a variety of goods. Therefore, before creating your own brand, it is important to determine the specialization. Women's, children's or men's? Elite leather or affordable youth? Or maybe gain fame by organizing the sewing of orthopedic shoes? You need to think about the direction at the stage of enterprise planning.
When choosing a niche, it is important to study the competition, the degree of market saturation, and create your own unique offer. You also need to understand the technology, materials, think over a plan for promoting goods. Today it is not necessary to open your own store, which will be similar to many others. In addition, it is difficult to compete with Chinese-made products.
It is best to develop a strategy that allows you to offer exclusiveness and quality, to get the first customers who will recommend products to their friends.
Where to start
Sewing shoes as a business begins with registration. The most profitable option for those who are planning to organize a small atelier for sewing footwear is to open an individual entrepreneur. To start, it is enough to find a small room or take orders at home.
When registering, you must indicate the code of future activities. According to the unified classifier, the manufacture of shoes, pads and insoles - OKVED 19. 0 “Manufacture of footwear”. However, it does not apply to orthopedic models, rollers, skates.
Opening a current account, making a seal, notary services - all this can be done after receiving the first orders.
The preparatory work ends with the choice of the company name. Serious attitude will allow you to keep not only a good reputation, but also to register your own trademark in the future.