The shelves filled with bicycles, board games, or video games … There is no saying: the toy market is timeless, and it always has as much charm.
This is why we have concocted this guide for the opening of a toy store. Once you have read this article, you will know how to open a toy store, from the initial idea to the search for funding. With, in addition, some tips and useful links. So forward!
The toy market: a buoyant sector
It must be said: the sector is dynamic. Even in times of crisis, the market sees its sales increase. In 2014, the French federation of toy-childcare industries (FJP) reported, via 20 minutes, a 2% increase in sales. According to the FJP, this shows that even in difficult times, households keep a budget devoted to children’s entertainment.
This good health of the sector does not exempt you from carrying out a market study before opening your toy store. To do this, in addition to industry trends and consumer expectations, you will need to carefully analyze the state of competition in your city, and think of a way to be competitive with your competitors. For an entrepreneur who embarks on this sector, it will be necessary in particular to pay attention to the growing competition from supermarkets and e-commerce.
Open a toy store with a unique concept
Competition in the toy market is tough. To make your place you will have to differentiate yourself from your competitors. One way to do this is to set up a specialized toy store. Traders thus decide to focus exclusively on wooden toys, board games, “Made in France” toys, or “first age” toys, and collectible toy like a bobblehead.
With this type of commercial positioning, you will target a clearly more targeted clientele, and your positioning as a specialist should allow you to stand out more easily from generalist brands and supermarkets.
Another possibility to be competitive with big brands is to join a franchise. In France, names are coming back like La Grande Récré, Autour de Bébé, or King Jouet. By joining this type of network you will lose your independence but will benefit from the notoriety of the network brand, support, and prices negotiated with suppliers.
In what type of room do you open a toy store?
Once you have defined the outline of your project, you can start looking for suitable commercial premises.
Such a building is not necessarily difficult to find. You just need enough space for your store and your back room that will hold your stock. Note that this reserve will probably be greater during certain periods. With the approach of the holidays, in particular.
Besides the size, you will also have to think about the location of your room. A small shop will be more interested in being located in the city center: a small space is relatively easy to find, and you will benefit from a high level of passage to promote your shop.
For a store requiring more space, it may be necessary to consider moving to the outskirts. In any case, do not stay isolated. A shop alone always interests fewer customers than a shopping center. By getting closer to other businesses, you will increase your attractiveness.
The choice of legal status for your toy store
The opening of your toy store is approaching, but there are still crucial steps. The next will be to choose the legal status of your business.
Do not make the mistake of choosing your status lightly because it will have an impact in particular:
- On your responsibility vis-à-vis the debts of the company: in the case where you opt for the sole proprietorship (EI) for example, your goods and those of the company will be merged. Thus, in the event of bankruptcy of the company, the reimbursement will be made on your personal property
- On corporate taxation: partnerships are generally taxed on income tax and capital companies are taxed on companies
- On your social status as a manager: will you be a self-employed worker (TNS) or similar employed? And therefore, which fund will you contribute to?.
Material and human needs to create a toy store
Beyond the premises of your company, which may have to be planned for renovation and especially to fit out, your company will need equipment and personnel to operate.
When creating a toy store, one of the most important initial investments is often the acquisition of stock. You will have to go in search of suppliers to negotiate the rates, the frequency of supplies, and the terms of payment.
It will be necessary to manage your stock in a meticulous way in order to have a sufficient stock but not too important at the risk of ending up with unsold goods, and therefore of the immobilized cash for nothing. Still, at the stock level, the acquisition will be more substantial at key periods. Particularly during the holidays. But on top of that, toys are becoming more and more fashionable. You will, therefore, have to pay attention to the seasonality and obsolescence of your range.
In addition to the local stock and equipment (departments, cash registers, security gates, etc.), you will also need to plan:
- IT equipment for administrative management
- creation of a website and marketing elements (logo, illuminated sign, etc.)
- costs related to launching the business (company registration, personnel contracts, etc.)
At the staff level, you should not a priori experience any particular difficulty in hiring, the retail of toys is not subject to compulsory certification. That said, it may be interesting to recruit salespeople who have undergone specialized training in children’s products.
Also remember to anticipate the workload at the administrative level (pay, management of timetables, supply management, accounting, VAT, etc.). If necessary, get help from a chartered accountant.
Promote the opening of your toy store: the marketing plan
Your project is coming to fruition. You feel ready to open your own toy store. But don’t rush.
First, you will need to design an end-to-end marketing plan. In other words, you will have to develop a strategy to promote your brand and retain your customers.
For this, the choice of the location of your store is essential. A busy location will promote word-of-mouth and will increase your visibility.
But there are other ways to make yourself known, you can in particular:
- Distribute flyers in the mailboxes of local residents
- Communicate on the internet, via your site, social networks, or by advertising
- Communicating in the media: radio or local newspapers
- Develop promotional campaigns, offer a discount for your inauguration for example
Take the time to refine your toy store business plan
And There you go ! You have carried out all of the previous steps with the utmost care. You just have to gather all the information you have collected in the business plan of your toy store.
The business plan is a detailed, reasoned and costed presentation of your plan to open a toy store. It includes a written part and a financial forecast.
The business plan is perhaps the most important document for starting your business. It allows you to:
- To make sure that you did not leave anything to chance in the creation of the company.
- To conclude on the financial viability (or not) of the project.
- And above all, to convince your future investors.
If you are not used to writing business plans, a good solution to accomplish this task is to use online business plan software.
Using specialized software has several advantages:
- You are guided in writing by detailed instructions and examples for each part of the plan
- You can take inspiration from already written business plan models
- You easily realize your financial forecast by letting the software take care of the accounting aspects for you
- You get a professional document, formatted, and ready to send to your banker
Opening a toy store: where to find funding?
You’re ready! You will now be able to present your project to investors.
For this, you can count on three sources of funding:
- Equity: these are the sums invested in the business by the partners (you, your relatives, private investors).
- Banks: bank financing remains essential, even if it is not always easy to obtain for a business creation.
- Aid for business creation: subsidy, lightening of charges, tax credit, there are a multitude of aid for business creation, but it will be necessary to sort out to identify those to which you are eligible.
This is the end of this guide. But for you, this is just the beginning of the adventure. We wish you success in the creation of your toy store!