Motivation of employees
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If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
Longer Sales Process
A shoe brand can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.
Low margins
The gross margins for your shoe brand are typically around 46%, which can make it more challenging to incur new expenses and maintain profitability.
Taxes
As a shoe brand, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
Niche Market
A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.
High overhead expenses
With starting a shoe brand, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.
You may need to charge sales tax
If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article
Churn
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In this business, customers can cancel their membership or subscription for your services - which can make revenue forecasting challenging and unpredictable. It's important to focus on your churn rates and trends so that you can prevent this as much as possible.
Time commitment
With starting a shoe brand, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.
Difficult to build trust with your customer
With starting a shoe brand, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.
Impatient customers
You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.
Be prepared to get out of your comfort zone!
Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!
Learning Curve
When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.
Equipment Breakdowns
Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.
More challenging to earn passive income
It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.
Are you interested in learning more about Shoe Manufacturers For Small Businesses? Contact us today to secure an expert consultation!