Looking for a women's shoe store business plan? You're in the right place.
A shoe store ties up cash in boxes. How much inventory does opening day need? How many times a year must it turn over? What happens to sales when the customer's size is not on the shelf, and when does the shop start to earn a profit? A blank template won't show what a sensible answer looks like.
In this article we'll walk through a complete sample business plan for a women's shoe store in Eugene, Oregon, section by section, so you can see how stock, rent and payroll fit together before you write your own. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The executive summary: see how to put a store, its inventory and its funding on one page, so a lender can read the ask in under a minute
- The SWOT analysis: learn how to name a single location and a single wholesale partner honestly without putting a reader off
- The size-order method: find out how a store can offer a wide range without stocking every size, and what it costs per pair
- The buying calendar: plan inventory around sandals, fall boots and the holiday months so the cash is there when the invoices are due
- The inventory ratios: learn to read inventory turns, gross profit per dollar of inventory and sales per square foot, the figures a retail lender checks
- The five-year profit, cash flow and balance sheet: understand how rent, pay and inventory decisions show up in the numbers
- The downside case: have an answer ready for "what if sales are 20% short?", along with the steps the owner takes in response
If you're opening a footwear or accessories shop, read this before you write your own. The store is fictional, so take what fits your trade and change the rest.
In this plan
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Creek Green at a Glance
Creek Green is a women's shoe store that opens in 2,000 square feet in downtown Eugene, Oregon, on January 1, 2027. The shelves hold one display size of about 520 styles, with depth in core sizes on the 120 best sellers. A customer who wants a size that is not on the shelf has it delivered to the store within two days. Founder Nora Whitcomb owns 100% of the LLC.
The store needs $250,000: $110,000 of Nora's savings and a $140,000 bank term loan. Of that, $76,000 buys opening inventory, $72,000 pays for the build-out, fixtures and point of sale, $77,300 is held as a cash reserve and $24,700 covers legal work, filings, pre-opening rent and training, and the launch campaign.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $559,100 | $710,546 | $819,015 |
| Net income after start-up costs | ($50,017) | $27,963 | $27,260 |
| Closing cash | $38,875 | $61,359 | $83,870 |
Year 1 loses money after interest, depreciation and start-up costs, because the store pays a floor team and twelve months of rent while its customer list is still being built. Operating profit turns positive in May and August and in every month from September to December. Year 2 is the first profitable year, and the store stays profitable through Year 5.
If sales run 20% under plan and Nora delays hiring, trims marketing and her own pay, buys a smaller opening inventory and pays no distributions, the store still ends every year with cash in the bank.
The plan rests on one idea. A sale is lost when the right size is missing, and a full size run of every style costs more inventory than a small store can carry. Creek Green keeps one display size per style, fits from it, and orders the customer's size from its wholesale partner for pickup two days later.
Inside Creek Green
Legal name: Creek Green, LLC, an Oregon limited liability company that elects corporate tax treatment. Owner: Nora Whitcomb, 100%. Premises: 2,000 square feet of ground-floor retail space in downtown Eugene. Opening: January 1, 2027. Stage: pre-opening. The lease and vendor agreement are in draft, and the first brand accounts are open.
What the store is for
Give women in the Eugene area a wide choice of shoes that fit, without the two-hour drive up I-5 to Portland and without ordering blind online.
What the store sells
| Line | How it earns | Year 1 share of revenue |
|---|---|---|
| Pairs sold from the shelf | About 2,250 pairs at an average of $138 | 56% |
| Pairs sold through the two-day size order | About 1,200 pairs at $148 | 32% |
| Insoles, socks, shoe care and handbags | About 2,300 sales at $25 | 10% |
| Stretching, repair and resole referrals | About 450 jobs at $30 | 2% |
Targets to the end of Year 2
- Revenue of $710,546 in 2028, with a profit after tax.
- Inventory turning 2.6 times on year-end inventory, up from 2.3.
- More than a third of pairs sold through the size order.
- The bank's interest-only period ending in January 2028 with the loan serviced on schedule.
Taxes and registrations
Oregon has no general sales tax, so the price on the tag is the price at the register and the store has no sales tax to collect or remit. The store registers the LLC with the Oregon Secretary of State, opens employer accounts for payroll tax and Paid Leave Oregon contributions, and confirms any City of Eugene registration before opening. It carries workers' compensation for every employee.
Eugene's Footwear Market
A university town with Portland as the usual alternative
The Census Bureau counted 176,654 people in the city of Eugene in the 2020 census and estimated 178,618 on July 1, 2025. Women are 51.2% of the population, which on the 2025 estimate is roughly 91,000 people (the plan's own arithmetic). The University of Oregon sits inside the city, and the plan expects Eugene's wet fall and winter to keep boots and rain-ready shoes selling into the new year. The sales curve follows that expectation: sandals lift May, and September to November together bring 34% of Year 1 revenue.
Where the margin should sit
Footwear owners often price near double cost, which is a 50% initial margin before markdowns. The plan treats that as a rough benchmark with no source behind it. Creek Green's blended gross margin is 52.2%, helped by accessories and direct reorder terms. After markdowns, shrinkage, card fees and inbound freight, about 42 cents of each sales dollar remains. Rent is 7.9% of Year 1 revenue and 5.7% by Year 3.
What shoe-store staff are paid
The Bureau of Labor Statistics reported a median of $17.03 an hour for retail salespersons in May 2025 and projected little employment change from 2025 to 2035. Oregon's standard minimum wage is $15.55 from July 1, 2026, and Lane County is in the standard region. The store's hourly staff are paid between $16.43 and $17.31 an hour at launch, within a few percent of the median.
Where else a customer could buy
| Alternative | What it offers | Why a customer might choose it | How Creek Green differs by design |
|---|---|---|---|
| Portland specialty shoe stores | Wide selection at established independents | Depth of range, and a day trip | A comparable choice in Eugene, with a two-day delivery for the size not on the shelf |
| Regional mall and department stores | Mainstream brands, promotions | Convenience and sales events | Fit help and a narrower, more considered range |
| Running and outdoor stores | Athletic and trail footwear | Gait advice for runners | Dress, comfort, boots and sandals for everyday and work wear |
| Online footwear retailers | Very large range, free shipping offers | Price and choice | In-person fitting and an exchange that takes minutes |
| Local comfort-shoe and shoe-repair shops | Orthopedic and repair work | Specific needs | A broader, more current fashion range |
The table sets out what each alternative offers and where the store positions itself. It is not a ranking, and no prices are quoted because each retailer publishes its own.
What helps and what hurts
| Strengths | Weaknesses |
|---|---|
| A buyer with eleven years in women's footwear | One location, one lease, no brand yet |
| Range depth without a full size run in inventory | A wholesale partner that carries the size order |
| Low inventory per style, so fewer markdowns | Year 1 loses money and draws on the reserve |
| Opportunities | Threats |
|---|---|
| Women who now drive to Portland or order online | Online retailers with free shipping and returns |
| University staff, parents and visitors | A wet or weak fall that delays the boot season |
| Add-on repair and care services | A rival copying the display-size model |
Who Buys Shoes Here
Four kinds of customer
The plan expects Year 1 pairs to split roughly as follows. These are the plan's own figures; no survey sits behind them.
| Customer | What she needs | Share of Year 1 pairs |
|---|---|---|
| On her feet all day | Teachers, health workers, restaurant and retail staff who want comfort that looks like a shoe | 35% |
| Seasonal and fashion buyer | Boots in October, sandals in May, a new pair for the season | 30% |
| University community | Faculty, staff, graduate students and visiting parents | 20% |
| Occasion buyer | Weddings, graduations and interviews, usually with a deadline | 15% |
How she shops now
In the plan's picture, she tries a few local stores, finds a thin range in her size, then drives to Portland or orders two sizes online and sends one back.
What makes her switch
A missing size that can be in the store by Thursday. A fit specialist who measures both feet. A return she can make across town without printing a label.
What she expects
An honest fit, a fair price on the tag and a clear promise on the delivery date. The store texts when a pair arrives and holds it for seven days.
The pairs behind the revenue
At 1.2 pairs per customer, 3,450 pairs means about 2,900 customers in Year 1, 3,500 in Year 2 and 4,000 in Year 3. Year 1 revenue per customer is $194. About 40% of each later year's customers return from the year before.
Selling a Shoe Without a Full Size Run
The display-size method
Most styles stand on the wall in one size, usually a 7.5 or an 8. The 120 best sellers are held in core sizes 6 to 10, about five pairs each. When a customer tries a style, the associate fits her from the display pair, then checks the stockroom. If her size is not there, the wholesale partner's portal shows whether it can ship, and she pays when she orders.
From fitting to pickup
- She browses and tries on the display pair with a specialist.
- The specialist measures both feet and confirms size and width.
- If the pair is in the stockroom, she buys it on the spot.
- If not, she orders it at full price and is told the delivery date.
- A text arrives when the pair does. The store holds it for seven days.
- A follow-up message a week later asks how it fits.
About 36% of Year 1 pairs go through step 4, rising to 38% by Year 5.
How prices are set
Shelf prices run from about $85 for flats and sandals to $260 for premium boots. Ordered pairs average $148 because they lean toward boots and comfort brands. The store marks down on a fixed ladder after 90 and 150 days, and the plan budgets 5% of sales for markdowns beyond the planned margin. Returns of unworn pairs inside 30 days are accepted, and the allowance sits inside the 1% shrinkage and damaged-returns line.
Repeat business
The cobbler referral line is small at $13,500 in Year 1, but it gives customers a reason to come back between purchases, and the follow-up text after each order builds the contact list the store markets to.
Spending to Be Found
What the Year 1 budget buys
The Year 1 budget is $33,000: $11,000 of launch spend from start-up capital and $22,000 of running costs. That is 5.9% of Year 1 revenue. Running cost alone is 3.9% of Year 1 revenue and falls to 3.1% by Year 3 as repeat buying takes over. Spread over about 2,900 Year 1 customers, the cost is about $11 each.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website, brand and photography (launch) | $6,000 | A site with live size-order status and a booking link for fittings |
| Opening week and fit events (launch) | $3,000 | A week of fittings and local brand reps; about 300 first visits |
| Launch partnerships (launch) | $2,000 | Studio and university welcome-week tie-ins |
| Local search and Google Business Profile | $6,500 | "Women's shoe store Eugene"; about 600 customers |
| Instagram and Meta ads | $4,500 | New-arrival posts and boot-season campaigns; about 450 customers |
| Email and text list | $2,000 | Size-arrival texts and season notes; supports repeat sales |
| Community events and Saturday market stall | $2,500 | A table of display pairs; about 300 customers |
| Employer and wedding-venue partnerships | $2,500 | Staff offers and bridal party fittings; about 350 customers |
| Loyalty card and referral thank-yous | $2,000 | A stamp card and a referral credit; about 400 referral customers |
| University move-in mailer | $2,000 | Print and postage in late August |
Foot traffic from downtown adds about 500 customers with no direct cost, which brings the Year 1 total to 2,900.
Marketing milestones
- January 2027: store open, list of 400 sign-ups from the opening week.
- May 2027: first sandal season, with size-arrival texts running on every order.
- October 2027: peak month at $65,255, boots tested against the buying plan.
- December 2027: about 2,900 customers served in the year.
Running the Store Day to Day
The downtown unit
2,000 square feet at about $22 a square foot a year, all in, which is $44,000 in Year 1. The lease runs five years with a personal guarantee and a renewal option. Rent rises 3% a year in the plan and the store stays in the same unit. The front 1,400 square feet is sales floor with a fitting area; the rear holds the stockroom and a small workspace for receiving.
Hours and floor cover
Open Monday to Saturday, 10 a.m. to 6 p.m., 305 selling days a year. Two to three people are on the floor most of the day. Saturdays and the first two weeks of the fall boot season carry the heaviest cover, with the weekend associate added and, from September to December, the seasonal associate.
Buying calendar
- Opening assortment: ordered in November and December 2026 once the loan commitment is signed, delivered before January 1.
- Spring and summer sandals and flats: ordered in October and November, delivered February to March.
- Fall boots and booties: ordered in March and April, delivered in August.
- Holiday dress and occasion: ordered in July, delivered October.
- Core replenishment: weekly, from the wholesale partner.
Nora buys at two trade shows a year. Inventory opens at $76,000 and ends Year 1 at $118,746 as the fall buy lands.
The wholesale partner
The size order depends on one distributor that agrees in writing to ship a customer's size within two days across the core of its range. A second distributor and brand reorder programs cover about a quarter of the range. If the partner slips, the store loses a size order. That is the main operating risk, and it is why the plan holds the ordered share near 35% of pairs.
Software and data
A point-of-sale system with size-level inventory, the distributor's ordering portal, a text-messaging tool and cloud accounting. Software costs $4,200 in Year 1 and $5,200 by Year 5.
Insurance, safeguards and compliance
- General liability, contents and business interruption cover, budgeted at $7,000 in Year 1 with key-person life and disability cover.
- Workers' compensation for every employee.
- Payroll accounts and Paid Leave Oregon contributions set up before the first payroll.
- Card data handled through a payment terminal that does not store card numbers.
- A written return policy posted at the register.
Nora Whitcomb and the Floor Team
Nora Whitcomb, owner and buyer
Nora has eleven years in women's footwear retail in Portland. She started as a sales associate at an independent shoe store, became its buyer in her fourth year and its store manager in her eighth, keeping the buying role. She holds a bachelor's degree in business. Her $110,000 investment is savings built over those years.
Where the team is thin
Nora has not signed a lease or a bank guarantee before, has not run a profit and loss in her own name and does not yet know Eugene's customers as well as Portland's. The plan answers these with a lawyer's review of the lease, a part-time bookkeeper and a quarterly review of the cash forecast with an outside accountant, and a first-year program of local partnerships to learn the customer.
The floor team
The lead fit specialist joins at launch and is trained to fit and to run the size-order process. A part-time sales associate covers weekdays and a weekend associate covers Saturdays. A seasonal associate works September to December each year. A full-time associate joins in month 30, as busy-season days run past 15 pairs, and a part-time clerk in month 52 takes receiving and online orders off the floor.
If Nora is away
Nora is the only buyer. The lead fit specialist can run the floor and the size orders for two weeks a quarter, and the distributor agreement names a second contact. The store carries key-person life and disability cover on Nora.
Outside help
An accountant who reviews Year 1 numbers each quarter and files the store's tax returns. A retail lawyer on call for the lease and vendor terms. Oregon's Small Business Development Center network for pricing and marketing questions.
Ownership and the bank
Nora owns 100% of Creek Green, LLC and gives the bank a personal guarantee. The loan carries a covenant to deliver quarterly accounts and a monthly inventory report. The bank takes a lien on the inventory and fixtures, which would fetch well below cost in a forced sale, so the personal guarantee is part of the loan terms. The LLC elects corporate tax treatment and the plan charges corporate rates throughout as a cautious placeholder; Nora's accountant advises on whether a pass-through election suits her better. Nora has reviewed her employment agreement with a lawyer and is not bound by a non-compete.
Financial Plan: Inventory, Size Orders and the Fall Boot Buy
The numbers below answer three questions a lender will ask of a shoe store: how the $250,000 gets raised and spent, what the store sells and at what margin, and how much cash is left when the inventory is paid for. The funding comes first, then the store figures, the sales forecast, payroll, profit and loss, cash, the balance sheet and a downside case. Year 1 runs month by month and later years run annually.
Opening inventory, the build-out and the bank loan
| Use of funds | Amount |
|---|---|
| Opening inventory: one display size of about 520 styles, plus depth in core sizes of the 120 best-selling styles | $76,000 |
| Build-out (about $22 a square foot): flooring, lighting, shoe walls, fitting nook | $44,000 |
| Fixtures: wall shelving, seating, mirrors, counter, stockroom racking | $20,000 |
| Point of sale, size-order software set-up, tablet, signage | $8,000 |
| Business registration, city and county filings, signage permit | $1,200 |
| Legal: LLC, lease review, distributor agreements | $4,000 |
| Pre-opening rent and staff training | $8,500 |
| Launch: website, photography, opening week, local partnerships | $11,000 |
| Cash reserve for the slow first winter and the fall boot buy | $77,300 |
| Total uses | $250,000 |
| Source of funds | Amount |
|---|---|
| Nora Whitcomb's savings | $110,000 |
| Bank term loan | $140,000 |
| Total sources | $250,000 |
Nora Whitcomb puts in $110,000 of her own savings, 44% of the $250,000 raised. A bank lends the other $140,000 over ten years at 10.75%, interest-only for the first twelve months, secured on the inventory and fixtures with her personal guarantee. The rate is a planning figure rather than a quote. Opening inventory takes $76,000, 30% of the money raised, and the build-out and fixtures another $72,000. The $77,300 reserve is the next largest use. It carries the store through a loss-making first winter and pays for the roughly $43,000 of extra inventory the shelves need by December, which the opening buy does not cover.
Store figures behind the forecast
- The store sells 3,450 pairs in Year 1, about 11.3 a day over 305 selling days (Monday to Saturday). Of those, 2,250 come off the shelf at an average of $138 and 1,200 go through the two-day size order at $148. Orders carry the higher price because they skew toward boots and comfort brands that are not stocked in depth. Prices rise 3% a year from Year 2. Pairs reach 4,750 in Year 3 (15.6 a day) and 5,020 in Year 5.
- A customer buys 1.2 pairs on average, so Year 1 serves about 2,900 customers and Year 3 about 4,000. Year 1 revenue per customer is $194 with accessories included. In later years about 40% of each year's customers return from the year before.
- Insoles, socks, shoe care and handbags add 2,300 sales at $25 in Year 1. Stretching, repair and resole referrals add 450 jobs at $30; a local cobbler does the work and keeps 60% of the fee.
- Cost of goods runs at 48% of price for shelf pairs, 49% for ordered pairs, 40% for accessories and 60% for the cobbler referrals, which blends to a 52.2% gross margin in every year. Footwear owners often price near double cost; the plan treats that as a rough benchmark with no source behind it. Below gross profit the model charges markdowns and clearance at 5% of sales on top of the planned margin, shrinkage and damaged returns at 1%, card fees at 2.6% and inbound freight on ordered pairs at $6.50 a pair. That leaves about 42 cents of each sales dollar before payroll and rent.
- Inventory is carried at cost. It opens at $76,000 and grows by 16% of each year's cost of goods sold, to $118,746 at the end of Year 1 and $146,434 at the end of Year 5. Brands and distributors give 30 days to pay, which leaves $21,959 owed at the end of Year 1. Receivables are two days of sales, almost all of it card settlements.
- The store takes 2,000 square feet in downtown Eugene at about $22 a square foot a year all in, which is $44,000. That rent is a planning figure; asking rents differ by building and the lease is negotiated before the loan closes. The build-out is $22 a square foot, and fixtures, point of sale and signage bring the total to $72,000, about $36 a square foot, with no landlord allowance. Utilities are $5,300. Insurance of $7,000 covers liability, contents, business interruption and key-person life and disability cover on Nora.
- Payroll adds 27% to wages for payroll taxes, workers' compensation and health cover (15% for part-time staff). Oregon's standard minimum wage is $15.55 an hour from July 1, 2026, and Lane County sits in the standard region. The Bureau of Labor Statistics national median for retail salespersons was $17.03 an hour in May 2025. The lead fit specialist's $25,200 works out to $17.31 an hour over 28 hours a week, the full-time associate's $35,000 to $16.83, and the part-time associate's $20,500 to about $16.43 over 24 hours. Oregon resets its wage floor each July, so the owner checks it every year. Wages in the personnel table are launch rates, and 3% annual pay raises are charged as a separate line from Year 2.
- Year 1 marketing is $33,000, of which $11,000 is launch spend from the start-up capital and $22,000 is running cost. That is about $11 per customer and 5.9% of revenue. Running cost alone is 3.9% of Year 1 revenue and 3.1% by Year 3, as repeat buying takes over from paid reach. Professional fees of $12,000 cover a part-time bookkeeper at about $650 a month and an accountant for quarterly reviews and the yearly returns.
- The LLC elects corporate tax treatment, so the model charges the 21% federal rate plus Oregon's 6.6% rate on the first $1,000,000 of Oregon taxable income. Oregon has no general sales tax, so ticket prices are final and the store collects and remits none. Oregon's Corporate Activity Tax requires registration once commercial activity reaches $750,000, which Year 3 revenue of $819,015 passes, and it taxes only activity above $1,000,000. Plan revenue peaks at $921,240 in Year 5, so no tax falls due, but thresholds change and the store's accountant checks them every year.
- Owner distributions of $10,000 in Year 4 and $15,000 in Year 5 come out of accumulated cash and total $25,000 against $39,340 of profit in those two years. The loan runs its full term rather than being repaid early, so the cash cushion stays in the store.
Revenue by way of selling
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Pairs sold from the shelf | $310,500 | $390,885 | $446,533 | $475,008 | $497,025 |
| Pairs sold through the two-day size order | $177,600 | $228,660 | $266,922 | $287,868 | $303,167 |
| Insoles, socks, shoe care and handbags | $57,500 | $73,388 | $84,872 | $91,516 | $97,075 |
| Stretching, repair and resole referrals | $13,500 | $17,613 | $20,688 | $22,619 | $23,973 |
| Total revenue | $559,100 | $710,546 | $819,015 | $877,011 | $921,240 |
| Growth on prior year | – | 27% | 15% | 7% | 5% |
Shelf pairs are 56% of Year 1 revenue and the size order is 32%. Ordered pairs are 35% of pairs sold in Year 1 and 36% by Year 5, and each costs $6.50 to bring in. That share matters because every ordered pair is a sale a missing size would otherwise have lost, and because it ties a third of revenue to one distributor. Accessories add 10% of revenue and the cobbler line 2%, but the cobbler line gives customers a reason to return between purchases.
The first twelve months of selling
| Month | Pairs sold from the shelf | Pairs sold through the two-day size order | Insoles, socks, shoe care and handbags | Stretching, repair and resole referrals | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $9,522 | $5,476 | $1,925 | $510 | $17,433 | ($15,186) |
| Feb 2027 | $12,834 | $7,400 | $2,375 | $660 | $23,269 | ($12,138) |
| Mar 2027 | $21,666 | $11,544 | $3,500 | $960 | $37,670 | ($4,619) |
| Apr 2027 | $25,530 | $12,876 | $3,925 | $990 | $43,321 | ($1,668) |
| May 2027 | $30,498 | $13,024 | $4,500 | $990 | $49,012 | $1,303 |
| Jun 2027 | $28,014 | $12,432 | $4,325 | $960 | $45,731 | ($410) |
| Jul 2027 | $24,150 | $10,952 | $4,175 | $930 | $40,207 | ($3,294) |
| Aug 2027 | $28,290 | $15,096 | $4,925 | $1,080 | $49,391 | $1,501 |
| Sep 2027 | $32,844 | $22,644 | $5,750 | $1,440 | $62,678 | $8,439 |
| Oct 2027 | $32,844 | $24,716 | $6,075 | $1,620 | $65,255 | $9,785 |
| Nov 2027 | $29,394 | $21,756 | $7,050 | $1,680 | $59,880 | $6,978 |
| Dec 2027 | $34,914 | $19,684 | $8,975 | $1,680 | $65,253 | $9,784 |
Revenue opens at $17,433 in January, climbs through the spring sandal months to $49,012 in May, dips to $40,207 in July and peaks at $65,255 in October as boots and the start of the university term arrive. September to November bring 34% of the year. EBITDA is positive in May, August and each month from September to December, and negative in the other six. The lowest month-end cash balance is Aug, at about $29,000. The monthly view does not time inventory purchases, so the real low point just before the fall boot buy would sit below that figure; the reserve is sized with it in mind.
Who is on the floor
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Owner, buyer and store manager | $44,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Lead fit specialist (part time, about 28 hours a week) | $25,200 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Sales associate (part time, about 24 hours a week) | $20,500 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Weekend associate (part time) | $12,500 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Back-to-school and holiday associate (part time, September and November to December) | $20,000 | Month 9 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Full-time sales associate | $35,000 | Month 30 | – | – | 1 | 1 | 1 |
| Stock and online-order clerk (part time) | $19,000 | Month 52 | – | – | – | – | 0.5 |
| Total payroll incl. on-costs | $130,477 | $130,477 | $156,406 | $174,927 | $191,314 |
Nora, a part-time lead fit specialist, a part-time sales associate and a weekend associate open the store, which is about 112 paid hours a week on the floor and in the stockroom and roughly $96 of Year 1 revenue per hour. A seasonal associate works September to December each year. A full-time associate joins in month 30, as busy-season days run past 15 pairs, and a part-time inventory and online-order clerk joins in month 52 to take receiving off the floor. Part-time and seasonal roles are shown at annual-equivalent pay. Nora's $44,000 is already in the costs, so every profit line is what remains after she is paid. That pay sits below what a manager of a store this size would earn elsewhere, and it is one reason Year 1 breaks even at EBITDA.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $559,100 | $710,546 | $819,015 | $877,011 | $921,240 |
| Cost of goods sold (shoes and accessories at cost, cobbler share) | ($267,164) | ($339,532) | ($391,363) | ($419,077) | ($440,211) |
| Gross profit | $291,936 | $371,014 | $427,652 | $457,934 | $481,029 |
| Payroll incl. on-costs | ($130,477) | ($130,477) | ($156,406) | ($174,927) | ($191,314) |
| Rent | ($44,000) | ($45,300) | ($46,700) | ($48,100) | ($49,500) |
| Utilities | ($5,300) | ($5,500) | ($5,700) | ($5,900) | ($6,100) |
| Marketing | ($22,000) | ($22,500) | ($25,000) | ($26,000) | ($27,000) |
| Insurance | ($7,000) | ($7,400) | ($7,800) | ($8,200) | ($8,600) |
| Professional fees | ($12,000) | ($12,500) | ($13,000) | ($13,500) | ($14,000) |
| Software subscriptions | ($4,200) | ($4,500) | ($4,800) | ($5,000) | ($5,200) |
| Card processing fees (2.6% of sales) | ($14,537) | ($18,474) | ($21,294) | ($22,802) | ($23,952) |
| Markdowns and clearance beyond planned margin (5% of sales) | ($27,955) | ($35,527) | ($40,951) | ($43,851) | ($46,062) |
| Shrinkage and damaged returns (1% of sales) | ($5,591) | ($7,105) | ($8,190) | ($8,770) | ($9,212) |
| Inbound freight on two-day orders ($6.50 a pair) | ($7,800) | ($10,043) | ($11,723) | ($12,643) | ($13,315) |
| Bags, tissue, boxes and store supplies | ($3,200) | ($3,700) | ($4,100) | ($4,300) | ($4,400) |
| Cleaning, alarm monitoring and repairs | ($3,000) | ($3,100) | ($3,200) | ($3,300) | ($3,400) |
| Buying trips and trade-show travel | ($3,500) | ($3,800) | ($4,100) | ($4,300) | ($4,500) |
| Licenses and state filings | ($900) | ($950) | ($1,000) | ($1,050) | ($1,100) |
| Fixture refresh and equipment replacement | $0 | ($2,000) | ($3,000) | ($7,000) | ($3,500) |
| Annual pay raises (3% a year) | $0 | ($3,914) | ($9,525) | ($16,220) | ($24,012) |
| EBITDA | $476 | $54,224 | $61,163 | $52,072 | $45,861 |
| Depreciation | ($10,743) | ($10,743) | ($10,743) | ($10,743) | ($10,743) |
| Interest | ($15,050) | ($14,578) | ($13,476) | ($12,248) | ($10,883) |
| Income tax | $0 | ($940) | ($9,685) | ($7,623) | ($6,353) |
| Net income before start-up costs | ($25,317) | $27,963 | $27,260 | $21,457 | $17,883 |
| Start-up costs expensed at opening (legal, filings, pre-opening rent and training, launch marketing) | ($24,700) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($50,017) | $27,963 | $27,260 | $21,457 | $17,883 |
Year 1 loses $25,317 before start-up costs and $50,017 after them, even though EBITDA is $476. Year 2 is the first profitable year at $27,963. Year 3 holds at $27,260, because the full-time associate starts in month 30. Net income then eases to $21,457 in Year 4 and $17,883 in Year 5 as pay raises ($24,012 a year by Year 5), a $7,000 fixture refresh and the clerk arrive, while 3% price rises only keep pace with them. EBITDA margin is 7.6% in Year 2, 7.5% in Year 3, 5.9% in Year 4 and 5.0% in Year 5, a thin return that leaves little room for a bad buy. Income tax is $940 in Year 2, because most of the Year 1 loss carries forward, and $9,685 in Year 3.
Cash and inventory movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($139,125) | $32,245 | $33,375 | $29,726 | $26,739 |
| Build-out and fixtures | ($72,000) | $0 | $0 | $0 | $0 |
| Funding received | $250,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($9,762) | ($10,864) | ($12,091) | ($13,457) |
| Owner distributions | $0 | $0 | $0 | ($10,000) | ($15,000) |
| Net change in cash | $38,875 | $22,484 | $22,511 | $7,635 | ($1,718) |
| Closing cash | $38,875 | $61,359 | $83,870 | $91,504 | $89,786 |
Cash from operations is negative $139,125 in Year 1. Most of that is the $118,746 of inventory on the shelves at year end less the $21,959 owed to brands, plus the operating loss and the start-up costs expensed at opening. Closing cash is $38,875 at the end of Year 1 and peaks at $91,504 in Year 4. The loan falls from $140,000 to $93,826 by Year 5. Distributions begin in Year 4.
Balance sheet with inventory on hand
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $38,875 | $61,359 | $83,870 | $91,504 | $89,786 |
| Accounts receivable | $3,064 | $3,893 | $4,488 | $4,806 | $5,048 |
| Inventory at cost | $118,746 | $130,325 | $138,618 | $143,052 | $146,434 |
| Build-out and fixtures (net) | $61,257 | $50,514 | $39,771 | $29,029 | $18,286 |
| Total assets | $221,942 | $246,092 | $266,747 | $268,391 | $259,554 |
| Owed to brands and distributors | $21,959 | $27,907 | $32,167 | $34,445 | $36,182 |
| Bank term loan | $140,000 | $130,238 | $119,374 | $107,283 | $93,826 |
| Paid-in capital | $110,000 | $110,000 | $110,000 | $110,000 | $110,000 |
| Retained earnings | ($50,017) | ($22,054) | $5,206 | $16,663 | $19,546 |
| Total liabilities and equity | $221,942 | $246,092 | $266,747 | $268,391 | $259,554 |
Inventory turns, margins and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | 0.1% | 7.6% | 7.5% | 5.9% | 5.0% |
| Net margin (before start-up costs) | -4.5% | 3.9% | 3.3% | 2.4% | 1.9% |
| Payroll incl. pay raises as share of revenue | 23% | 19% | 20% | 22% | 23% |
| Revenue per full-time equivalent at year end | $186,367 | $236,849 | $204,754 | $219,253 | $204,720 |
| Average monthly revenue | $46,592 | $59,212 | $68,251 | $73,084 | $76,770 |
| Monthly revenue needed to cover operating costs | $46,516 | $50,558 | $58,490 | $64,774 | $69,451 |
| Debt service cover (EBITDA / interest + principal) | 0.0x | 2.2x | 2.5x | 2.1x | 1.9x |
Year 1 averages $46,592 of revenue a month against $46,516 needed to cover operating costs, so the store just clears break-even at the EBITDA line while still losing money after interest, depreciation and start-up costs. Year 2 averages $59,212 against $50,558, and Year 3 $68,251 against $58,490. Inventory turns, measured as cost of goods sold over year-end inventory, are 2.3 in Year 1, 2.8 in Year 3 and 3.0 in Year 5; each dollar of inventory earns $2.46 of gross profit in Year 1 and $3.28 in Year 5. Sales per square foot are $280, $410 and $461 in Years 1, 3 and 5. Debt service cover is 0.0x in Year 1 because the loan is interest-only and EBITDA is close to zero, then 2.2x in Year 2, 2.5x in Year 3 and 1.9x in Year 5. Payroll with pay raises is 23% of revenue in Year 1, 20% in Year 3 and 23% in Year 5.
A slow town: sales 20% under plan
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $447,280 | $568,437 | $655,212 | $701,609 | $736,992 |
| Net income before start-up costs | ($45,762) | ($1,533) | $23,151 | ($8,255) | ($946) |
| Net income after start-up costs | ($70,462) | ($1,533) | $23,151 | ($8,255) | ($946) |
| Closing cash | $38,400 | $32,679 | $52,008 | $40,425 | $35,255 |
This case cuts every revenue line by 20% in every year. The response: every hire from month 13 starts six months later (the full-time associate in month 36), the inventory and online-order clerk is never hired, part-time hours fall by 15%, the opening inventory buy is 20% smaller with the money kept in the reserve, the fixture refresh is skipped, marketing is cut by 20%, Nora takes a 20% pay cut, card fees, markdowns, shrinkage and freight move with sales, and no distributions are paid. On those terms year-end cash never falls below $32,679, and the low comes in Year 2. The store loses $70,462 in Year 1 after start-up costs and $1,533 in Year 2, earns $23,151 in Year 3, then slips to losses of $8,255 in Year 4 and $946 in Year 5, because pay raises keep accumulating on a smaller sales base. Equity ends Year 1 at $39,538. Principal payments begin in Year 2 against almost no operating profit, so Nora would ask the bank to extend the interest-only period before that date. A shortfall that lasted past Year 3 would also call for a cheaper lease or a smaller floor. The model has no monthly view after Year 1, so the pre-fall low in later years could sit below the year-end figure.
Sources
- Census Bureau, QuickFacts: Eugene city, Oregon (2020 census count and July 1, 2025 population estimate, share of women).
- Bureau of Labor Statistics, Retail sales workers, Occupational Outlook Handbook (retail salesperson median wage, May 2025; employment projection 2025 to 2035).
- Oregon Bureau of Labor and Industries, Minimum wage (standard rate of $15.55 from July 1, 2026; Lane County in the standard region).
- Oregon Department of Revenue, Sales tax in Oregon (Oregon has no general sales tax).
- Oregon Secretary of State, Blue Book: Government finance and taxes (corporate excise tax of 6.6% on the first $1,000,000 of Oregon taxable income).
- Oregon Department of Revenue, Corporate Activity Tax (registration at $750,000 of Oregon commercial activity; tax of $250 plus 0.57% on taxable activity above $1,000,000).
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