Doing Business Case Studies: The Boutique Madam

Updated: Nov 27, 2020

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Sarah was able to secure a contract from her state government that gave her sufficient funds to pay off her debts and meet some of the pressing needs that she had for her children and family members.

After being able to achieve this, Sarah realized that she had over N8 million remaining. She was afraid to put the money in her savings account as she feared that the money would spend the money.

So Sarah decided to start a business.

She had always wanted to own a boutique just like so many of her friends did. She enjoyed going to their boutiques to look at the beautiful clothes and accessories that they sold.

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She had often secretly wished she could also own one of such businesses. It was very glamorous to own a boutique. It gave one a certain aura of respectability in her community once they knew that you owned a boutique. It was a thing of pride to be able to tell others that you were a businesswoman.

Sarah decided that starting up a boutique would be the ideal business. She enjoyed shopping and this would be the perfect opportunity for her to travel and shop for her boutique just like her friends did. She would also be able to shop without feeling guilty or frivolous because she was shopping to re-sell.

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When Sarah told her cousin, Michael, about her desire to set up a boutique, he advised her to drive around and look for a suitable location. He further advised her to survey the businesses and people in her target location.

He also advised her to walk around and ask some of the other shop owners about the business climate in the location. Sarah told her cousin that she did not think that would be necessary as it would be very tedious. She told him that she did not know anyone who ever did that when they wanted to start a boutique. Michael then advised Sarah to take N200,000 out of her capital and pay a consultant to conduct a feasibility study for her with regard to her business idea. Sarah gasped at the amount of money she needed to pay a consultant and told Michael that she did not think that wasting such an amount of money on a consultant was necessary.

She told him that she would set up the store and employ her younger sister to work there as the salesgirl. This would give her the freedom to pursue other business opportunities.

So Sarah went ahead and set up the business. She spent over N5 million naira on renting the space, painting part of the walls, installing wallpaper, air conditioning, shelves, hangers, lighting, various furnishings, and the cashier counter.

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She also spent hundreds of thousands of naira installing a fancy wooden design on the exterior of her store so that it would look different and exclusive.

Six months later, she realized that her sister was making some few sales but she kept coming up with excuses of why she needed to use the money from the sales. She also realized that the footfall in her chosen location was extremely poor and that she was not sure she was going to be able to make enough sales to recoup her investment.

The few customers who visited the shop kept complaining that her prices were too high and they kept haggling to get lower prices for their target purchases.

She decided to close the store and release her sister from the position while she figured out how to make her venture work. Eight months later, Sarah is yet to re-open the shop.

She had to renew the rent of the shop because she had no place to keep her inventory so she was forced to renew the rent to store the items.

This is one story. There are thousands of similar ones.

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What do you think Sarah should have done differently? Kindly post your comments below...

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