? for all of you that have retail stores

[Lorrie]

I have been thinking alot about this lately and I was wondering. How much was your start up cost?

I realize that it will be alittle different in each area but I just want to get an idea. I want to be able to figure all this stuff out so that I know before I take the jump into something that I am not sure about.

And is there anything that you forgot about until after you took the jump?

Also what would you consider to be reasonable for rent? I found a place that I could rent for $295 a month and it got me thinking about where I want to go with my business. I realize this is a big deal and not to forget about all the over head. But if any of you have any words of wisdom I would appreciate it.

[mountainmadness]

I am in the same boat Lorrie. I have been saving my earnings over the past year. I will not open a store-front until I have one year's worth of expenses up front. Expenses being- rent, utilities, costs for my supplies, displays and shelving, etc. I am planning on having $20K in the bank before taking the plunge. My job ends in 18 months and I will be at that point then.

I know that it will be a stressful time anyway and do not want to add to it by going into debt and trying to purchase supplies, pay rent, etc. relying only on my husbands income....

A lot to think about and consider.

I think that $295 is incredible. It would of course depend on the traffic flow and if it were in a good retail spot.....

[ebcandles]

My start up costs for the retail portion was 10,000 and Im still paying it off 11 months later although I no longer own the shop.

Plan, plan, plan. Dont forgot all the smaller necessities. Signs, cash register, displays etc. The cost of signage alone were 1,500.00

295.00 sounds pretty darn reasonable. How many square footage? I had 500 feet for 500.00 a month and that did not include heat and electricity.

Make sure the owners are willing to take care of the building should you have any issues with the place. We had a gas leak on our grand opening weekend and it took an entire week for the owner to make the repairs in the middle of winter!

[Lorrie]

Thanks Carmen. I actually pm'd you on this topic!

[sockmonkey]

$295 per month is ridiculously CHEAP! Here is a list of things to consider expense wise when doing your planning.

Insurance

Advertising (newspapers, church bulletins, billboards, mailers, etc.)

Credit card processing

Bank charges for your checking account

Signage (will you have a hanging sign, or one attached to the building, or one in the ground? will you have any signage/clings on windows? Dont forget the open/closed sign, as well as one that posts your hours. (Professional signage can vary wildly in price; get multiple estimates)

Deposits for all utilities

Utilities

Cash register + tapes

Packakging--bags, tissue, boxes, etc.

Trash disposal

Any business association fees for groups you might want to join

Taxes

Business cards

Office supplies (scissors, tacks, tape, paper clips, staples, stapler, pens)

Tools (hammer, screwdrivers, pliers, wrench, wire cutters)

Mop/Vacuum & cleaning supplies

[Lorrie]

Ok I guess I should add this the lease is for one year. I don't want to drop a huge amount of money into a store front that I haven't even seen yet. I want to make sure that I am looking at this in the right state of mind. I don't want to take all the money that I have and drop on this and then find out I need more money to make it a go.

I know that rent is cheap and half of the stuff on this list. I all ready have it covered.

Insurance, got it and would have to get renter insurance.

Signage No problem. That is what my Father in law does. He owns a sign shop:D

Advertising. Well My husbands cousin works for the paper. In the advertising departmen!

I don't have any fees for my bank account other than checks.

Have all the office supplies, tools, business cards.

I have the deposit and at least half the year for rent. Other amount I would hang on to for supplies.

Things I have to research. Store displays and fixtures.

(I don't even have a clue on where to look) If any one can suggested nice website for me to check out please do.

How much the utlities are. Trash disposal, sewer, heat, water.

And the main thing I need to go throught the store to see if there is any problems with it.

[ebcandles]

If you have an Ikea in your area, they have great shelves that you can use as displays that are very affordable.

[sockmonkey]

You will probably be astonished to find out how much displays, counters, and props cost. My advice is to get as much used stuff as you can. Check the papers for auctions when giftshops or furniture stores go out of business. Be creative--you can do a lot with some pieces of furniture from the Goodwill or other thrift stores. I got lucky and got a display case from a "salvage" yard. This case was like new and only cost $100. New, it would have been a minimum of $500!

What all do you plan to sell in your store besides candles or bath products? I will try and look up some suppliers for diplays and post them shortly.

[Georgia]

http://www.gershelbros.com/index.html

Check out this place for fixtures and displays.

Other than that, I have no words of wisdom for opening a store. Good luck!

[Tallbabydoll]

One thing that I think is important to consider when choosing your retail location is the amount of parking, and the ease of getting in and out of your location. I know there are stores in my area that I avoid going to because it's a PITA to get back into traffic afterwards, or a PITA to get through traffic to get there in the first place. Also there's the bakery that I just love, but rarely go because there's only a couple of parking spots, which are always taken. I'd have to park 2-3 blocks away.

Something you could do to help with the expense is rent out a small portion of space to someone else with their own related product. Something different from what you makes, but is appealing to the same consumers. Like maybe hand made jewelry, pottery, or art. Charge them a certain amount per month to have their stuff in your store, and it'd help cover your operating expenses. If I ever get to the point of having a store, this is what I intend to do, at least til I get up and running smoothly. Even if it's only enough to cover utilities, and trash removal, it'd still help. But I would never let them renter know the amount of rent you pay. Their rent should be reflective of the amount of space you give them, a portion of the utility costs, and operating expenses such as trash removal, register tape, labor, carry out bags, etc. Another upside is that a customer may come in to see the other person's merchandise and end up purchasing yours.

But you'd need a system to keep track of their sales so you could pay them at the end of each week/month, how ever you worked that out. Like maybe they write their price on a certain color sticker and whenever one of their items sell, the sales person pulls off that sticker and sticks it on a piece of paper. Then when payday arrives, you just add up the stickers and pay them that amount. Something like that:undecided ? Anyway, just an idea, HTH.

[Fire and Ice]

Run the contract through your lawyer. You'd be surprised what Landlords can sneak in wording that one just skips over.

Figure out if these's a gas leak or whatever, who will fix it and who will pay for repaiurs.

DO NOT HAVE A PARTNER! Just ask Nayla40 about her experiences with new partner and the new store! It's in Off topicarea here.

Keep in mind that there are off seasons and you have got to know what to do or sell to cover those off seasons when candles and gifts are not selling.

Locally, there was a girl who decided after making candles for 4 months, that she knew enough to open a store at our local mall. I was shocked to say the least but less than a year after opening, she's closing because she didn't know what to do in the off months of the Mall.

You must decide what you think you can swing and muliply it by 6 and that's what you should have in the bank BEFORE you sign the lease! That means 6x's the Jan. heat bill for heating, water electric, rent, supplies etc... The best time to open is just before your busiest season.

Sorry this seems like a lot to have on hand but so many people jump into a storefront business and have the unexpected happen to them. And it's that unexpected you have got to plan for, not the day to day stuff.

[deanna]

I opened a shop inside of a tea room about 2 months ago. In it, I sell my candles along with a lot of other items that are handcrafted (high quality, not craft fairish) items that people consign through me. Doing it that way cut down on a TON of expenses because it was not up to me to front the costs for merchandise bought through companies. It is very easy to manage and fun, too! I plan on marketing my candles to businesses in the area and to flower shops for wholesale when things slow down a bit. The thing I love the most is the hours. Be sure you take that into consideration. I am only open the hours the tea room is open - Thursdays and Fridays from 11-2 and Saturdays from 12-3. It doesn't take time away from my family and doesn't cost me any money for employees. The only problem it causes are in instances like today when I can barely move because I am sick - but I am the only one that can run the shop so guess where I was from 11-2? Working! Make sure the hours are doable. People think that running your own business makes things more flexable. For every day that you are not there, it is money out of your pocket to pay someone else to be there.

I think you should look into consignment from other talented people in your area. It definately saves on money and time. As for shelving, look for them on sale - target, walmart and kmart all have nice shelving units that go on sale for $25-50. You can always make your own, too! Good luck!

[sockmonkey]

Unfortunately, I don't think I'm in a position to give you costs for utilities, because they can vary wildly from location to location. In my first store for example, gas during the winter, ran around $50 per month. The store I'm in now, my gas bill was over $200 per month! So, my advice is to check with the utilities--electric, gas, water, sewer and see what the previous tennant paid.

Regarding trash, where I am there is a lot of competition among waste removal companies--you should call a few in your area to get the best pricing. They might try to sell you a dumpster, but do you really need one, or could you get buy with an oversized trash can?

As for your checking account, do you already have a business account, or are you referring to your personal account? Banks will have different programs for business accounts vs. personal accounts.

You definitely need to check out the new place. Make sure you have adequate electrical outlets, and that they all work! Check on the plumbing--toilet flush ok? Adequate water pressure in the sinks, with hot and cold water? Furnace/AC work ok? Any leaks in the ceiling? The first place I rented was not the least bit appealing to the eye--ugly, dirty mint green paint and lots of dark paneling was everywhere. My husband took one look and couldn't believe I rented it. He just shook his head in disbelief. It's amazing what a coat of paint and a little creativity can do though. I transformed that place into a very charming gift shop and received many compliments. Not to brag--well, who am I kidding, yes I am...People would walk in the door and stop in their tracks and look around in awe because there was nothing else like it around the area. So, don't be discouraged if this place isn't everything you hoped it would be. Keep an open mind, and develop a vision for what you can do to the place.

[The_Dallas_Texas_Dean]

The only thing I can add is when you are negotiating your lease is to get a no competition clause if the location is one of several owned by the same landlord. Also, at that price, I would try and get a LONG lease or at least a couple of options. If not, have it written in how much the increases can be "capped" at..ie cost of living %'s. Also, I would have it written into the lease that the landlord is responsible for the Air/heat units.If you are lucky enough to get a long lease, you could possibly get some TI dollars ( tenant improvement ) which will enable you to do some finish out for your usage. In most triple net leases, the tenants are responsible( for the air conditioning and heating units ) unless it is negotiated otherwise. I have had units go out and had to incur the expense of purchasing new ones. Also with triple net leases, you are responsible for the owner's taxes and insurance and are required to furnish several types of Insurance to cover the owner of the property. Make sure that the location is well lit around the exterior of the building. Security is a huge issue these days. Also, check with the city concerning any signage restrictions.

And most importantly, you HAVE to trust your product and absolutely KNOW it is the best and better than anything else in the area. It has to be unique and superior quality.

From what I am "hearing" from you it sounds like you want to do it. If you have all these bases covered that everyone has mentioned, I say GO FOR IT! I have owned my own businesses for over 25 years in several cities and I have loved every minute of it. Make sure you fully understand your lease and remember that EVERYTHING is negotiable!

Good Luck!

Michael

[Lorrie]

Thanks everyone for your imput but I know that at this time I do not have the capital to do something like this. Yes, this is something that I want to do someday. NOT anytime soon.

Mountainmadness and I are thinking about this the same way. i want to have XX amount of $$ in the bank before I do something like this. I wanted to make sure that I am not underestimating the start up cost. That is why I turned to this board. I know that people here have start their own retail stores.

I want to thank everyone who give me their imput!