What Does It Take to Open a Brick and Mortar Store?
When looking to launch a brick and mortar store, a catchy business concept is not enough to get you where you want.
You need enough capital and a well-thought-out budget –which is easier to draft if you understand the costs involved.
Discover the most significant costs to have in mind when looking to open a retail store:
1. Location
Where you set up your shop will influence how your business performs.
The best location means a place with regular buyers/consumers and foot traffic, and enough space all which come at a cost.
For that reason, you should consider the deposit costs as well as any funds needed to conduct a remodel or customize your new location.
2. Rent
Apart from the initial cost of the space, you should also consider the rental charges.
Rent is the monthly charges of your space based on its square footage as well as its real estate value. Places that see high foot traffic or are in popular areas see higher rents.
3. Utilities
Your monthly utility expenditures will largely depend on the gas and electricity costs in your surroundings and the size of your store.
The climate of the area also influences how much you will spend on electricity.
4. Employee costs
You need a team of staff to ensure the smooth running of activities in your new store.
While considering wages, salary, and bonuses, do not forget to factor in the costs of training and completing payroll. Also, some businesses require that you cover employees from injuries which is an extra cost to remember.
5. Insurance
Insurance coverage should be in your list of must-haves.
Different policies cover you from different liabilities. The most common forms of coverage include business income, business crime insurance, business property, business liability, and business crime insurance.
Visit the SBA for more info on insurance requirements.
6. Merchandise
These include initial merchandise costs plus the holding cost (inventory storing charges).
Once you’ve paid out the initial costs for inventory, you can concentrate on monthly inventory costs that will make part of your future budget.
• Merchandising equipment
Startup owners must also keep in mind the costs of equipment supplementing their products as well.
You must set aside some finances for shelves, hangers or any other equipment or infrastructure you need to keep your store on the run.
7. Technology
Tech is critical regardless of the industry you choose to explore. You need to invest in the latest tech and equipment from the word go. Purchase a robust retail POS system with integrated tech for your business. If possible, install security systems to protect products from theft, burglary, and other crimes.
8. Marketing
Never overlook the importance of including marketing costs in your budget.
Most startup owners only realize they need to market their products as soon as they’ve exhausted all finances in setting up the store and paying out other charges.
The most important marketing costs to remember include logo design, business card, and website setup costs plus any other additional fees involved in critical promotional campaigns.
Now you know the costs involved in putting up a brick and mortar store. Be careful when drafting a budget so you do not miss on the small important details.
