The retail business can be profitable and exciting, but it’s a competitive field if you want to achieve sustained success. Starting your business with a brick-and-mortar store can be difficult, though transitioning from an online-only operation to a physical store can present its own challenges. There’s no easy way to stay on top in the retail world, but a strong business plan and a sensible budget are necessary to get started. However, if you’re new to the retail business or the area where you’re working, it can be tricky to know how much money you need. If you’re considering a retail venture, keep reading for more information on how much it will cost you to open up your own brick-and-mortar store.
How much does it cost to open a brick-and-mortar store?
An online storefront can be a great way to get your brand started, but many people want to invest in a physical space for their business. In 2019, only 16 percent of retail transactions were e-commerce sales, meaning there is still a significant role for physical stores to play in the retail ecosystem.
The costs associated with opening up a physical retail store are significant, though it may be worth it depending on what business you’re in and how quickly you expect to achieve profitability. Most experts recommend having enough to cover your expenses for two years. Rent is often the largest expense, but that can fluctuate heavily depending on where your business is located. Startup costs for a brick-and-mortar store can be upwards of $100,000 or more.
You’ll also need to consider the cost for important additions like physical security systems with scalability in case your operation grows in size. It’s your responsibility to take preventive measures to create a secure environment, even and especially in case of an emergency. Monitoring activity on the inside and outside of your stores is essential if you want to effectively deal with real-world threats like thieves. A security system also enables you to institute key card access for employee entryways and exits, in addition to a restricted area like your stock room. You can even opt for a system with facial recognition if you want to maximize your workplace security.
What supplies do retail businesses need?
Opening your store is only the first step, businesses need a steady stream of supplies to keep the wheels turning. These can include laptop computers, fasteners, printer ink, flyers, business cards, and plenty more. While individually the expenses are small, they can add up over time. It’s important to include everything you need to operate your store when you’re making your budget.
Tax folders are a useful purchase since they can help you organize all your receipts and documents. Sorting out deductions and expenses is difficult even for the most prepared people, so it’s smart to make things easier for yourself when tax season rolls around. Folders are just one type of business product you can customize. Most businesses customize all of their paper products so that they have their company name and branding on everything from invoices to binders to envelopes. You can even give out some branded swag and accessories during special promotions.
Owning a retail store is a huge achievement and a major milestone, but it takes a lot of hard work. The startup costs, especially when you include rent, can skyrocket into the six figures. You’ll also have other expenses, including instituting adequate physical security and cybersecurity measures. Security can be expensive but it’s important to invest in it if you want to keep your staff, your sensitive data, and your store protected. Electronic security systems provide several effective ways to manage the safety of your business. If you don’t have the capital to invest in a physical storefront right away, you can start out online until you build up the liquidity and brand recognition to transition to a brick-and-mortar store.