Any Experience in Opening Your Own Storefront?

Updated on August 23, 2013
❤.M. asks from Santa Monica, CA
6 answers

For any of you that have opened your own brick & mortar storefront, what was your first item on the agenda?
Did you name your business & register it?
Did you get a business license?
Then did you secure the products?
Then off to leasing a store front?

What was your biggest hurdle?
Biggest headache?
Where did you find your inventory? Different vendors?
At what stage did you secure your commercial/business loan?

I took a class twenty years ago but decided not to take the plunce. Am starting from scratch as far as knowledge.
Any advice appreciated.

Would love to have a tiny storefront carrying cute odds & ends, knick knacks, cute signs etc.
Could you staff it yourself if only open from 9am-5pm so as to avoid costly payroll & insurance?

What can I do next?

  • Add yourAnswer own comment
  • Ask your own question Add Question
  • Join the Mamapedia community Mamapedia
  • as inappropriate
  • this with your friends

More Answers

T.F.

answers from Dallas on

We don't own a storefront but we do own our own successful company.

#1 we sat down with our legal, tax and financial counsel and laid out our business plan to them. We did NOT want banks, personal investors, etc involved because we wanted to make sure we continued to maintain 100% control of the company. Example... if a bank loans you $ for your business, then they expect you to meet with them when they say they want to meet go over your books, forecasting and plans. Then THEY strongly suggest what you do. For that reason, we did not want anyone else "owning" us. We have secured everything with our personal finances therefore we are 100% owners.

It did take some time to develop credit with come vendors. Although we were known in the industry, no one will just hand out credit because they like you. We took advantage of paying cash to get the credit going.

Our sales average from $250,000 to $400,000 a month so it gets very stressful because you have to be very detailed with cash flow, accounts payable and receivable.

Everything else I list is in no particular order.

get all the licenses and tax numbers your need from IRS.

make sure you have someone knowledgeable to run all of your tax reports, payroll, keep up with inventory, profit loss, QuickBooks, etc.

Don't expect to take a salary for at least 1 year. When you start taking salary, you will need to file the necessary 941 quarterly reports and pay your taxes monthly to IRS.

That said, my business is not a storefront. In any case, you'll have to have insurance for the goods in your store as well as liability insurance for the sue happy people who slip and fall, etc.

We work from our home and our warehouses are in Dallas and Houston.

If you are the only person working 9-5 then those are your hours of business. You can always add part timers if you need to for holidays, etc.

I hope your new venture is a success...

5 moms found this helpful

C.O.

answers from Washington DC on

I personally have not opened a brick & mortar store. My girlfriend has. I was with her from idea to opening...

First thing - she decided on a concept - what was she going to sell? She had a lot of high end clothing - purses - shoes - so she opened up a consignment shop. She has been open 2 years this November.

Second thing - location for the store and funding. She had had a house fire so she got money from the settlement for that and used a portion of it for lease, etc.

Third thing - she got in touch with a lawyer and an accountant. Made sure she was operating legally -

Fourth thing - got a webpage and started advertising her "GRAND OPENING".

Where did she get her inventory? From her own closet, then from stores like Macy's, Nordstrom's, etc. when they had their end of season sales, ebay, then from consignments - she got consignments before she officially opened so on the night of the Grand Opening - she had a "full" store! She made a great first impression and people keep coming back for more! :)

She also started going to business luncheons in the area. Networking with other consignment shops and other businesses....one W. sells her soaps there, another sells her "knick knacks" - they have a legal contract splitting the costs of sales, etc.

her biggest hurdle? dealing with the economy....the good thing is she has stuff priced right so people come back. People enjoy the money they are getting from getting rid of clothes they don't fit into or don't wear anymore...and when they come in? They usually buy something else! So it's a win-win for everyone!!

You need to know your customer - you have to have a product that people WANT to buy. I would do a test market - before you sign a lease - sell at flea markets and talk to consignment shops - show them your wares and what you are wanting to sell them for and what their take would be. Make sure there is a demand for your items. If they are selling on ebay or Amazon - go work it harder. If they aren't - then you need to tweak your product and/or your price. If you can walk away from a flea market or even Farmer's Market - with most of your inventory gone? Keep going back until you establish a name and regular customers....that's when you know you can afford a store....then tell them where they can find you....don't forget a website!!

You need to know WHEN your customers shop.
If you aren't open when people get off work? They won't come to your store. KNOW your customer!!!

You will still need insurance - renters/lease insurance. Payroll? I would see if I have the revenue to even consider an employee. You will still need to follow the employment laws of your state as you will be considered an employee/owner. So talk to a lawyer, know what you are getting yourself into.

Funding? Really - I wouldn't go for a small business loan until I knew that my product had a demand....and I could prove my product had sustainability. Watch the Shark Tank - see what people are inventing and heck - apply for the show - but you better have a business plan set up, a history of sold merchandise and knowledge of your customer....

I can't stress that enough!! KNOW YOUR CUSTOMER!! The reason my girlfriend's consignment shop is working? People WANT designer labels and not have to pay full price....she's got a VERY welcoming store and she has an eye for fashion!!

Good luck! Hope you have much success!

5 moms found this helpful

L.A.

answers from Austin on

You need a business plan.

You need to have the vision on paper with all of the financials planned for at least the first 4 to 5 years.

This will include the information you have gathered on the market you will be selling to. The product availability. The sales plans, based on your research.

The overhead including the lease, the electricity, the liability insurance, the security, technology. The employee wages. Even if it is just your wages.

This will lead you to the number you will need to make in sales for each week for each month and then the years.

This will then give you your "buying" plan for each quarter. If you realize people like your small decorative items, then you may need to focus more on those. If you realize linens are just too hard to keep in stock, maybe instead you will concentrate on just some decorative rugs and pillows.

In this type of business, you may want to consider buying the remnants from other small stores. Old stock, bits and pieces. This way it is new, but it is a few seasons behind.

Remember, most Estate Sales, tag sales and garage sales are on Saturday mornings.. so you will need someone to run your shop on Saturdays at least until noon, while you are shopping to fill your shop. Get to as many of these sales as early as possible, so you can get first look.

You may even want to go to other towns and cities, so the locals do not end up seeing their things in the shop.

Remember to Find out the state and local requirements for a retail, store front. Example, here in Austin IF you have a restroom in the premises, it needs to be ADA compliant. From the outside all the way through the store leading to this bathroom. This is why some stores do not have restrooms, this way they do not need to meet this requirement.

But if you are going to sell any edible products, with samples being served. you will need a ADA compliant bathroom with hot water.

This is why you will need to be very detailed in your business plan, so that these situations are not a surprise.

Good luck! You can do this.

Consider options. Like finding a business already established that you could rent floor space, just to see how it goes.

3 moms found this helpful
Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

L.C.

answers from Los Angeles on

Because you are so early into your proposed venture, might I suggest that you get your toes wet by opening up a booth at the Orange County Swap Meet or some other local swap meet or farmer's market? It takes a lot of capital to open up a retail store in So Cal. A lot of stores out here in Illinois carry cute knick knacks, but people don't actually buy them. They see cute ideas in the stores and decide that they can DIY those items at a much cheaper price. And the cute little shops don't stay in business long.

I used to live on Balboa Island in Newport Beach, and the cute little gift shops on the main shopping strip would do well in the spring/summer, but most would go out of business by the end of the winter (dead season). If losing your business would put you and your family in financial jeopardy, I suggest that you start small and see what it feels like to be an entrepreneur first.

Laurie and TF Plano have given you great advice. I suggest you talk to someone from SCORE to get some input on what direction to take. You absolutely need a business plan, whether you need financing or not. Check some books out from the library. Talk to other small business owners. Then you'll get a sense of whether or not this is the right avenue for you. Good luck!

2 moms found this helpful

C.C.

answers from San Francisco on

You have some great advice from others here. I just wanted to add that I've worked in several retail companies in the Real Estate/Development departments. My specialty is construction, but I've had the opportunity to sit down in some Real Estate strategy meetings. Here are the things big Real Estate departments look for in big retail companies:
1) They have a local commercial realtor who knows local pricing and landlords.
2) The building has to be easily visible from the street (no big trees in the way of the signage, and on a major thoroughfare, or on the main level of a mall)
3) Good co-tenancy (in other words, if your store is high-end, don't go into a WalMart shopping center - instead, go in next door to a White House Black Market, or a Sephora or something). You need to be where your customers already shop.
4) The parking lot has to be easy to navigate, and with readily available parking. If your customers have to make a u-turn to get to the parking lot, you'll lose business. True story.
5) Don't accept the Landlord's first offer on rent and CAM. They always try to gouge mom-and-pop stores. Big retailers usually pay a lot less per square foot. You won't get the deal that a big box store will get, but you can do a lot better than the first offer (this goes back to having a good commercial real estate broker).
6) The Landlord should give you tenant improvement money. If you're smart, this will all but pay for your store buildout. A lot of LLs don't offer this up front, but you can get it if you ask.
7) Most Landlords will require that you stay open the same hours as the anchor tenants in your shopping center. In other words, if Nordstrom is open from 10-8, you will be too. Be sure to take that into consideration when making your business plan.
8) You also need to take into account that some LLs require you to maintain the HVAC systems according to their schedule, and with their approved vendor. Just check into that before you sign the lease, to be sure you've accounted for those types of costs.

That's the short list, but hopefully will give you some things to think about! Good luck opening your store!

1 mom found this helpful
Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

V.T.

answers from Washington DC on

My husband opened an insurance agency so we didn't need to worry about product. But the first thing I would do is scout locations. Find a location where you think the business will do well, and then look into seeing how much it would cost for rent. Then I would look into a business loan.

There is no reason to go through a naming process and getting products, signage and advertising if it's unrealistic that you can afford a storefront.

Even though we didn't worry about product, it still took a lot to get started. Finding a location, setting up utilities and phone service, acquiring insurance (which I assume you need to secure a loan and be protected in the event of an accident at your store), and setting up the location. It took over 4 months to build out the location and just get it physically up and running without having to acquire any product. Be prepared for a long journey.

1 mom found this helpful
For Updates and Special Promotions
Follow Us

Related Questions