Thinking about opening my own brick and mortar shop

[arshavin]

This is totally alien to me. My only experience of selling is via the Internet. I haven't even worked in a corner shop or anything similiar so I have no idea how it works.

I am going to ring the princes trust and business link to see if hey can offer me some advice. Maybe you guys can too

How do you go about researching a idea? My idea will be tough to get any in depth research because its sort of a new business type but shops are starting to pop up. I'm guessing there is no more than 20 in my city though but they seem to be appearing fast.

I don't think I would be selling huge amounts of items per day but the margins are superb. I have suppliers in place that can ship whenever.

I know this is a wishy washy message but I am looking for some advice no matter how big or small

[GreenBean]

Planing, re-planing, planing are the key.

Subscribe to different (free) sites like
Businesses For Sale UK - Sell or Buy a Business for Sale

Apart from having businesses for sale, there are artciles written by people in the know.

Planing, yeah I said that. Funds are essential.

Dreams with a touch of realism.

[arshavin]

Without sounding like divvy but what type of planning? I am going to sit outside the closest shop which sells the same goods for a hour now to try and get an idea of how busy it is.

[Sandy D]

Owning a brick and mortar shop is a ton of responsibility.

As always LOCATION-LOCATION-LOCATION is first and foremost and then of course products, sales, customer issues and all the other things that goes with owning a shop.

I would consider it only if it would more then double my online sales output.

A plus would also give you time maybe to do both shop and online sales at the same time during slow times.

[GreenBean]

There is a great clue from Sandy

You can bring your online skills to supplement the brick and mortar side

[AuctionsDenied]

Originally Posted by arshavin

Without sounding like divvy but what type of planning?

Part of your planning should include.

Figuring out what your working capital is.

You have to factor in additional operating costs.
Rent, utilities, fees, insurance, decor, labor costs etc.

You have to make sales projections based on your margins to see how much you have to do in sales to be on the positive side.

Good Luck

[arshavin]

Thanks for the replies guys.

[Dmshark25]

I owned a brick and mortar store for 15 years its not something to taks lightly.

Make sure before anything you research research research, make a business plan to include everything.

Online is absolutely awesome , I love it , when you have a brick and mortar shop there is so many headaches a ton of responsibility and a lot of bills.

Its nice owning sonething but its less glamour than it seems and a lot of hard work, sleepless nights and weeks with no paycheck, be prepared

[arshavin]

Great post man thanks. Would it be ok to maybe pm you sometime?

The item I plan on selling isn't a big seller on ebay or I would just focus on that. I plan on making a website but getting to the top of google rankings isn't something I am experienced in and I Imagine it to take a long time.

[newjerseymax]

Google should not be top of list for B&M advertising.

[Dmshark25]

@arshavin. Yes Id be glad to give u any help if I'm able too.

For me my brick and mortar store is totally different than my ebay business, I found a great item and just love it, I feel like I'm getting more reward with less headaches when running an actual store.

I love the long hours and now every hour I put in I get back in rewards. When you have a brick and mortar you better be prepared to work all day and especially in the beginning you will just be keeping your head above water and try to buy as much time to be able to build your business while being able to pay all the bills to keep the doors open.

Just remember with ebay the location is excellent, the traffic excellent , advertisement is phenomenal and more importantly pretty much all done for you

With your own store all those factors need alot of attention , finding a great location with traffic having money for advertisement and than having a great product , it's alot to handle.

It may be better to go the online route and just focus on the product.

But I have nothing but best wishes for you and hope you succeed in ur new venture

[arshavin]

Originally Posted by newjerseymax

Google should not be top of list for B&M advertising.

B&m advertising?

I'm starting to think a brick and mortar is a bad idea now haha. Maybe it's just a website I should be looking at.

I need to scope the local shop out and see how busy it really is.

They are selling a kit for 3 times more than the supplier supplies for. Super margins. I wouldn't need to sell many per day to make it work. 1 sale and hour would be enough I'd say.

What type of start up costs would I need do you think guys? Sometimes we just need to take a risk. Depending on how much that risk costs ha

[Dmshark25]

You need to do alot of research on location make sure your in a high traffic area and one very important thing is parking. So is the location great and is there enough parking. Without these two , forget it. Than figure all expenses: rent, electric, water, gas, hvac, etc.... Factor in payroll and include yourself with your role in the store. Find out how much all taxes will be: sales, payroll tax, etc..

You need to make a business plan that contains all these expenses all the way down to stationary, you really should have an accountant help with all the numbers , sales projections ,etc...

You need to put a thick book together outlining every aspect of your business from sales projections over the next 5 years to payroll to utilities and rent to taxes . U need to cover all operations

Before you even start to be successful you need to research everything and have it all in writing down to the last penny and all operations , everything. And once you create this highly researched business plan you will see on paper if it will be successful or not.

Just remember location, location, location. And than advertising, u really will have to make an allowance each month towards advertising and utilize every dollar to the correct advertising for your product.

Without a great location and great advertising you won't survive. You always need to be evolving and researching to keep ahead of your competition.

Definitely get an accountant to help you with all the numbers in your plan so that there is no cost that comes as a surprise.

Having your own business can be very rewarding if done correctly and if you have the work ethic in you.

Don't rush anything if it takes 5 years to find the right location than so be it, don't just get any location out of haste

[GreenBean]

Originally Posted by arshavin

B&m advertising?

I need to scope the local shop out and see how busy it really is.

You have to do much more than that.

You would need to go to the Local Town Planing. You must find out if the proposed site is going to be in existence in a year or longer. What if that shopping centre is going to be revamped/demolished?

You could 'see' a shop for sale at what appears a 'good' price. But it is a good price because its owner knows the site is going to be closed.... no use to you for long term trading

This is just one part of the tricks of brick and mortar business. It is complex.

[Bunneh]

Also remember on ebay you reach the WHOLE of the UK with your sales and potentially worldwide as well, where as a physical shop is more than likely only going to reach the town you are selling in.
Sales may drop more than you think.

[rsot]

Originally Posted by arshavin

I'm starting to think a brick and mortar is a bad idea now haha. Maybe it's just a website I should be looking at.

Lot more overhead costs for brick and mortar compared to website is one thing to consider seriously (among others)

[jeffweico]

If you decide to do this, please go into it with your eyes open. Many people starting such ventures are living in a fantasy world. It is TRUE, if you have a successful store and run it right, you can make a lot of money. There are many store owners who have way above average incomes.

But, there are a lot of responsibilities. Not to mention the start-up costs involved and the monthly fixed costs. Fixed costs are things like rent, insurance, telephone, electric, etc. Variable costs are related to each sale. The variable costs are not usually an issue, it is the fixed costs that can kill you.

I have owned a store before. Granted, that is in the US, but most of these things apply regardless of the country the store is located in.

First, you must have a good location with a lot of traffic, either on foot or by car. If you are on a side-street somewhere, nobody will know your store exists. High traffic locations are usually not cheap. When looking, as Greenbean pointed out, make sure that the location is not scheduled for demolition or anything. And, parking is a MUST! If it is inconvenient to shop in your store, people will go elsewhere.

If the building owner is going to remodel the store for you, get everything in writing. If you are going to take care of it, find out how much everything will cost BEFORE you sign the lease! Ask if you can use ANYONE to do the remodeling, or if you can only use certain companies. Sometimes, such restrictions are in the lease. When working with a small list of available contractors, things can get expensive quickly.

Consider all of your expenses. It is easy to forget things. Here is a partial list of some fixed costs I can think of off the top of my head:

• Rent
• Electricity
• Heat
• Phone
• Insurance
• Licensing and fees
• Security (Alarm System)
• Cleaning Service (unless you do it yourself)
• Trash pickup
• Water and Sewer
• Property Taxes (not always included in rent)

You must establish hours for the store and stick to them. If you are open from 10am - 8pm, then you don't want to close at 6:30pm. Nothing turns off customers like a store being closed during hours they are supposed to be open.

Unless you plan on living at the store, you will need some employees. I don't know what the going rate is for store clerks in the UK, but there are always some hidden costs involved in employing people above and beyond their hourly salary. In the US, employers must match their employee's social security contributions. We also have to pay unemployment insurance, workers compensation insurance, head taxes and sometimes we provide a benefits package - like medical, dental, a bonus plan, etc. Depending on what the employees are doing, they also may have to be bonded and that can cost a fortune! Also, unless you are planning on being the proud new owner of Scrooge & Marley, plan on some bonus money for Christmas and also an employee incentive program. They can really help with their attitudes and sales. Not to mention, be careful whom you hire. Customers don't want to deal with nasty people and their nasty attitudes.

You MUST be totally dedicated to your store and be prepared to step in when necessary. What happens if an employee calls in sick and you need to take your daughter to her doctor? Will your wife understand that you have to fill in on Saturday because nobody else is scheduled to work that day? If someone tries to break into your store, or if you have a false alarm at 2am, who do you think will have to go down to the store to take care of it?

Make sure to train your employees that if someone tries to rob the place, just give them whatever they want. It is not worth being shot over inventory. You should be insured against theft. Not to mention, you will need liability insurance in case anyone gets hurt on your premises.

You will also need to advertise the store. This could be a TV commercial, newspaper ads, flyers or whatever might be appropriate for your business. It is difficult to know with certainty how much advertising you will need or what will work. But you should try to estimate a realistic monthly advertising budget.
Make a budget for professional fees as well. Most business owners need help with things like licensing, taxes, legal matters, accounting and anything that might come up which is not in your area of expertise.

Make sure you have enough money saved to live on for at least 6 months. And the money to keep the store going if there are ZERO sales. It can takes a few months before a store starts to show a profit and you don't want to be forced to close up shop after the third month because you ran out of money. Lack of working capital has killed many a business.

Also, be aware that should the store fail, you are still responsible for the rent each month until the end of your lease, or until it can be rented to someone else, whichever comes first.

If you have a product that people want, a good location and a good business plan, you CAN make good money from a store. You mentioned these stores are starting to pop up around town. That is a mixed blessing if the items being sold are popular. It is good in the sense that you should be able to get customers for your store. It is bad in the sense that a competitor could open a short distance from you with lower prices and a nicer store.

I'm not trying to be Mr. Negative here, but a lot of people think they will be a huge success from day one and they will hire people to run it for them and stop by a few times a week just to pick up their profits and see how things are going. But - usually - that only works in fantasyland.

[jeffweico]

Just wanted to add a couple of things....

If you go through with this, you might want to - if people ask - tell them that you are the store MANAGER rather than the owner. Why? Because many people will come in asking for donations for community events, kids sports teams, school fundraisers, etc. You can tell them you will pass on their request to the owner. If you are successful, buy some girl scout cookies once in a while, or sponsor the school baseball team. You don't want to be known as the town miser. You also, however, do not want to be known as an ATM.

IF you are evaluating a similar store, trying to determine how much business they have, make sure to get a good sample of the numbers. If you just sit out front of the store counting people going in for 2 hours on Saturday, your numbers may be woefully off. I would also count the number of people who walk by the store and try to get an idea of how many cars per hour go down the street. Then, do the same for the location you are thinking of renting. That will tell you if the foot traffic and car traffic are comparable to the existing store. If they are not comparable, it would be like comparing apples and oranges.

[jeffweico]

And a couple more...

Be careful of hiring anyone with a hygiene issue. Nobody wants to deal with people who stink! I was in a Subway restaurant the other day and I walked out when I could smell the guy behind the counter. I'm not talking about a little bit of B.O. - this guy could have made a skunk puke!

Also, in the US, most of our malls have little kiosks (stands that look like carts in the main public areas of the mall) that cost a lot less than a store. If your item is popular, you can make a fortune from one of these little kiosks. I have never operated one, but I know someone who has. He sells e-cigarettes and makes a small fortune. I'm not sure if this is an option in the UK, or if your item would sell that way. But you WOULD eliminate a lot of expenses and solve any traffic issues - assuming the mall is not dying.

[hardybents]

question- can you get 26 million eyeballs looking at your items at your B&M? Probably not. EBay-although a pain is king. plus you can do a ton more with seo and landers, craigslist, banners, buy traffic, social media etc etc.... spend the money online.

[arshavin]

Originally Posted by hardybents

question- can you get 26 million eyeballs looking at your items at your B&M? Probably not. EBay-although a pain is king. plus you can do a ton more with seo and landers, craigslist, banners, buy traffic, social media etc etc.... spend the money online.

Jeff thanks a ton for taking the time to post all that. Awesome info thanks.

Hardybents do you have experience in the highlighted areas?

[defon]

Originally Posted by Sandy D

Owning a brick and mortar shop is a ton of responsibility.

As always LOCATION-LOCATION-LOCATION is first and foremost and then of course products, sales, customer issues and all the other things that goes with owning a shop.

YES!!! YES !!! YES!!!!

I owned a brick and mortar furniture store for 3 years and helped a friend run his store for 5 years before. So I had experience...

I have a good friend , only 26 years old, that made $2K a week on ebay for years. About 8 months ago he said he was going to open a store (brick/mortar). His rent is $4,000 a month with a 3 year lease. And a PG (personal gaurntee) which means if he fails he is on the hook for $144K (each state is different in the courts... here in FL-- only a BK will work (get out the debt) and it must be done BEFORE the landlord gets the judgement)..

Anyway I told him ""NO WAY!!! DON"T DO IT!!!!""
You see I lost $20K investment when we had to shut our doors in the furniture store and I had 5+ years experience... yikes.

My friend is now making a THOUSAND dollars a day. But here is what he had that I didn't...

Listed in this order by my opinion of importance.

1) Mom and Dad own 4 retails stores in the SAME AREA (very important to know the market by region). 25+ years!!!! AKA EXPERIENCE!!!!

2) LOCATION LOCATION LOCATION. Again from experience from his family made this possible. SAYING THE WORLD location three times doesn't mean you know which locations have the most value. The only people who know which locations are the best ARE YOUR competitors and they aren't telling, unless they are your parents like in this case. lol

3) Great product price but more important than that $40K in cash reserves he got from his parents.

After losing $20K I would require all 3 to try again. I was working over 60 hours a week when we were losing money every day for about a year... very sad.

I hate to sound like a joy kill but this is how I see it.

If you don't have a connection in your market then go make some friends and after a few years make a move.

If you are a gambler , like I was, then have fun and keep your fingers crossed.

GOOD LUCK!!

:-)