Whether you plan on selling home decor, rare collectibles, or books, establishing a budget for your retail store will help ensure you have a successful business launch. Here are the main costs to keep in mind when putting together your budget.
Once you’ve chosen the location for your shop, you may need to tailor the space to meet your business’s needs. This may mean more money upfront to renovate or remodel the space, such as building shelving or display cases, or infrastructure such as dressing rooms or office space.
One of the key considerations when setting your shop up will be how to display your products. Visual merchandising is an important part of running a retail store. Will mannequins and hangers be required? Do you need a custom wall-banging built? All of these items need to be budgeted for. Make sure to consider the small but necessary items, such as price tags and signage too.
Your monthly cost for bills like electricity and gas will depend on the location and the size of your business. If possible, shop around for your best deal — it could save you thousands. Consider whether there are any sustainability measures you could put in place to cut costs, particularly if your products or brand will be marketed as eco-friendly.
Another major (but necessary) cost will come from legally protecting your retail business. Getting the right insurance coverage for your business is crucial.
There are many different types of coverage you may require, including business property, business income, business liability, business crime, product or public liability, and WorkSafe insurance. Read up on your state-based insurance requirements via the links below.
To be successful, your store will need to have the right products, available in the right quantities, at the right time for your customers. The costs from your inventory will come from not only the price of buying the stock, but how much you pay to store it all. Buying and storing inventory will be an ongoing cost to factor into your budget.
How much, or little, space you require to store your inventory is an important consideration when determining startup costs. Do you need a storage container? Can you use a spare room at home? What protective measures are required to securely store your products — such as plastic wrapping, or temperature control? How much will that cost?
You may need to hire staff to help with the day-to-day running of your store, and with staff come costs. These costs include wages and any other benefits you offer, as well as uniforms, name-tags, or any other accessories staff may need to look the part.
There are also intangible costs to consider, such as the time it takes to train new employees, get them on your payroll system, create rosters, and in managing them.
When it comes to marketing your new business, you’ve got to spend money to make money. Plan your marketing strategy around your growth model for your business and budget accordingly.
Marketing costs will generally fall into two camps: physical and online. Your physical costs will be things like the design of your logo, business cards, and any promotional material you require. Online marketing includes the cost to build your website, and online strategies to reach your demographic — such as a locally-targeted digital campaign to bring people to your store.
Investing in the proper equipment is an important purchase for your business. An EFTPOS terminal, like Zeller, that allows you to receive payments fast and be mobile means less fuss in the long run. A security system that can protect you against stolen stock or money is also an additional cost that may benefit your shop.
The first step to determine how you will fund your new business is by writing up a business plan. Going through the process will give you an estimation for how much money you will need in the bank to fund the venture, and help to identify other sources of funding.
Some options for funding your business include:
Ready to take the next step? Zeller helps Australian businesses grow by charging one low fee for card transactions, and never tacking on hidden fees and charges. That means more money stays in your business.