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tcgroup
05-22-2011, 01:30 AM
I'm in the 'thinking about a small business' phase, specifically a retail store. If I wanted to open a brick and mortar cellular store with me as the only employee, what reoccurring expenses am I missing that relate to the store only (minus the inventory)?

1. rent
2. utilities: electric, water, trash, phone, DSL, security
3. insurance
4. software subscriptions
5. marketing

I'm trying to determine what my sales amount needs to be to justify opening a brick and mortar store versus online only. Thanks for your help!

Patrysha
05-22-2011, 01:52 AM
paper supplies (till tape, bags, price stickers), cleaning supplies (paper towels, glass cleaner, dusting stuff...etc), postal/shipping expenses, memberships (community associations, Chamber, etc),

greenoak
05-22-2011, 10:00 AM
we have a retail store....and hope for expenses being under 30% of sales...
..i would figure in 10% for unknown expenses and little disasters.......
also you should figure in your pay right from the start....maybe low to start but it should be in there too...

tylerhutchinson
05-22-2011, 08:46 PM
You would want to look into your business supplies (paper, pens, staples, ink paper) and other industry specific costs (cost to re-stock merchandise, ATM fees). There are soo many minor things that can build up over the course of a month.

One other thing you will want to break down more or set a price on is your marketing. What sort of marketing are you doing, and how are you going to do it. What amount of money are you looking into putting into marketing? Things like signs on your store and keeping them updated can cost money. Also putting ads out in papers or fliers can cost a lot over time. Online marketing can get very expensive to if you do not do it right. There is a reason why there are marketing firms. It seems simple but to get the biggest bang for your buck you have to do a lot of research and review to determine how to spend the money. Especially if you do not want to spend much right away.

As far as income, you will want to put a certain % of your net profit back towards the company. I reinvest 20% of profit into all of my companies to expand marketing and expansion. It is good to have money saved on the side just in case you have to replace higher cost items that are not normally reoccurring (cash register, shelving).

Make sure all of this is built into a detailed business plan to make sure you do not get caught with extra expenses. It is also a good idea to check local competition and create a break even cost analysis. That will give you a good idea of what you may be in for. With the industry you are getting into as well it would be beneficial to possibly expand online and sell that way also since your industry is growing in online sales and decreasing from traditional buying.

Hope this helps. :)

tcgroup
05-23-2011, 11:22 AM
Thanks for the comments. WOW there are a whole bunch of little things I didn't even think of. Can someone recommend a good book or website that has a checklist of this stuff? I'm currently writing the business plan which is definitely helping me sort out my ideas and plan.

Patrysha
05-23-2011, 11:42 AM
You might find what you're looking for at Retail Minded. Also I found the Dummies series of books fairly complete...there were a few in the small business area.

tcgroup
05-23-2011, 01:27 PM
Thanks Patrysha. Is the ASBDC helpful? And how do I go about finding a mentor?

tylerhutchinson
05-23-2011, 04:03 PM
There are hundreds of books on it. The small business for dummies is alright. There are more in depth ones that I prefer. I would go to Barnes and Noble and check it out and review a few first. My Barnes and Noble has a whole section devoted to small business owners.

Also SBA.gov has great info on getting going including worksheets to help with analysis and business plans. When doing my first business plan I also reviewed already done business plans on the internet if you simply Google "business plan examples." That gives you a good idea of how the finished paper should look.

If you have a community college you may also want to look into taking a few classes for fairly cheap. That way you have a teacher and textbook. I have my degree in business management but took extra marketing classes and small business classes outside my degree to get the extra knowledge and picked up so much more that was not included in the degree program itself. My local college only costs about $50 per class plus around $100 per book and has assistance so it really was very little out of pocket cost.

Hope everything works out for you!

MostHeather
05-31-2011, 12:44 PM
I hope that I'm not coming in late here - there's already a lot of great information - but don't forget about taxes, merchant account processing fees, local fees, any applicable state/local/federal licenses that you need to operate. How are things going for you, if I might ask?

Reflo Ltd
05-31-2011, 02:48 PM
Regarding Merchant account fees.... I used to have a credit card machine and the fees were horrible.... especially because I had infrequent need for it. Now that I have my new product out I started up again and have regular need for credit card processing..... BUT... I am using Paypal Virtual Terminal. It only costs $30 per month, plus transaction fees. Nothing else, nothing hidden, NO CONTRACT... I can suspend use or terminate use at any time with no penalty.

I simply enter credit card info through their online interface and that's that. I was even able to use it at a trade show with excellent success. Yes it does take a little longer to process a card by entering manually but it is perfect for our needs.

JohnP
06-28-2011, 04:25 AM
There's always a reoccurring expense, which is not a fixed rate and varies from business to business, it's the "ruined" goods that you can not sell and those goods get damaged due to different causes (humidity, bad production in factory...) My point is that you can not count on your whole warehouse or inventory as "salable".

huggytree
06-28-2011, 09:26 PM
accounting
payroll

i also include office time in my base price....i have 1 hour in the office for every 5 in the field...it adds up to $10 per hour...make sure you pay yourself for all of your office time

SmallBusinessAdvice
07-01-2011, 08:59 PM
I'm in the 'thinking about a small business' phase, specifically a retail store. If I wanted to open a brick and mortar cellular store with me as the only employee, what reoccurring expenses am I missing that relate to the store only (minus the inventory)?

1. rent
2. utilities: electric, water, trash, phone, DSL, security
3. insurance
4. software subscriptions
5. marketing

I'm trying to determine what my sales amount needs to be to justify opening a brick and mortar store versus online only. Thanks for your help!
How do you plan to market your store and why do you want to have a physical location? How will your store be different compared to other stores? Hint, you want to be different in some way and don't pick low price as your choice.