You’re planning to open your own business. Congratulations! That’s a big step and an exciting venture. Of course, it’s also a little scary – there’s a lot to do! That’s why we put together this handy list to help you track down everything you need to open your doors.
1. Your Product Or Service
The first step to opening your a brick & mortar shop is deciding what products and merchandise you will carry or which services you will provide.
What are your hobbies and interests? If you’re a foodie, a gourmet store may appeal to you. If you’re an oenophile, then a wine and spirits shop might be up your ally. An animal lover might want to open a pet supply shop. You don’t have to be expert in your prospective product or service, but having an interest in it will make your work life more fun.
2. A Business Plan
Your business plan is your guide for your company’s future. It acts a road map and can help you secure lending. By drafting a plan, you solidify your goals and plans for the future, as well as map out how you’ll overcome the challenges along the way.
When you create a business plan, you force yourself to think critically about how your business is actually going to run. You’ll need to decide exactly what products and services you’ll be selling. If you’re opening a beauty shop, for example, what will you offer? Do you want to provide haircuts and color? What about nails and makeup? Will you sell beauty products as well? It’s tempting to take on too much, so make an honest assessment of the time, space, and expertise you can bring to the table.
To complete your business plan, you’ll also need to figure out your supply chain – where you’ll get all of the products you’re selling. If you plan to sell hair care products at your beauty salon, where will you get them? Where will you purchase the scissors and combs? What about the hair color?
In addition to determining exactly what you’ll sell and what supplies you need, you’ll need to determine what prices you’ll be charging, estimate how much money you’ll be making, and work out your costs for the supplies and equipment. For pricing ideas, you can look to competitors both online and in the local area. You can also shop around online with different suppliers to nail down your costs.
If you’re already running a business from home, you probably have a lot of this information available already. However, you still need a business plan to address how you’re going to expand and how you’ll cover the added costs of running a storefront.
When you have all of these details worked out, you can use that budget to determine how much space you can afford to lease or buy. You’ll also use the business plan to get financing in the form of loans or investment.
Now you know how much money you’re going to need, so the next step on the way to opening your brick & mortar store is actually getting that money. There are many SBA-supported loan options available to small businesses as they get off the ground. Microloans from lenders such as Accion are also available to help you get started.
When you’re getting financing, remember to address all of your costs. That includes a storefront, equipment, supplies, and staff. Once you have financing in place, you can get to work on the store itself.
You know what you’re going to be selling. You know where you’re going to get your supplies. You have the money you need. Now it’s time to find a storefront. You can either lease or buy commercial space. Leasing is often more affordable and gives you the flexibility to move if the space doesn’t work for you or if you need to expand. It also gives you the benefit of a management company who will maintain the building for you so you don’t have to deal with fixing leaks or other problems. Buying a property is usually much more expensive and less flexible – you own it and you can’t just walk away. It will also require getting a large mortgage loan. However, you’ll build valuable equity in the building over time and you’ll have complete control over the space.
Whether you decide to lease or buy, you’ll have to choose a building. That means reaching out to a local commercial realtor to find a space that’s right for you. The cry of the realtor is, “location, location, location” – and the adage proves true. The location of your business is crucial to its success.
- Style: Do you need a formal location? Or a more casual one? A professional front may be necessary for a law office or accountant, whereas a frozen yogurt shop owner would look for a more relaxed space near other consumer-goods shops.
- Zoning And Codes: Some cities and states have zoning restrictions that limit what kinds of businesses can operate in certain areas. For example, some areas may be reserved for retail while others are reserved for food services. You’ll need to talk to your realtor about the zoning restrictions that may affect your business.
- Demographics: Who are your customers? Is your location close to your intended demographic? If you’re looking to attract young families for a baby clothes shop, then you’ll want to ensure that young families are close by or can travel via car or other mode of transport.
- Visibililty: Will your storefront or sign be easily visible from nearby roads? Is there a lot of foot traffic in that area? Will people be able to find it?
- Parking and Access: Is there sufficient parking? Can you make the building ADA compliant for those who need disability access?
- Infrastructure: Can the store support your business needs? A bakery will need access to a commercial kitchen or the room to install one. Look around with a critical eye to determine that this commercial space will be able to handle the demands of your business.
- Competition: Is your location close to other vendors in the same industry? You don’t want to find a space that’s already in a saturated market.
- Room to Grow: You can get more and larger space than you likely have available at home, so when you need to expand, you can.
When you visit potential locations, put yourself in your target customer’s shoes. Would you stop in to shop there? Could you see the shop from the road? Is it easy to get to or is it hidden and out-of-the-way? Pick a place that makes it easy for your customer to come to you.
5. A Commercial Lease
If you’re renting a space for your brick & mortar store, you’ll need to sign a commercial lease. They’re more complicated than residential leases and are typically for a longer term – often 3 or more years. A commercial lease will define what you and the landlord are responsible for in terms of maintenance and upkeep.
Most commercial leases also involve remodeling the space to fit your needs as a new tenant. When you negotiate the lease, you’ll negotiate the terms of these renovations. In many cases, the landlord will have contractors on hand to do that type of work and your lease will be adjusted to reflect the cost. For example, the base rent (with no improvements) might be $10 per square foot, but you’ll pay $11 per square foot over the lease term to cover the cost of the improvements.
A commercial lease can be intimidating, so make sure to ask your realtor any questions you have about the terms of the lease and what they mean for you. Make sure you completely understand it before signing.
As you work on getting a commercial lease, remember the timing. You want to be able to open as quickly as possible once the lease starts so that you’re not paying rent for a store that isn’t open.
Most states require you obtain an Employer Identification Number (EIN) and obtain a sales license for retail stores. This number is necessary for reporting taxes to the IRS. If you have a business bank account, you probably already have an EIN.
If you’re planning to offer a service, such as a hair salon or pet grooming business, you’ll need to obtain the certifications and licenses that your state requires. Check your state’s website for applicable information about the necessary licensure and certifications. In some cases, you may need to take a certification course in order to get approval. For example, you may need to take a course in food safety before you can open a café.
7. Equipment And Supplies
You have your business plan, your financing, your storefront, and your license. Now you need the supplies to actually run your business. You created a budget in your business plan for the equipment you need, so stick to that budget. You may be able to save money by purchasing used equipment or by leasing equipment rather than purchasing it.
In addition to the equipment, you’ll need supplies. This is also in your business plan and you’ve accounted for it in your financing, so all you have to do is stick to the budget.
8. Staff Up
Before you can open your doors, you’ll need a staff. In some cases, you may be able to hold down the fort alone. However, that can be tough if you want to stay open 7 days a week or if you ever get sick or want to travel. You may choose to hire help to spread the workload and make sure everything gets covered. There’s a lot to manage – inventory, bookkeeping, marketing, hiring, and actually interacting with the customers. As always, you’ll need to consult your business plan and budget to determine how many employees you can hire.
You’ll need to report any employees to your state within 20 days of hire. The reporting requirements vary, but in general, it’s information like your employee’s name, address, Social Security number, and your EIN.
Check out the law surrounding employees in your state- the minimum wage, how many hours they can work a week, and whether you need to provide them with benefits.
Once you’ve made your hires, train your employees for their jobs and get ready to open the doors!
9. Spread The Word
There’s one last thing to do before you can open your brick & mortar store for business – you have to let people know about it! You can use word of mouth and your personal social media presence to tell your family and extended network of friends. You may decide to print up flyers or put an ad in the local paper.
You should also start up a digital marketing effort. You can create social media profiles for your business and use them to interact with customers. You may want to start a website – even brick & mortar stores benefit from increased visibility on the web. You can use your digital presence to post ads and share promotions, too.
When you’re getting ready to open, consider making an event out of it. Invite people in the community to come in for your Grand Opening and learn about you and your business.
10. The Grand Opening
You’re ready – your store is set up, your supplies are ready, your employees are trained, and it’s time to open your doors. It takes some legwork to get to this point, but now you’re running your very own brick & mortar store. Congratulations!