List of costs for running a retail store

[burtonj]

I am trying to come up with a comprehensive list of costs to give to a friend who is launching a similar retail business. They have all come from memory for a shop I used to work at.

All listed are yearly costings based on 5 full time and 2 part time staff.

Can anyone add to any here or suggest any I may have missed?

Rent £30k
Business Rates £15k
Wages £75k
Employer National Insurance £5k
Electricity £1.5k
Insurance(Public and Premises) £1k
Water £0.3k
Telecoms (line rental, calls, broadband) £1k
Bin/Cardboard Collection £0.35k
Alarm System(includes security tagging/barrier) £1k
Windows(done weekly) £0.4k
Advertising(local paper 3 times a year) £0.6k
General Supplies/Petty Cash £0.4k
CC Commision(based on £500k turnover) £6.25k
Stationary £0.2k
Fuel Costs £1k
Carrier Bags £0.4k
Banking Fees & Overdraft £0.6k
Repairs to shop/maintence £0.5k
PRS License £0.3k
Lighting £0.25k
PAT Electrical testing £0.2k
EPOS Software Rental £0.35k

Any more??

 

[Deleted member 162294]

employers liability insurance? or is that included in Insurance(public and premises)

 

[midnight_caller2002]

What about PDQ terminal rental... I know you have listed cc commission, also banking fees, can be high if paying a lot of cheques or cash in. The biggest cost - stock..... Along with vat.

 

[PrestonLad]

Some possibles:

75K wage bill seems low for 5 FT + 2 PT staff. Must be absolute bare min pay... and you must be expecting them to cover each others sickness and holidays at no extra cost.

Stock wastage costs - to cover shoplifting and damage.

Does any special shop equipment need servicing?

If it's a full repairing & insuring lease, then it's prudent to budget an amount for annual repairs.

If you're going to the level of detail of PAT testing.... then throw in your fire extinguishers too.

Accountancy fees (and possibly accountancy or other software rental)

If you want a website... costs.

Any costs associated with purchasing stock - other than simple cost of stock? Depends, of course.

 

[Root 66 Woodshop]

Alarm System(includes security tagging/barrier)

If you know someone who can supply & install an alarm system and a security tagging system for £1000 (even if it's based upon £1000 per year) then personally I'd be checking their credentials.

Repairs to shop/maintence £0.5k

A little ambiguous don't you think? What happens if there's a fire... the tenant is responsible for the repairs and general maintenance.

PAT Electrical testing £0.2k

You can reduce that cost by employing someone who is competent enough to do your own PAT testing.

You've also missed

Fire Alarm Installation and maintenance.

Depending on the size of the building, let's say a small retail shop would cost £4000 + then you've got your maintenance contract on top of that as a yearly basis.

 

[dineshkumartec]

You included all, Expect with your retail customer maintenance and sales management.

How to Maintenance the Exist & New Customer details? So please concentrate that point or would use Retail POS Management Software. It is really Helpful to increase your revenue.

 

[herewegoagain.]

Don't forget to factor in the costs of a decent psychotherapist... after having to deal with all of the 'something for nothings', the thieves, the time-wasters, the 'numpties', the general 'scroats' and the good people out there who think they can run it better than you can...

Had a rough day yesterday at the shop... can you tell?

 

[PrestonLad]

BurtonJ?

.... Hello-ooooh.

 

[Philip Hoyle]

Not sure you can heat and light a shop of that size for £1500 pa

Also, the water rates seem very low - I pay more than that for a tiny office - but I suppose it may just cover metered water usage if your waste water & drainage is covered under the lease.

Some other headings look very light, such as bank charges, waste disposal,security, telephony, stationery and alarm/shop maintenance.

What about subscriptions, PRS licence for music, staff training, uniforms?

 

[Talay]

If 5 full time plus 2 part time equals 6 full time then at 40 x 6 x 6.31 x 52 = £79k.

Not sure how you can have all indians and no chiefs ? Surely someone has to be paid more than minimum wage ?

I think you are well short on this.

Also, what about holiday cover ? sickness ? etc.

Another ten plus grand for that.

Maybe need to add another 50% to the staffing cost.

 

[harper101]

Hi burtonj

I think they have mention here what are the other costs needed for a retail business. Anyway, how was the retail store going on?

All I can say now is just to make sure to have workplace safety supplies and equipment. That's it and may all be well for your business.

 

[and_next]

Not sure you can heat and light a shop of that size for £1500 pa

Also, the water rates seem very low - I pay more than that for a tiny office - but I suppose it may just cover metered water usage if your waste water & drainage is covered under the lease.

Some other headings look very light, such as bank charges, waste disposal,security, telephony, stationery and alarm/shop maintenance.

What about subscriptions, PRS licence for music, staff training, uniforms?

 

[and_next]

Waste Disposal......do the council not take care of this?

 

[Mayor]

Waste Disposal......do the council not take care of this?

Yes.

For a fee !

 

[and_next]

Yes.

For a fee !

Is the fee not part of the rates?

 

[kelvin1950]

Is the fee not part of the rates?

Not part of the business rates, no. Only residential properties get free rubbish collection. Businesses pay. That said, if you shop around it needn't be expensive but it's an outgoing all the same.

 

[and_next]

Residential rubbish collection is inlcuded as part of the council tax you mean Thanks, ill inlcude to my list and shop around

 

[10032012]

CC Commision(based on £500k turnover) £6.25k

Why would you include cost of sales such as card processing fees?

 

[Mayor]

Why not ? It is a cost, after all !

£500k turnover on a new start retail is optimistic though...?

 

[10032012]

@Mayor As its a cost you only have to worry about when you actually make a sale. only if not paid in cash! It is not an overhead. You could argue that carrier bags is similar, however, you need them before you make a sale; card processing fees you wont ever have to worry about until you make money. Assuming you have a margin and selling products for a profit, it simply comes out of the items profit.

£500k is about right to be aiming at. I don't know of any convenient stores that do not make this. I cannot really comment as I don't know what sort of retail shop this is, the size of it and whether the 6 FTE staff equates to around 4 a day.

£500k turnover you are looking at roughly around £2000 in sales per day. That is a tall order.

 

[Mayor]

I thought the OP was listing costs, not specifically overheads. I would include bank charges in the cost of sales. When doing cash flow projections in the past I have sometimes found that the cost of sales added onto the overheads can mean the difference between profit and loss when working on a fixed mark-up. We sell a lot of items that are TV advertised, so there is an "expected" selling price, that often leaves us with a much slimmer margin than we need. We have the choice at this point as to whether we up our selling price and be perceived as being expensive, or to run at the lower margin, make the sales. If we don't sell something, it doesn't matter what the margin is - we don't get the money.

I'm no accountant, sometimes the maths surprises me. Especially when it comes to writing down stock etc at the year end - discarding perfectly good stock because it will ultimately save money on tax liabilities makes my head spin !