Opening a Shop

[Toon]

Hi all

My business has been going for around 18 months now and I feel it's time to move onto the next step. I'm currently working for home and have a great deal of stock scattered in my spare room. I'm currently looking into opening a small unit. I will get the smallest one going to start off with and will go from there. The ones I have seen are going for around £3500 pa for a small size (sorry don't have measurements with me atm). I believe that having a unit will allow local people to come and view products and hopefully any expenses I occur will be paid for by people who come and visit.

My question is, what kind of startup and ongoing monthly costs should I expect and how much will I be paying? The unit has already been refurbished apparantly (going to see some next week) and the rent includes building insurance.

I realise that they'll be Rent, Electricity, Water, Phone, Internet, Contents insurance, council tax and epos fees which all equate to an estimated £500 pm. I also realise that startup costs will involve furniture, computers, epos setup fees (I only currently have an internet merchant account), security (cctv, alarms etc), signs, stationary and tills etc which will be around £1600 (my own personal estimates without looking into prices etc).

Is there anything I have missed and are my estimates too low/high?

FYI, the unit will be in the north east. Is there anyone with a small unit that could offer advice and tell me what their expenditure is etc?

 

[SillyJokes]

If you have a unit you may find that having people coming round to shop is a pain.

They go through all your stock and put it back in the wrong places, nothing is priced so you have to look it all up, they use up all your time and then leave without buying much, they might even pinch stuff if you don't keep an eye on them.

I absolutely loath it when people come to the office to buy stuff, I'm just not set up for that and you might want to consider this too.

I can't comment on your costs.

You might want to forcast growth forward so that you don't find yourself having to move to a bigger unit too quickly - that is a direct cost you should try and avoid incurring too often.

 

[RogerRoger]

Good luck.

 

[movietub]

I was in the very same situation 3 years ago!

Having a unit was the next logical step. Most importantly it allowed us to hold more stock, and people are always more likely to buy online if they know its in stock.

Whatever rent they are asking is probably very negotiable. Take a drive round the area and figure out what proportion of the units are currently empty - if its 1/10 or more, then 6 months half rent is very realistic. Not all landlords will agree, but you won't speak to many until you find one that will.

Regards the other costings, to be honest, figures that small only deserve so much accuracy. Until you start the process, and inevitably start changing your mind about a few things, you really can't know the full extent of the cost. So you figure on £1600 setup? I say so long as you could scrape £2500 if you needed to then you are fairly safe to procede.

I certainly agree with your theory that on-going expenses will be met by walk in custom. Our first unit realy was just a stock room with a till, we made very little effort at traditional retail! We simply stuck a huge great sign outside that advertised what we sold, and that we sold it all at website prices. People found us, and then word got around and, as we were the cheapest for at least 50 miles (web site prices in a retail shop tend to do that) we grew faster, and faster.

You need £500 pcm to meet the additional costs. £500 net profit on sales for any shop, no matter how weak an effort initially, is really not very much.

Taking the same moved propelled our website forwards and, for the reasons above, never cost us a penny really. Now we have a very big, very tidy shop packed with customers and we still only charge the same prices as our very competitive website!

Best of luck. Moving forwards is scary, but standing still is pointless!

 

[movietub]

If you have a unit you may find that having people coming round to shop is a pain.

They go through all your stock and put it back in the wrong places, nothing is priced so you have to look it all up, they use up all your time and then leave without buying much, they might even pinch stuff if you don't keep an eye on them.

The worst part of retail is indeed, the customers. Each month more and more of them wander in...

Buggers

 

[VJT]

Hi,
I'm in a very similar position to you and am in the process of setting up my first shop. Something that I have been told by the local council is that if the rateable value of the unit is less than £7,000 you only pay 50% of the rates and from 1st of Oct - 30th Sept 2011 you could be exempt from paying any business rates.

You may already know this but its worth checking out with the council
Good luck,

Vicky

 

[deniser]

Getting a unit to expand your stock range is good. Letting people walk in is not necessarily good.

I agree with Silly Jokes. Customers walking in can set you back depending on how many you get.

Our product is labour intensive to sell so an hour spent with a customer who may or may not buy is equivalent to packing 20-30 parcels.

If we had lots of walk in customers it wouldn't matter because we could employ someone to look after them but there aren't enough and when they do come they come at once in large groups causing havoc. When we used to be open as a shop we got lots of shoplifters too.

It depends what you sell of course.

The other problem is opening hours. Now we don't let people visit we can come and go as we please. It gets frustrating when you are in a quiet period but have to sit there all day just because someone may walk in.

If you are happy to be there all the time anyway and your online business is quiet so that people walking in don't distract you from what you are doing then go for it.

 

[sysops]

Given that the OP is from 2005, it would be interesting to know what he did in the end.

 

[movietub]

Given that the OP is from 2005, it would be interesting to know what he did in the end.

How the hell did this get started again! Ah well... well spotted