Opening a small retail store or boutique can be a viable way for an entrepreneur with an eye for a good deal to make a living. Small stores must compete with malls, department stores, online ordering, and other boutiques, all potentially vying for the same market, consisting of local residents, tourists, or both. Brick and mortar retail store owners can compete in the space by selecting products – and presenting those products – in such a way that draw in customers and away from other shopping options. Product selection could include unique items that are difficult to find elsewhere in your competitive area. Product selection could also include cheaper substitutes for competitor products. The type of store envisioned in this scenario sells basic, low-cost consumer and household goods, potentially targeting tourists as well.
As with all businesses in Baltimore, there are permits and licenses required, including building permit, use and occupancy permit, and inspections by the fire marshal and building inspector. These permits must be acquired before opening for business, and then they must be maintained while doing business to pass multiple inspections. Preparing the store for business such that it meets regulated standards will be the biggest start-up costs, and may not be factored as monthly operational costs. Please visit the Department of Labor, Licensing and Regulation at http://www.dllr.state.md.us/ for requirements for your business.
The tables below depict the common issues and costs associated with operating a retail store.
Political | Labor laws – ensuring that staff is eligible to work in the US. Maintaining a safe work environment and compensating legally | ||||
Economic | Location of brick and mortar location that is accessible, especially for lunch | ||||
Commodity prices | |||||
Disposable income; tourism | |||||
Social | Competition from both large retailers; fashion | ||||
Competition from other boutique-style retailers; fashion | |||||
Technological | Record keeping, including staff scheduling and inventory management – software and hardware | ||||
Handling money and processing payments | |||||
Advertising online and using social media | |||||
Environmental | Waste disposal | ||||
Sourcing, dependent on products (imports, lead, etc.) | |||||
Legal | Zoning restrictions | ||||
Building permit | |||||
Use & Occupancy permit, including inspection by fire marshal, building inspector | |||||
Water Discharge Permit (sewage) | |||||
Critical Success Factors | Brick and mortar location that is accessible to target market | ||||
Gaining and maintaining all appropriate licenses and permits | |||||
Major Activities | Associated Costs | Cost Driver | |||
Selling goods | Wholesale prices for products | Number of units of products ordered | |||
Ordering and managing inventory | Staff time | Volume of products ordered; number of staff members per hour
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Projected Expenses | |||||
Employee Costs including benefits | Year One Cost per month | ||||
Owner | $ 3,500 | ||||
Book Keeper – Outsourced | $ 800 | ||||
Legal – Outsourced | $ 800 | ||||
Tech Support – Outsourced | $ 250 | ||||
Sales Associates/Register | $ 8,000 | ||||
Wages Subtotal | $ 13,350 | ||||
Taxes, Fees | $ 2,003 | ||||
Subtotal | $ 15,353 | ||||
Supplies/Stock | |||||
Product stock | $ 3,000 | ||||
Cleaning Supplies | $ 50 | ||||
Subtotal | $ 3,050 | ||||
Office/Facility | |||||
Facility Expense (rent) | $ 1,700 | ||||
Electric | $ 300 | ||||
Water | $ 125 | ||||
Internet/Telephone | $ 100 | ||||
Office supplies | $ 50 | ||||
Property Insurance | $ 208 | ||||
Maintenance | $ 500 | ||||
Computers/Hardware | $ 100 | ||||
Subtotal | $ 3,083 | ||||
Marketing Costs | |||||
Web site hosting and advertising | $ 200 | ||||
Web site updates | $ 100 | ||||
Business Cards, Pens, Swag | $ 50 | ||||
Subtotal | $ 350 | ||||
Floor | |||||
Displays/Decorations | $ 3,300 | ||||
Subtotal | $ 3,300 | ||||
Projected Monthly Costs | $ 25,136 |