When entrepreneurs dream of opening a business, they might picture an attractive storefront and eager customers walking through the door. This dream can become a reality by opening a brick and mortar business. But before signing a lease and planning a grand opening, prospective owners need to be familiar with the specific challenges of brick and mortar businesses.
In the age of e-commerce, it’s easy to see why many independent business owners choose to operate their businesses online. Compared to the cost of opening a retail store in their neighborhood, selling online is more accessible and flexible. But, even selling online carries its own obstacles and restrictions. While a brick and mortar store requires greater investment, there are many unique and fulfilling benefits.
Apart from attracting foot traffic and supplementing online sales, a traditional store is an opportunity to be an active player in one’s community. To ensure success, potential brick and mortar business owners will need to know what to expect and adequately prepare.
How To Open A Store Locally
Although costs vary depending on the business location, size, and startup and operational requirements, it’s recommended that business owners have between $30,000 and $100,000 budgeted before they open their doors. Starting funds will need to cover rent, which will average between $1.75 and $3 per square foot, as well as utilities and maintenance, which can cost around $500 a month.
Licensing, permitting, insurance, and legal costs are likely to be a factor, although the amount will depend on state, local, and market requirements. Any renovations, as well as equipment, furnishings, and decor, will compound costs. This not only includes product displays and basic selling amenities, but point-of-sale systems and accounting and business management software as well.
If employees are needed at the outset, then hiring costs and payroll will need to be accounted for. Inventory and stock will need to be established, which must include more than just the products available for sale, but essentials for store upkeep. And depending on whether the brand is established or not, funds should be set aside to promote the location opening, as well as long-term marketing, including a website, social media management, advertising, and branding.
If this type of capital isn’t available, there are still options. Businesses that operate out of a temporary location, like a popup store or stall, can start up with just a few thousand dollars in initial costs. This can be a good option for new business owners who want to test their offerings in a specific area or marketplace before committing to brick and mortar real estate.
Are Brick And Mortar Businesses Smart Investments?
With so many products for sale online and chain store domination in so many traditional shopping venues, a brick and mortar business may seem like a very risky investment for today’s small business owner. However, there are many reasons to feel optimistic about opening a traditional store. It’s true that online sales have grown substantially over the last few decades, but e-commerce still only accounts for 16 percent of all retail purposes.
The internet does make it possible to connect with customers regardless of location, business hours, and other physical limits, but this also means competition is tougher. Even with all of the convenience of browsing products, comparing deals, and completing a purchase from their tablets and smartphones, the majority of shoppers still rely on a combination of internet retailers and neighborhood businesses to get what they need.
Depending on the products for sale and location, brick and mortar store owners can target markets that might be otherwise difficult to tap online. Niche products, unique brands, and offerings that have special relevance to a community or area can leverage the appeal of a personalized experience that can’t be reproduced by big-box stores. If the resources are available, opening a store and incorporating e-commerce is a smart move for any business that can manage it.
This accommodates the growing number of buyers who prefer to browse a product in-store but complete their purchase online. There are other strategies and resources for furthering the success of a brick and mortar store, but the value of careful research and planning cannot be overstated. Whether a brick and mortar store is smart investment will depend on the creativity, savvy, and knowledge of the entrepreneur.
Article Sources:
https://money.usnews.com
https://www.lightspeedhq.com
https://www.uschamber.com
https://work.chron.com
https://www.fundera.com
