The Costs Of Starting Up A Shop

clothesEver wanted to run your own shop? Whether it be a retail store or a car dealership, you’re going to need some serious funds behind you. Setting up a shop isn’t easy, although can be very rewarding. Those who want to test their business model may be best off setting up an online business first or starting up a market stall. Of course, you can dive straight into owning a physical store and some products may be more ideal for it. Whatever the case, you’ll need to budget. Here is a list of all the major costs so that you can be fully equipped for a successful start-up.


The first expense you need to budget for is rent. Those with a high street location are likely to be very costly, although will guarantee you more customers. Setting up a shop on the outskirts meanwhile could offer you cheaper rental costs, but ultimately make you lose out on business.

Niche businesses may be able to find creative locations to tap into their market. A sweet shop for example my do well located near a school, even if it is out of the way of the town centre. High-end stores meanwhile may pay more to be in a high-end area, even if the rent is higher here.

If you have the funds you may be able to buy a property. You should shop around for specialist commercial mortgages that can meet your individual needs.


One of the biggest hidden costs of running a shop can be utility usage. This won’t have any noticeable effect until you start running your business – other than an initial utilities security deposit upfront.

Electricity usage will be your biggest cost. If you have signage or exterior lighting this will have to be constantly powered (motion sensitive lighting could save costs at night). Having refrigerators will use up a lot of electricity or gas, something to consider if you’re selling food or drink. You then have to power alarms, tills, heating and air con. Always opt for energy-efficient appliances and insulate of possible in order to cut costs on these expenses.

Location improvement

Unless you’re going very minimalist, you’ll most likely need to spend a lot of money converting the property to your needs. This could involve buying furniture such as counters, display stands, mannequins, bookcases and shelving. You’ll probably want to hire handymen to move in and assemble all of this – although if you’re a dab hand at DIY you can do it yourself.

You aren’t required to supply a toilet to customers unless you sell food and drink. However, you may wish to convert this for customer use. If you’re setting up a clothes shop, you may want to set up an area to be used as a changing room.

In most cases, you will be buying or renting a store that was previously a shop. Converting a domestic property to a commercial property will take extra work including fitting in a bigger window and knocking down wall – something which is not recommended unless you’ve got a lot of money behind you.


If you’re moving from an online business or a market stall, you may already have the stock required and have a clearer idea of what sells well and what doesn’t, cutting costs dramatically in this area. If you’re starting a business from scratch when opening a store, your initial inventory will be much higher. Don’t be afraid to go overboard ordering stock as your opening may be a very busy time, and you’ll need that extra inventory to fall back on.

Other than your products, there will be other miscellaneous costs that you’ll need to account for. These could include hangers for clothes, receipt paper and price labels. Shop online to find cheap solutions to these items.


Property insurance isn’t mandatory, but may be recommended it certain areas with high crime rates or areas prone to weather damage. You don’t want to end up with a flooded store or a broken shop window and not have the finances to repair it.

If you’re employing staff, you’ll have to get employer liability insurance to financially cover any times when employees may be ill or sick. There are other insurance schemes that you can also look into such as public indemnity insurance, product liability insurance and business interruption insurance. You may be able to find a business insurance package that contains multiple schemes, or you may not see the point of paying for such voluntary schemes if the risk is not high.

Digital tech

Everything in business and now becoming digitised and this can be a much bigger expense than most people realise. First and foremost, you’ll need a method of handling transactions which could include a till and card reader. You’ll need a computer for handling stock and accounting and other business related tasks behind the scenes. You may also need a printer and a phone.

Other miscellaneous computer devices may apply to different trades. If you’re selling food items that need to be weighed you may need to visit a site such as where you can buy some digital scales. You may also need a scanner for scanning items, particularly worthwhile if you have a large inventory.

You should also look into ways of securing your shop. A burglar alarm is the most reliable method, but you can also invest in extra security measures such as CCTV. Your computer and till will have to be digitally protected with security software. This will prevent against viruses and hacks (small businesses are more commonly becoming victim to such attacks).

Last but not least, you’ll need special POS software for processing transactions. You should shop around and find the best suited software for your trade. Take advantage of free trials so that you can get to grips with the interface. Accounting software such as QuickBooks is also worthwhile for speeding up your book-keeping.

Signage and branding

Image is very important. Good exterior signage is not cheap but worth shelling out on. You can also buy a board to place outside on the pavement to advertise current deals and promotions.

You may also want to spend some money redecorating the interior of your shop so that it reflects your brand. This will further create a sense of your brand’s identity. If you want to have a uniform, you could even introduce branded t-shirts to further promote your brand.


Now that all the major shop costs are covered, you need to pour money into ensuring people know about you and your store. If you were previously an online business, you may already have a website. If not you should buy a domain name from a site such as and invest in some web designing. You may also want to start a social media page and run a few ads to get people interested in your area.

Physical marketing is just as important for a physical store. Contact your local paper and tell them about your shop and if they’d be willing to run an article. Print off leaflets and business cards that you can post around – ask to put up an advertisement on a council noticeboard or in a newsagents window.

You may want to consider having a coupon or gift card system to lure in more customers, however this could be something you introduce at a later stage. Any marketing stunt you can think of is worthwhile from offering a grand opening event to doing a local radio ad. The more elaborate the more costly, however you’re certain to make more noise in the process and attract more curious customers.


Unless you hope to run a family business or a small boutique store with high-end items, you may want to consider hiring staff to help with busy periods or to prevent you working six hour weeks. Employees can be costly – even the recruitment process may require hiring a recruitment company or advertising on job sites such as

If you don’t expect to be too busy, consider taking people on on a part-time basis first or hiring a temporary staff during periods such as the lead up to Christmas. For busier trades, you’ll need a larger workforce. Over-hire to begin with – as strict as you make the interview process there’ll always be one employee that drops out in the first week and leaves you with a vacancy.

You can use time before your opening to train up staff. This make the first weeks open less stressful as you won’t have to constantly be teaching your employees the ropes alongside getting to grips with your fledgling shop. Consider offering staff incentives that may increase loyalty. This may include discounts on stock, end-of-year bonuses or some form of commission.

You may want to outsource various staff such as cleaners or an accountant. These could save you time, allowing you to focus energy on other areas.

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