Need Advice please on starting small shop

[tango]

Hello all,

my partner and I live in a village with a population of about 4100. A small shop (approx 180 sq ft) has come up for rent and the rent is £50 a week and the rates will be £9.23 a week (we are entiteld to 50% discount on rates as will be a small business.) We are wanting to start a shop selling homeware, hardware, tools, pet food, logs, coal, stationary and seasonal stuff. We've been chatting to people who live in the village for about 8 months now and there used to be a shop selling hardware, tools, electrical, bit n pieces but the old man died and they miss not being able to buy ironing boards, mops, cheap pet food, curtain hooks and the likes.

We would also be offering an internet shopping service for a 5 or 10 % handling fee as many people here don't want to shop online as they don't trust it.

We are also displaying some small hand crafted stoves sale or return (to go with the log, coal etc) and we get commission on any stoves sold. We also have an experienced stove fitter working with us who will pay us commission for every stove fitting job he gets with us.

Our closest competition is about 3 miles away in the next village where they have a hardware/diy store that is well estabilshed. We also have a large town 7 miles away which has B & Q, Poundshops etc. Recently it has gotten very expensive on the public transport (which takes 1 hour on bus and half hour on train) and so we would be serving some of these people.

We worked out if 50 households in the area spent an average £5 a week we would make £13000. Approx £6500 would go back into running costs and the rest on stock. Looks like we won't be earning much of a wage.

This business would not be started with credit. We estimate start up costs to be £2500 for stock, £600 for bond & 1 months rent, £500 for fittings, £100 for sign, hopefully we will get 1 months rent knocked off for the decorating.

We have been running a business for 8 months but work has dried up as people have stopped going out and our business is specialist and hard to change. Our business is still going (just) and we feel running a shop will give us a bit more opportunity at the moment. Neither of us has run a shop before. I have worked part time in several shops and both of us would love to have a shop.

If anyone has any advice please it would be greatly appreciated.

[imageonline]

Will a village population of only 4100 be able to keep a new shop going. Its only 3 miles to an established hardware store. Very risky.
On the plus side you do not need credit. The business you already have that is in decline might be saved , with the right advice. Depending on what kind of business it is, you might be able to run the 2 together and halve your risk.
Sometimes you just have to bite the bullet, follow your gut feeling and go for it.
Suggest you ask this question on the UKBF where more experts will see it.

[jackwilson]

Hi, I think one should think objectively. Why would they come to your store leaving the stores they already go to? I would recommend you to think about it once again and plan something different. Something that could attract the people there.

Jack Wilson

[TmasterMind]

Customers are able to stay in a particular market the main thing that this place remains to have this unique aspect of great service and handling with customers' needs. So, the most important thing to consider is that before starting it over, the product to be marketed should firstly be studied, researched and planned for a long term so that in the future, sustaining the market successfully will be just that easy while facing the challenges because you've prepared your alternatives beforehand.

[lee m44]

you have to use what mean you can to make money inter shopping is a way of keeping money going. marketing your as much as you can. the banks are not much use at the moment. good luck for the new year !

[cjd]

Please don't.

You are making several very common mistakes but the biggest one is thinking that you can make a business in the place you live in by selling things to the other people that live in the same place. ie it's convenient for you.

That's not the way it works - you have it in reverse. Business is about finding something that you think you can sell, then taking it to the place that the most people can see and buy it. It would be rare if that place was where you lived, unless it was London or Manchester etc.

[brain]

sounds risky to me.

the first thing that i would like you to think about before starting a new venture is to analyze what has gone wrong with the one that you are doing right now.

failure is no big deal it only shows you the right path that can lead you to future success. find out the exact cause for your business decline.

start from the very beginning. check out how you planned, then how it went initially and in later stages and then lastly what went wrong. if you will do this analysis then you will be able to find out the exact cause.

after doing that now you can compare your current project with the new one. if you think that you have learned the lessons and are aware of the weak links then there is every possibility that you will not commit that mistake in this venture.

as far as this venture is concerned, my advise would be that you should start with a limited portfolio. don't provide every thing. this will only put financial burden on your project. come up with a list of few things that you believe can be sold in this village. do some research and conduct feasibility analysis. add value to your service in order to satisfy your customers and then slowly increase your portfolio when the time is right.

BEST OF LUCK!

[writecombination]

I don't know where you've got to on this project, given that you posted your enquiry over a month ago.

However, if you've decided to give it a go I'd be interested to know how you get on. I run a business blog and I'm following the fortunes of people who've started businesses despite the recession.

If you've decided to go for it I hope it's going well.

Andrew

[tango]

Thanks for the tips guys,

We opened last week and have smashed our targets (the opening was delayed by a couple of weeks due to cashflow problems, luckily it sorted just in time). Best sellers are pet food & pet stuff, solid fuel and household stuff. We've also sold a couple of stoves and had many stove enquiries so we are buzzing! The villagers love it and keep coming back to buy more stuff, the shop has been getting much busier which suggests word of mouth is spreading well. We are slowly building our portfolio and I will report back in 6 months to let you know how it's going.

So far so good.

I would like to add that there were a few hidden costs we hadn't taken into account (a float for till, stationary materials) and that it took a lot more stock than we initially thought to fill the space. We are lucky in that we got a couple of stove sales in our first week which meant we could invest in stock, since we got more stock people are buying more.

We are very happy with the progress so far.

Thanks again,

Clare

[Indizine]

Clare that's great news to hear, keep up the momentum though, as it is easy to get off to a great tart and then die off, so always advertise when you are busy. Give them discounts and special offers for returning, etc. and try and get an email address so you can let them know if you get in any specific products in which people have been asking about, and so that you have a mailing list to send this to for pormotional purposes too. Not all will use email but for those that do, it's worth a try. Just keep it simple though.

The one thing I wish someobody would set up a website (it's too grand a scale for me!) is to list every major brand shop with all their products and we list our favourite products in our account then, before we go to the shop to buy them, we can check and see if they are in stock. Nowt worse than getting to Boots (your branch) only to find a certain item is out of stock!