In the US, there are 13,073 hardware stores, more than 35,000 independent home stores
, and lumber yards, which is more than double the number of McDonald’s. These establishments are a fulfilling enterprise for many, and while there are large chains like Home-Depot or Lowes, some consumers still prefer to go to their local tool spot for their home needs. So if you want to open up your shop, where do you start? Here we’ll break down the steps and give you all the information you need on how to open a hardware store.
The first step to opening a hardware store is creating a business plan
. There are a few critical factors that go into this. You’ll first want to decide between creating an independent company or partnering with a franchise. Building your brand will give you more creative agency as the owner. When you partner with a franchise, you will have an advantage because the brand is already well-known. However, partnering with a franchise can be costly, and you will likely have to pay an up-front fee and royalties.
Once you decide on whether you want to be a franchise or an independent owner, you can begin planning. You’ll want to start by identifying your target market- who will your customers be? This will determine how you set up your space and which products you’ll have on the shelves. You’ll also need to determine your budget and projected income. It is normal for start-ups to lose money for the first several months until they establish a steady consumer base. You’ll want to consider how much money you have to invest and the minimum profit you’ll need to make to keep yourself afloat. Your strategy should also include a marketing approach and picking the right location. The location should be where there isn’t too much competition, which will grab the customer’s attention. For instance, if you live in a small town, the town plaza or shopping center might be a good place for a hardware shop.
Next, you’ll need to apply for permits for your hardware store. There are a couple of steps involved, including registering with your secretary of state, applying for an IRS for an EIN or Employee Identification Number, and opening a business bank account. There also may be local permits specific to your city or state that you’ll need to obtain before opening—research which permits you will need or talk to an attorney for more information.
Next, consider how many employees you want to hire
. You may need more employees as your company grows, but estimating how many employees you’ll need to run the business is critical. Your staffing needs will depend on your space size and your customer traffic. You may need both leadership positions, manager and general team members, to help run the business.
Another critical factor in opening a hardware store is inventory. With inventory, you’ll want to decide which products you want to carry and how much you need. This can change over time, but it is essential to have an initial inventory plan
. It is better to have more merchandise than to underestimate the inventory you require at your store. Understocking can lead to many consumers leaving the store since they cannot get the products they want. To ensure you have the right amount of inventory, look at which products are selling and which are not. This way, you’ll know to order more of the popular items. Owners also need to ensure they have reliable suppliers for their inventory. Establishing lines of credit with suppliers will also make it easier to track transactions that will be on an ongoing basis.
Having a reliable payment system is crucial. With the technology becoming more advanced, having an up-to-date payment system is critical now more than ever. The NRS Point of Sale System can help merchants with the many features it has to offer. Unlike other POS systems, this payment system has advanced software, a customer-facing display, and inventory tracking. The NRS POS ensures a quick and seamless checkout experience for staff and customers, making shopping more enjoyable.
It is essential to remember that the hardware store will most likely need to obtain insurance. In most states, employers are required to have workers’ compensation coverage. The federal government also requires unemployment protection in case employees lose their jobs. And if you have fifty or more employees, you are required to provide health coverage. Aside from the various forms of protection, there are several other options you may want to get as well. Some of these include commercial property, general liability (which may be required depending on the state), and business interruption insurance.
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