Future business owner in need of some tips

[tj1309]

Hi everyone,

I have been considering opening my first store for the past few years. It's been a dream of mine which has sometimes been a goal I thought I could never reach. I don't normally take too many big risks.

What I am considering doing is opening a retail store in a coastal town of Victoria. I am interested in stocking an eclectic mix of gifts for all age groups sourced from both local artists/creators and antiques/unique items. The town has nothing like this at the moment and my own research has told me that this type of business would work and adapt well into the market place.

Does anyone have any tips for a novice like me? What do I need to know about leasing a shop?

Thank you very much.

[erinna]

Hi TJ,

Welcome to the forum! Excellent to hear your idea and that you've done some preliminary market research.

Which coastal town are you considering? How many potential customers will visit that area (or live in that area) each year? Is it a tourist area?

Personally, this worried me a little bit:

eclectic mix of gifts for all age groups sourced from both local artists/creators and antiques/unique items.

I think you really need to clarify your exact clients, and how you intend on servicing them, so you dont become overwhelmed with options and lose sight. I would personally find it really difficult to be a buyer for your shop, since you dont have any clear guidelines. Will you have $5 snow domes? How about a $500 antique wooden bureau? Local woolen felted mittens?

Even if you narrow it down to:
Parisian inspired items, sensuous scents and textures, with no bold colours.
Or
Locally made items which celebrate vibrancy of colour and light

A range of pricing is good, however a clear vision will help not only the stock sourcing, but will help your ideal clients find you, and your store to create a reputation for its specific and consistent style. I LOVE stores who support independent artists and designers - does the towns nearby region have enough artists to support your store? Or are you willing to expand it to statewide? Australian wide for some special items?

Im sure you have a visual in your head about what you want to create - so I look forward to hearing more about it.

[Kennethti]

In terms of leasing, I would say that before you jump into one, do all of your homework. Pick a location and find out how much foot traffic is going to be there, whether the people there would purchase your products, and what the other stores in the area are doing. You need to figure out what the rental rates are, and how big of a store you need. Figure it out from a cost per square metre perspective.

Finally once you've done your homework, negotiate on price. You also need to consider that rent is just a small component of the costs of renting premises. In NSW, some landlords like to shift things like land tax onto you, or depending on the type of premises (like non-retail act premises), ask that you pay for the costs of preparing the lease. There is also perhaps parking licenses, council rates, water rates, electricity rates and other bills and costs that you have to pay per year.

Once you're all settled out there, go to a solicitor. You've negotiated on price but you need to have a professional double check whether the lease is suitable for you, that the local zoning permits that business, that the lease is all that it says that it is and nothing more.

All in all - do you homework! Good luck!

[tj1309]

Good morning Erinna and Kenneth,

You have both made very good points. In terms of what Erinna said about defining my guidelines, or style so to speak, you hit the nail on the head. Having a defined idea of what I want to offer and who I aim to offer it to is paramount for all of the reasons mentioned. In fact, Erinna's second description "Locally made items which celebrate vibrancy of colour and light" is an ideal description except that I will take the advice to include special items from around the country. That is one fundamental element that I wish to keep having been an independant artist wanting to put my products on shop shelves.

Because I wish to position my store near the beach, I'd like it to have somewhat of a beachy, casual feel. I have visited all of the gift shops in surrounding towns and feel none really have that vibe. They're all quite top shelf, and feel they cater for the 45+ female age bracket. My one concern with my research is that I find that younger people may dismiss my store and head 30 minutes from here to the major shopping centres. On the other hand, I know much of our general population generally choose to spend their money locally for convenience and love for the community. Also, we have a lot of tourists all year round, some who stay for months at a time.

Oh, and Erinna, that quote at the bottom of your post is what I am grappling with at the moment. I am afraid that i'll make a terrible mistake yet at the same time I feel it is time I began to take some risks. I just wish the fear would disappear and I wish I knew more about shop leasing as that is the one component that worries me the most. All of my past work experience has led me to this and I know it is the right choice for me. I just hope I don't make a big mistake.

Kenneth, you too have been helpful. I had briefly read about the extra costs involved and they do concern me. I will have to have a solicitor look over everything which is daunting as I have never been to a solicitor before. I do agree that it would be a smart move to do this so I will have to investigate the costs associated with solicitors too. It is so difficult going in blind and having zero idea on costs involved etc. I have done a peliminary budget but I still feel there is some bits missing.

Thank you both for getting back to me so fast. I will keep you informed to where I am at along the way.

[Hannah at Frenchknot]

Hi TJ,

Have you considered opening an online store in addition to your bricks and mortar one? One of the great benefits of an online store is that you can test various products to find out what types of things will sell. Once you know what is likely to sell you can then potentially stock those items in your physical store.

[daydreamer]

Before spending alot of money and committing yourself to a lease, I suggest you try the concept first on a small scale and see if it works.

You could try selling at a local market, or even try getting permission from the council to set up a stall and sell in public areas, sidewalk, town square, etc?

Or pop-up shops are so hip these days! You could see if there is an empty shop or space within other stores, and try to do a short term deal (a month or two) on renting the space.

[reactive]

Hi tj,

When you get the shop up and running I'd love to drop in and say hi. I'm days away from opening up my small small boutique shop in Vic (it's coastal but it's not our theme) and I'd have to say my biggest concerns so far are moving enough stock to meet lease costs and not getting the weekend off.
I'm already selling but I'd love to network with people with the possibility of sharing sales space in various locations or investment options either way.

[MatthewKeath]

I really hope we get an update from the OP on how the business is going.

Too often people ask for help and ideas and then are never heard from again!

[tj1309]

Oh I am online Matthew. Just taking it all in!

[tj1309]

Thank you every single one of you for stopping by and offering words of advice.

In a word tonight, I feel scared. I know what I want, I'm just so frightened to take the step. I am concerned that I have not taken into account every cost involved and, I wonder if I am capable. On other days I feel unstoppable, ready to take the plunge, spending hours researching online and visiting other similar businesses, looking for stock etc. Having never leased a shop before, I am hesitant to even enquire about premises. I don't want to make a bad decision. I guess that is where a solicitor who specialises in these scenarios comes in. I assume I contact one after I explore the lease options around.

I do like the idea of testing my business before opening a store. Having a market stall could be a good idea, so could a 'pop-up business' which until now I have never even thought about. How would you go about this? It may be the best choice for now. I think the only problem I have with these options is that I imagine this little gift shop that I could operate long term. As I am a teacher it will be a huge change, exactly what I want though (I did work in retail for 4.5 years prior and loved it). However, I guess we all have to crawl before we walk.

In a nutshell, I am stuck. My husband has been completely supportive and tells me just to go for it. I normally am the one telling him that. So this is where I am at right now, procrastinating over the 'what if's'.