Start up costs for a retail business

**KOBrien** · 08-31-2009 06:27 PM

I'm looking into opening a suit/tuxedo store. How much do you think start up costs will be approximately? Thanks for your help.

**myfayt** · 08-31-2009 07:45 PM

You need to do a business plan which will take a few months. That will tell you exactly how much you will need. It can be anywhere from $50,000 to $700,000

**bizdev** · 09-01-2009 10:03 AM

Myfayt is correct about writing a business plan to figure your start up costs. But writing a business plan doesn't have to take months. (See my site below for how-to info.)

The start up costs will include:

build out of location
racking
signage
office equipment
POS system
inventory
supplies
advertising
permits
utilities
merchant account (to accept credit cards)
security deposit
insurance

Then you have your ongoing monthly expenses that include rent, payroll, taxes, utilities, bank fees, insurance. The list goes on and on. You can count on a minumum of $50,000 just to open your doors. Probably closer to $200,000.

**myfayt** · 09-01-2009 11:32 AM

Originally Posted by bizdev

Myfayt is correct about writing a business plan to figure your start up costs. But writing a business plan doesn't have to take months.

Well it depends if you work on it once a week, or many hours every day. Also if you spend 5 hours on it and say its complete, nobody will touch it. Need to check everything and answer all the questions to the full extent. Basically it needs to be solid.

Just my advice.

**ZingerIntl** · 09-01-2009 02:31 PM

Someone on this site should become the resident Business Plan Writer. I paid $2,000 for my business plan and it took him about 40 hours over 4 weeks. More at the start, few revisions at the end. Thats $50 an hour for anyone that knows what they are doing.

I will absolutely pay the money again for another business plan as well. It is def worth it.

**bizdev** · 09-01-2009 03:20 PM

Originally Posted by myfayt

Well it depends if you work on it once a week, or many hours every day. Also if you spend 5 hours on it and say its complete, nobody will touch it. Need to check everything and answer all the questions to the full extent. Basically it needs to be solid.

Just my advice.

It goes without saying it needs to be solid and answer all questions.
It took me 3 wks to write my first business plan. I worked full time at a day job and worked on the plan after work. Yes it took every available hour, but it got done and it was complete. I took it the local SBDC (Small Business Development Center) office for their advice and they said it was ready to go. They were stunned that I had it from scratch without using a canned template. The banks also appreciated that it was not a template and that it was complete. They also loved that it was only about 20 pages long.

Zinger, it may have been worth it to you to pay $2000 to have someone else write it, but I would advise everyone to try it yourself first. It's your baby. You need to be able to defend your conclusions when loan officers start to pick it apart.

Check out my step by step guide below written for inexperienced newbies.

**myfayt** · 09-01-2009 03:56 PM

Originally Posted by bizdev

It goes without saying it needs to be solid and answer all questions.
It took me 3 wks to write my first business plan. I worked full time at a day job and worked on the plan after work. Yes it took every available hour, but it got done and it was complete. I took it the local SBDC (Small Business Development Center) office for their advice and they said it was ready to go. They were stunned that I had it from scratch without using a canned template. The banks also appreciated that it was not a template and that it was complete. They also loved that it was only about 20 pages long.

Zinger, it may have been worth it to you to pay $2000 to have someone else write it, but I would advise everyone to try it yourself first. It's your baby. You need to be able to defend your conclusions when loan officers start to pick it apart.

Check out my step by step guide below written for inexperienced newbies.

Interesting, I am actually writing from a 32 page template. Not sure why I am having such a hard time completing it.

**bizdev** · 09-01-2009 04:07 PM

Originally Posted by myfayt

Interesting, I am actually writing from a 32 page template. Not sure why I am having such a hard time completing it.

What are you having trouble with? (Sorry, didn't mean to hijack the thread.)

**myfayt** · 09-01-2009 06:45 PM

The marketing part really, like what percentage is your market share? and stuff.

**bizdev** · 09-01-2009 10:54 PM

Originally Posted by myfayt

The marketing part really, like what percentage is your market share? and stuff.

Since I didn't know what your business is I went back and read your posts. You've gotten a lot of advice already on how to determine your market share. Since you are still stuck let me ask you if you have gone to your local Small Business Development Center? They are usually housed in local community colleges. Their advice is free and very specific to your needs.

What I can tell you about the business plan itself is don't get stuck trying to come up with hard and fast numbers for the marketing piece. Your financials need to be pretty on target. Certainly your start up costs need to be very detailed and true. Your monthly cash flow projections need to be realistic. But for marketing you don't need to get hung up on specific numbers.

The loan officers and SBC reps that I dealt with all were unanimous in their evaluation of my business plan(s). They were thrilled that I didn't get bogged down with page after page of detail. Concentrate on the financials and the Executive Summary. The Executive Summary is the first thing they read. You need to hook the reader with that first page.

Go to the SBDC if you haven't already.

**myfayt** · 09-02-2009 08:29 AM

I have a local score chapter, but every time I go to them for help, they don't help me. I sit down and am ready for help to create a business plan, and they tell me it isn't their job to do, that I need to finish one and bring it in and they will look at it.

Also two of them have tried to talk me out of a business before, they say there is no market for it, it'd fail, I need to move on to something else.

**bizdev** · 09-02-2009 08:58 AM

Originally Posted by myfayt

I have a local score chapter, but every time I go to them for help, they don't help me. I sit down and am ready for help to create a business plan, and they tell me it isn't their job to do, that I need to finish one and bring it in and they will look at it.

Also two of them have tried to talk me out of a business before, they say there is no market for it, it'd fail, I need to move on to something else.

SCORE is different than SBDC. No, they won't write the plan for you, but I know that's not what you want. You are writing your own, you just need a little more direction. That is what the SBDC does. Try them.

I was also giving your target market more thought. For a retail store offering general merchandise (such as Kmart), your target market is women. Moms. Not the general public. So that narrows down your market share already.