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Retail can be an expensive industry to start a business in. In fact, the average startup cost for a retail business is between £20,000 and £100,000. Fortunately, there are cheaper routes into retail. Below are a few more affordable ways to launch a retail startup.
Image by Mohamed Hassan from Pixabay
Launch an online store
An online store can cost a lot less to set up than a brick-and-mortar store. You don’t have to worry about premises rent/mortgage, energy bills, business tax, property insurance, or any of the costs of decorating and maintaining a physical shop. You will have to pour money into your website to make it attractive to customers, as well as spending money on digital marketing. But the overall cost is likely to be a lot cheaper. This guide offers more information on how to start an online business.
Start from a market stall
Starting your business as a market stall could also greatly reduce overheads. The rent of a stall is much less than the rent of a shop. Check whether your local market has any stalls available and fill in any forms that are necessary. This stall could serve as a great springboard to eventually owning a physical store, allowing you to make a name for yourself locally and save up some money for the upfront costs of a store.
Pop-up shops are temporary retail spaces that can allow you to test out your retail ideas without committing straight away to a permanent store. The upfront costs are a lot less, making them a popular option for budding retail entrepreneurs on a budget. You can hunt for local pop-up spaces online – major cities are more likely to have these retail spaces. Industrial spaces are also sometimes used as pop-ups.
Run a one-man shop
Staffing can be a huge cost for many retail outlets. You need to be able to afford wages, benefits, insurance, payroll services, and recruitment costs. If you’re planning to open a small niche store, consider whether you really need to hire employees. Running a one-man shop might be a little stressful if you do get busy and you won’t be able to stay open 24/7, but you’ll save a lot of money, making it more feasible on a budget.
Choose a JIT model
A just-in-time model (also known as a zero stock model) is a business model that involves keeping inventory to a minimum by only ordering new stock as current stock is running out. This can reduce inventory costs, which can be a big expense for some retailers. A drawback of just-in-time inventory management is that it can lead to stockouts more regularly – potentially resulting in lost business – if you leave it too late to order new stock. Such stores typically don’t have any stock in storage and keep everything out on display on the store floor. By using inventory management software, you can accurately keep track of how much stock you have so that you know exactly when to place new orders.
