Special Rules for Retail Businesses

April 13, 2006

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If you decide to open a retail business with a storefront (as opposed, for example, to a mail order business), you'll have some special cost considerations that a home-based business won't have. So if you intend to open a retail business with a storefront, keep these extra costs in mind.

Beginning inventory — this is the amount of inventory that you will need to have in place on the first day you open the doors for business. This could be a significant amount, so make sure you get an accurate estimate. Your suppliers, if you know who they will be, should be able to provide you with some help on required inventory levels for your type of business.
Building construction, fixtures, and decorating — if you plan to build or have site improvements, get bids. In the construction industry, it's customary to provide free bids after you have a design drawn up. Unless your expertise is estimating construction costs, do not try to estimate costs yourself.
Cash — include in this the amount of cash you'll need to run the cash register.