Start-up costs for a retail business

Start-up costsStart-up costs
Start-up costsStart-up costs


Start-up costs for a retail business

Retail is a booming industry and will likely always be. People love spending their money on useful (and useless) products every single day. From food to electronics, clothes, kitchen accessories, home décor items, toys and more. There’s a market for “stuff” and if you have a product that is uniquely generic or convenient, all you need is to start-up your retail store.

It might seem easier said than done when you consider the start-up costs of a retail business. But if you manage and market it correctly, there will be a return on investment (ROI) and small business funding is there to help you get started.

You might be a potential retail store owner or a current online retailer who’s looking for a brick-and-mortar installation of their online business. So in this case, you will need to be aware of the costs and then find a lender where you can apply for business funding and financing in order to turn your vision into a reality.


Store space

The first, obvious, expense is that of finding, buying or renting a store space. This is not a once-off expense unless you’re paying in cash which is unlikely. You will either require funding for small businesses in order to cover the cost of the store space or you will be renting. Either way, there will be a monthly expense that needs to be added to your business plan and store budget.

The initial cost, however, is also something you’ll need to finance for as you’re usually asked to pay a few months’ rent upfront to secure the location. And once you own the store space, you will need to pay for maintenance and the utilities that go with it.



Starting a business will require a specific license to sell, permits for tax purposes and certificates amongst other official documents. These will legalise the retail business you intend on running and are, therefore, a compulsory expense.  



You need a consistent supply of inventory stock if you're going to keep your customers returning to your store. When you open your doors, your store needs to be packed with products, fully stocked and have spares immediately available in the storage rooms. And that is a large expense where startup business funding would be able to help.

Make sure you’re getting the best deals with your suppliers and negotiate where you can. You’re about to get into a long-term relationship with them once your store opens and you need to be happy from the beginning. Your inventory will be the most crucial and consistent expense for your store. But don’t worry, it’s also the inventory you sell that will see an ROI in your business and help you to pay off any business financing.


Furniture and fixtures

It’s all good and well to have a retail space, a license to sell and inventory in-stock. But if you aren’t able to make your store comfortable, beautiful and practical in terms of displaying your inventory, it’s not going to be successful.

You’ll likely need everything from seating, counters, shelves, display racks, lighting, mirrors, storage cupboards, desks and more. It will all depend on the type of retail store you have, but you can budget for a large furniture and fixtures invoice when first setting up shop.  


POS software

You’ll make your stocktaking, sales and inventory list tasks difficult without a quality point of sales (POS) software helping you out. It will make payments quick and easy for your customers (who are all about convenience) and it will make store operation tasks easier for management and staff.

With the right POS software and systems in place, it will be smooth sailing in your store. There are even systems that provide reports to assist with the next call for inventory or with staff member sales statistics.



Speaking of staff, that is another startup expense for a retail store. Even if your retail store is small, you won’t be able to successfully run it on your own without having to inconvenience your customers when you need to step out or work admin in the back, for example. In your business plan, map out the responsibilities that would need to be covered and start out with a small staff and grow the numbers only if necessary. It’s a bit of a guessing game but as you start operating, it will be easier to deduce what is needed.

The start-up costs for many businesses are rather high because you’re starting with nothing. But you will work it all back eventually, pay off your debts and be able to reinvest your profits back into the store to make it better. Go to where you need to apply for business funding and make sure you are able to start with everything you possibly need. It will definitely be worth it in the end.

Start-up costs