Starting a brick and mortar business can be an exciting and rewarding experience, but it’s important to be aware of the costs involved before taking the leap. From leasing a storefront to stocking inventory, there are a variety of expenses that can add up quickly.
Rent: One of the biggest costs associated with starting a brick and mortar business is rent. The cost of leasing a storefront can vary greatly depending on the location, size, and type of property. On average, small businesses can expect to pay around $20 to $30 per square foot, per year for a commercial lease. For a 1,500 square foot storefront, that translates to $30,000 to $45,000 per year.
Build-out and remodeling: In addition to rent, you’ll need to factor in the cost of building out your space and making it suitable for your business. This can include everything from painting and flooring, to electrical and plumbing work. The cost of this work can vary greatly depending on the scope of the project and the materials used, but it’s not uncommon for small businesses to spend $50,000 to $100,000 on build-out and remodeling.
Inventory: Another significant cost associated with starting a brick and mortar business is inventory. Whether you’re selling products or services, you’ll need to invest in stock and materials to keep your business running. The cost of inventory can vary depending on the type of business you’re starting, but it’s not uncommon for small businesses to spend $50,000 to $100,000 on inventory in the first year.
Equipment and furniture: In addition to inventory, you’ll also need to invest in equipment and furniture for your business. This can include everything from cash registers and point-of-sale systems, to desks, chairs, and display cases. The cost of equipment and furniture can vary depending on the type of business you’re starting, but it’s not uncommon for small businesses to spend $20,000 to $30,000 on this type of equipment.
Marketing and advertising: Starting a new business means you need to get the word out and attract new customers. This means marketing and advertising expenses. The cost of marketing and advertising can vary depending on the type of business you’re starting, but it’s not uncommon for small businesses to spend $10,000 to $20,000 on marketing and advertising in the first year.
Insurance: As with any business, it’s important to have insurance to protect your assets and your employees. The cost of insurance can vary depending on the type of business you’re starting, but it’s not uncommon for small businesses to spend $5,000 to $10,000 on insurance in the first year.
Legal and accounting fees: There are a lot of legal and accounting requirements that come with starting a business, and it’s important to have professionals help you navigate them. The cost of legal and accounting fees can vary depending on the type of business you’re starting, but it’s not uncommon for small businesses to spend $2,000 to $5,000 on legal and accounting fees in the first year.
Starting a brick and mortar business is a big investment, but it can also be a rewarding one. By understanding the costs involved and planning accordingly, you can set yourself up for success.