Last updated on April 13th, 2015 at 01:50 pm

For some time my partner has been runnng her own small business by going to craft fairs and selling the odd item or two (as well as selling online) and I knew that in her heart she really wanted to open a shop in our local town, not only to make money but also to inspire children and adults to get involved with crafting rather than sitting playing computer games.

As I am sure you have guessed, the main problem with opening a shop is the costs involved but eventually the money side of things came together and she started the process of opening up.  From talking to other people I gather that this is something that many people will have dreamed about in the past so I thought I’d spend a few minutes detailing some of the things that you would need to think about based on her experience.

I have assumed that you know what kind of thing you want to sell,  in her case it is craft materials and hand made, unique, gifts, including a range of handmade Welsh dragons, but at the same time she decided to run craft workshops and go out to give presentations to groups of people such as youth clubs, WI groups and young farmers (we live in a rural area).

A word of warning here, before you get too excited about opening your shop you need to make sure that you have the right kind of personality to be a shop-keeper.

• Do you have the kind of personality that allows you to greet people with a smile no matter how cruddy you feel?
•  Do you enjoy talking to and meeting new people every day?
• Do you remember people’s faces so that you can greet returning customers with a “welcome back” rather than a “have you been in before”?

Personally, while I can greet people with a smile I’m a little introspective and can’t remember peoples faces and names no matter how hard I try so running a shop may not be the thing for me.

The first thing that you need to think about is where you are going to open your shop.  You need to make sure that there are enough people walking past (usually called “footfall”) to support the business. It doesn’t really matter if your are planning to open a specialist shop, like my partner, that you expect people to travel miles to – you still need people to be passing the shop to increase the visibility, help with improving your takings and maybe even make your shop profitable.

Having identified the area that you want to open the shop in  you need to then find the actual premises and actually check the footfall.  The easiest way to do this is to visit the location and walk the streets, then stand outside any possibilities that you have identified (or sit in the car if there is parking nearby) and basically count the number of people walking past it over the course of 30 minutes or an hour.  You need to do this at various times of the day (and even on different days), it’s no good just standing outside at lunchtime (unless you are opening a sandwich shop or some similar of course), you need to check in the morning and later in the afternoon as well (for example if you are on the route to a local school you may find that you have lots of people walking past both on the way to school and the way home).

Another thing to check is whether there is parking nearby – there are shops in our local town who have a fair number of people walking past but are nowhere near parking and this makes life a little more difficult for them.  In my view an ideal location would be on a main road near a car park with other shops nearby, this would not only mean that you have people driving past and seeing your (hopefully) attractive shop window but also people parking in the car park and walking past your shop to get to the other shops.

Hopefully by then you will have found the right location and even the right shop so it’s time to talk to the landlord (usually via an agent) and find out the cost of the rent, any other costs involved such as having to pay for the rental agreement to be drawn up and any other things that the landlord insists on (for example you may have to insure plate glass windows).

Once you have these basic costs you need to work out the rest of the start-up costs, these can include :-

•  insurance (some you might need to consider are listed on our business insurance page while others might include product liability etc) and the best way to get this is to talk to your local insurance broker (although be aware that some brokers will charge up to 10% of the premium if you want to change any details such as the business address later).  This of course is an ongoing cost as are
  • utilities – you need to get an idea of the costs of electricity, gas and water.  One way to do this is to contact a broker but personally I would suggest looking at the various utility company websites – the reasons for this are detailed on this page about energy brokers
  • another ongoing cost is your accountancy and/or bookkeeping fees, these are often dependent on the type, number and size of the transactions that your accountant will be processing for you  Again, talking to a local  firm of accountants will help you get a feel for the costs involved.  If you don’t know of a local firm then it would be worth asking other local businesses for recommendations or looking on a site such as UK Business Services to find an accountant in your area.
• equipment – you’ll need at least a till, shop shelving, maybe chiller units and/or display units depending on the type of store you are going to open.
• marketing – this can range from simple things like leaflets, advertising in the local press and even include getting the front of the shop sign-written (make sure that you know the rules if you are in a conservation area – your local council would be the best people to talk to about this).
• decorating – you may be moving into a shop that has been empty for some time and unless you are lucky enough to have a landlord that is willing to give the walls etc a fresh coat of paint you will probably want to get this done so need to allow for the cost of a decorator or at the very least a few pots of paint, brushes, masking tape and dust sheets (and it’s surprising how the cost of these simple items can mount up).

You can then enter all of these costs into your business plan and see if you can actually make a living from the shop and whether it’s even worth thinking about buying stock- which of course can cost you thousands of pounds initially, so that you can sell it.

My partner was lucky enough to get some great advice from the Conwy Rural Development team at the local business centre, not only for starting up her business but also on an ongoing basis and if you are lucky enough to live in the area covered by this team we would both suggest you talk to Anna and her team.  Of course, if you live elsewhere in the county then it would be worth seeing if there is a similar team in your area.

I hope that this article about setting up a shop is enough to get you thinking and would love to hear from you if you have started this process and if there is any other subjects you would like covered in this planned series of articles.