Opening a store - drafting business case

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rogeroleary

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A friend is considering a change of career. He wants to get away from the multinational game and is consider opening a store (possibly ina shopping centre). He's in the process of putting together a business case and was looking at the major issues to address (see below).... just wondering if there's anything else that he's missing:

  • Leasehold
  • Insurance
  • Fit out
  • Stock
  • Wage cost
  • Ongoing heat & light
Any other suggestions welcomed as this is an important move for him and he is afraid of getting a major surprise :eek:

Thanks
Roger
 
Not quite sure what you're asking here: all the points raised are on the cost side. To make a business case, presumably he might want to look at getting some revenue in? for example, projected sales figures? how will they be generated? competitive advantages?
 
Cashflow
Customers
Sales

The other items are just details
 
The most important thing is; is there enough demand for the product/service at a price point that will allow your friend to cover his costs and make a decent profit?

You need to do up a proper business plan, cash flow forecast and undertake some market research.

The decision to open a store should be based on sound business planning not on some romantic notion of how life might be as a shop keeper. You need to look at some scenarios to prepare yourself as much as possible for challenges you might face.

What happens if you sign a lease for a store, never get enough customers and have to close? You could then be liable for the lease.

What if you got so busy that you had to take on staff and they then failed to show up, how would you cope?

Would your family be happy with you working 7 days a week 12 hours a day for at least a year to get the business going properly, or whatever it takes?

Can you afford to take a reduced income while you are getting set up? What would you live on if the business never made any money? Do you have the skills to easily go back to employment if needed?

The point is your friend needs to take off the rose tinted spectacles and ask yourself the hard questions.

Good luck!
 
rogeroleary said:
A friend is considering a change of career. He wants to get away from the multinational game and is consider opening a store (possibly ina shopping centre). He's in the process of putting together a business case and was looking at the major issues to address (see below).... just wondering if there's anything else that he's missing:
  • Leasehold
  • Insurance
  • Fit out
  • Stock
  • Wage cost
  • Ongoing heat & light
Any other suggestions welcomed as this is an important move for him and he is afraid of getting a major surprise :eek:

Thanks
Roger
Click to expand...

As well as own insurance you may have to pay a proportion of the overall insurance for the centre itself.
Also rates to the local council and refuse charges.Also accountancy fees
 
Hi Roger, some other things he might want to factor into his spreadsheet of costs if applicable to his particular business:

advertising
any loan repayment (and interest)
phone
rent of car parking space(s)
audit/accountant fees
shopping centre service charge
security/alarm monitoring
bank fees
rates
water charges
cleaning
computer maintenance/software
packaging/bags for customer purchases
 
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