If you love building things with your hands and have a knack for forming relationships, then knowing how to start a hardware store could make for a lucrative business opportunity. The hardware industry has consolidated quite a bit into large discount chains and franchises, but there is still a place for the local hardware store in every community. Follow these steps and you’ll be able to have a business that you’ll look forward to running every day.
1. Find Your Location
A hardware store needs to have a solid, high traffic location in order to compete in today’s market. The location doesn’t have to be very large, but it will need to be big enough to handle the inventory that you expect to carry. Look for commercially zoned options along main thoroughfares and busy corners to get the best results.
2. Submit Your Paperwork
You’ll need to have a business license, a sales tax collection authorization, and permission to use the business name you plan on operating under to be able to conduct business. This often means having your insurance requirements already in place and the bank accounts for the business created. Some jurisdictions may have additional licensing requirements in addition to those already listed. Make sure your paperwork is properly filled out and submitted so that you can legally conduct business.
There will also be tax paperwork to file. Unless you and your spouse plan to be the only employees of your new hardware store, you’ll need to have an identification number from your taxing authority. You’ll also need a payroll distribution and tax withholding system in place, so outsourcing your HR needs may become necessary.
3. Speak With Vendors
To open a hardware store, you’re going to need some inventory. This is where franchising a new store could be beneficial. Franchises like Do It Best already have vendor relationships in place and branding that is recognizable so that achieving a grand opening can be as simple as stocking the store and promoting it. If you’re working on your own, you’ll need to speak with your region’s hardware distributors, talk with the brand names, and secure inventory orders. This may be a six figure cost.
4. Determine Your Inventory
If you already have 6 stores that sell paint, will you be profitable if your store becomes #7? If the local big box discount stores can’t sell gardening tools, will your more expensive inventory be tempting to the community? You’ll need to survey your community to determine what they’d like to see in your hardware store. This will give you a sense of what will sell so that you’re not stuck with a store full of merchandise and no profits coming your way.
5. Hire Staff and Stock Up
You’ll need to have your inventory on the shelves and your people in place before you open up the doors to your hardware store for the first time. This process generally takes about 3 months to complete. Don’t rush the hiring process because it is important to have good people on-hand that have bought into your vision for the business. Once you have everything from this step in place, you’ll be ready to have your grand opening.
6. Don’t Forget to Promote
Word will get around your community that your new hardware store is opening up. You’ll want to promote your grand opening to make sure that everyone knows when they can start shopping at your place of business. The local hardware store is all about community connections, so consider throwing a huge grand opening event that has giveaways, free food, and something for everyone to enjoy. Families will become the backbone of your community hardware store, so attracting more to your store will bring in extra dollars of profit.
7. Secure a Cash Transfer System
You’ll need to have payment processing equipment in place if you plan to accept credit or debit cards. Some customers will pay in cash, so you’ll need to have a secure method of transferring that cash to your financial institution. In the early days of the business, you might consider doing this yourself. If you’re transporting thousands of dollars every day, however, you may be taking on more personal risk than you might expect.
A friendly hardware store will become part of the heart and soul of a community. Start forming relationships, network with suppliers, and follow these steps and you’ll be on a path toward success in no time at all.