Do you want to start a shoe store business and want to know the cost? If YES, here is a cost breakdown to open a shoe shop and the profit margin / ROI.
As the name implies, shoe stores basically retail footwear. Shoe stores primarily purchase footwear from wholesalers and retail them directly to end users – customers. Experts project that the industry will grow at a 2.4 percent annual rate.
Establishments in this industry that have dominant market shares in the united states of America are; Caleres, Design Shoe Warehouse (DSW), Foot Locker Inc., Brown Shoe Company, and Payless Shoes. In combination, they account for roughly 31.7 percent of the revenue generated in the industry.
The shoe retail industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale on a street corner or on a large scale with several outlets in key cities through the United States of America.
Estimated Cost Breakdown to Open Shoes Retail Shop
Interestingly, you may not need to break the bank to open your shoe retail shop because you can actually save up to get it done. When it comes to starting a standard shoe retail store, one is expected to spend the bulk of the startup capital on renting a storage facility.
Aside from that, you are not expected to spend much except for purchasing a wide range of shoes depending on your niche area, paying your employees, and utility bills. These are the key areas where you will spend your startup capital on;
- The total fee for registering a business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the shoe retail shop in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance (general liability, workers’ compensation, and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $35,600.
- The cost for shop remodeling (construction of racks and shelves) for the showroom – $20,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for start-up inventory (stocking with a wide range of different sizes and brands of men’s shoes, women’s shoes, men’s athletic shoes, women’s athletic shoes, children’s shoes, slippers, and other types of shoes such as Hosiery and sports footwear, golf shoes, bowling shoes and cleats et al and other related merchandise) – $60,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,500
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound systems, tables and chairs et al): $4,000.
- The cost of launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $2,000
From the rough estimate as listed above, you would need a minimum of one hundred and eighty – seven thousand, nine hundred and eighty USD ($187,980) to establish a medium–scale but standard shoe retail shop business in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a shoe retail shop to go to the market or directly contact distributors and wholesalers of the types of shoes they want to retail in order to get the real-time wholesale prices of these items.
The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.