For the purpose of this article, we will write about the cost of starting an electrical store business. Over and above, you should budget the sum of $150,000 to start an electrical store business.
Please note that a large chunk of your start-up capital will be spent on rent and stocking your store. The rest of the startup capital will be spent on paying your staff, training, registering the business, paying utility bills and marketing and advertising.
If you are planning to start an electrical business, then you must have a clear cut idea of the type of electrical business, you want to start. This is because an electrical business could be an electrical contractor business or an electrical store where electrical gadgets and electronics are sold.
Factors That Influence the Cost of Starting an Electrical Store Business
As previously stated, there are numerous variables that can affect the cost of starting an electrical store business and they are as follows:
The Size of the Electrical Store Business
The size of the electrical store business is what will determine the cost of starting the business. If you plan to build an electrical store business that is as big as 20 by 40 feet, then you should be ready to budget approximately $60,000 for the business. The idea is that, the bigger the electrical store business you have in mind, the higher you are expected to spend on rent.
The Choice of Location
You will agree that when it comes to starting any business, your choice of location will affect the overall cost of opening the business. An electrical store business will thrive in bigger cities and you will agree that bigger cities attract higher rent.
The only reason why you will expect to spend less is if you decide to move to the outskirts of the city. In essence, the choice of location you choose will to a large extent influence the overall cost of starting the business.
The Required Licenses and Permits
Without first obtaining the necessary licenses and permits, it is illegal to operate a business like an electrical store business in the United States. Of course, you’d require a business license, a zoning permit, and a sign permit, among other things.
Also have it in mind that you may need to pass multiple inspections before you can get your licenses and permits. This will cost you money also.
The Type of Facility
Regarding the store, you can choose between renting, leasing or constructing your own electrical store business space. There is a limit to how far you can go when renting or leasing a facility, and it will depend on what the landlord of the facility wants.
You may need to modify the facility to fit into what you have in mind for your electrical store business facility. If you wish to build your own electrical store, you will purchase the land or property, develop your design, and build and furnish the electrical store.
Note that your expenses will be far higher than someone who leases or rents a facility. This will definitely have a significant impact on your electrical store startup costs.
5. The Cost for Stocking the Store
The cost of stocking the electrical store is yet another major area where you are expected to spend your startup capital. You should be ready to buy different types and brands of fittings, electrical switches, wires & cables, boxes & enclosures, distribution switchgear, electrical doorbells, light bulbs,
electrical tools, explosion proof enclosures, circuit breakers, electrical connectors, electrical box, lugs, motor control, and other electrical accessories. Trust me, purchasing all these items will cost you money and it will greatly influence the cost of starting your electrical store business.
6. Branding and Marketing the Electrical Store Business
Another important component that will impact the overall cost of opening an electrical store business is the marketing, branding, and promotion of the business. You must be prepared to spend money on proper marketing, branding, and advertising, if you want to take a fair portion of the market in your community.
It is not cheap to hire a branding, promotion, and marketing specialist that will aid you in competing with brands that are already dictating the market direction of the electrical store business in your location. As a result, hiring a branding and marketing specialist will undoubtedly raise the price of starting an electrical store business.
7. The Cost of Purchasing Insurance
The cost of purchasing insurance policy coverage is another important factor that will have an impact on the overall cost of starting your electrical store business. Your electrical store business could be in danger if you don’t have the necessary insurance to protect against potential risks.
You will need to budget for the following insurance coverage for your electrical store business:
- Commercial general liability insurance can protect you from property damage or personal injury.
- Property and content insurance will protect your company’s assets, such as machinery and equipment.
- Small business auto insurance will shield your company vehicles from injuries to third parties.
8. The Cost for Registering the Business
To operate your electrical store business, you are required to register the business. The process of registering a business in the United States is simple and straightforward but it will cost you money.
In essence, if you are planning to start an electrical store business, you must have a budget for registering the business. Depending on the state, forming a business in the United States of America might cost anywhere from $600 and $1400.
9. Cost of Recruiting and Training Your Staff
If you want to get it right with this business, then you must make training of your staff a key priority hence there should be a budget for it.
The whole essence of training and re-training of employees is for them to stand out among your competitors. As a matter of fact, if you want your team to always deliver, then you must have a robust budget for recruiting and training your staff.
9. The Cost for the Purchase and Customizing of Uniforms
If you have visited an electrical store business before, you will notice that staff of the organization put on uniforms. This is done for two distinct reasons. One is for proper identification and two for branding the business. Indeed, if you want people to place a premium on your brand, then you must be willing to spend money on branding.
The money you will spend on the purchase and customizing of the uniforms will add up to the overall cost of starting your electrical store business.
10. The Cost of the Grand Opening of the Electrical Store Business
Lastly, another factor that will influence the overall cost of starting an electrical store business is the cost of organizing an open party. The truth is that, for an electrical store business, you cannot afford not to organize an opening party.
The fact that people in your community are your major target makes organizing an opening party a good marketing strategy. You may not have to spend much on your opening day. All you need to do is just to make snacks and drinks available and of course, let the music play on.
Although, the cost listed above are some of the basic costs you are expected to spend if you are planning to start an electrical store business, it is important to note that your taste, the environment you choose to open the business, in and of course, other factors not listed here will greatly influence the overall cost of starting an electrical store business.