High St shop ideas?

[cymtriks]

daemon said:

Opening a high street bricks and mortar retail business with absolutely no previous experience is a fantastic way to make a small fortune - out of a large one.

Getting premises would be well down my to do list if i was starting a business - no 1 would be "having a viable, workable idea".

No shortage of vacant retail units in towns (that should set alarm bells ringing already). The shortage is in viable workable business ideas.

Do you have any stories for us about any of that?

A large fortune that turned into a small one? A viable, workable idea? What went wrong for some of those empty shops?

[Yipper]

We invent the business. You make all the money. Where do I sign up

[vixen1700]

Had a small shop years ago, a cool little boutique place selling unusual jewellery, lighting, canvases, handbags, glass, ceramics and anything we thought was cool.

So many people loved the shop but we couldn't make a go of it and only lasted two years. Think we were too idealistic and overestimated people and their individuality.



Learn to cut keys or something and you may make a go of a small space.

[cymtriks]

From talking to shop owners I'd say that any shop selling items or services that can be ordered online or bought in a local supermarket is going to struggle.

That makes the following better ideas:
Any product or service that cannot be ordered on the internet. This includes a hairdressers, funeral parlour, a coffee shop or an ice-cream shop.
A shop which sells something that supermarkets won't consider such as a local produce deli, a one-off local food like Sally-Lunn's or a Lush.
A product which is part of a show in some way. Fudge kitchen with a massive copper fudge kettle in the window, micro brewery with guided tour.
A local attraction.See the shell grotto or haunted cellar.
Learn or experience something. A cookery school, Driving school, extreme sport, etc.
A therapy or physical class. Karate, yoga, aromatherapy, massage therapy, etc

Most towns probably have a cool local story that could be a money maker. For example Paignton have the Paignton Pudding, adults and kids love the story but can you find a single shop selling one? Nope. If you live in Devon there's an idea, right there.

[northwest monkey]

The "niche" shop is a good idea in the right location. I live in Bacup, and a posh cheese shop would be a daft idea (although I'd love it!), however a couple of miles away in Todmorden it would probably do very well.

A couple of shops near me have just opened up & seem to be doing ok - one is a sort of "shabby chic" type place & the other is a traditional sweet shop (stuff in jars etc).

Like others have said, if it's something people can get in Tesco then forget it.

[hotchy]

Sunbeds and spray tan salon. Even a nail bar. Seem to all be packed up my area.

[daemon]

cymtriks said:

daemon said:

Opening a high street bricks and mortar retail business with absolutely no previous experience is a fantastic way to make a small fortune - out of a large one.

Getting premises would be well down my to do list if i was starting a business - no 1 would be "having a viable, workable idea".

No shortage of vacant retail units in towns (that should set alarm bells ringing already). The shortage is in viable workable business ideas.

Do you have any stories for us about any of that?

A large fortune that turned into a small one? A viable, workable idea? What went wrong for some of those empty shops?

You only have to look at the stats for business startups that fail in the first 2 years.

Add to that no prior business experience, add to that the startup capital requirement for fitting out a shop, advertising, staffing, rates, rent, electric, etc...

Add to that the O/P wants to operate this as a side line so (a) he will require staff who have the same passion for his product that he does and (b) all those overheads (including staffing) have to be costed for BEFORE he turns a penny of profit each month.

And then factor in the trend of people shopping online.

I would need to be extremely sure of my proposal, extremely passionate about my product and extremely experienced in my product area before i'd even consider putting a huge whack of my own hard earned in to a bricks and mortar high street retail business.

Being offered a retail unit then trying to find a business idea to build in to it seems like wholly the wrong approach to me.

[The jiffle king]

Look at the costs for opening a small shop.
Rates
Rent
Staff x 3 (assuming 7 days a week)
Shrinkage (theft)
insurance
water/electric etc

Then the capital costs
- refitting the store
- Stock

Then the length of contract you are tied to
- 5 years and you will be liable when you read the contract

Add these things up and work out how much profit you need to make yearly/weekly. I used to live in Windsor and a shop at the bottom of the high street had rent of 90k and rates of 90k. If I added in the other costs, you needed to clear 250k just to cover costs and that was before cost of goods. Taking this into account, the shop needed to do a million a year ish or 20k a week, 3k a day which few stores could hope to do....... it's now a coffee shop

[daemon]

The jiffle king said:

Add these things up and work out how much profit you need to make yearly/weekly. I used to live in Windsor and a shop at the bottom of the high street had rent of 90k and rates of 90k. If I added in the other costs, you needed to clear 250k just to cover costs and that was before cost of goods. Taking this into account, the shop needed to do a million a year ish or 20k a week, 3k a day which few stores could hope to do....... it's now a coffee shop

That amounts to an awful lot of cheese to be selling.....

[singlecoil]

The jiffle king said:

Look at the costs for opening a small shop.
Rates
Rent
Staff x 3 (assuming 7 days a week)
Shrinkage (theft)
insurance
water/electric etc

Then the capital costs
- refitting the store
- Stock

Then the length of contract you are tied to
- 5 years and you will be liable when you read the contract

The usual lease term for a shop like that will be three years, and if not he will be able to negotiate a break clause.

Assuming the rent is in line with the size, and unless the shop is next door to Harrods there will be no rates. He won't need that many staff, he won't have room for them anyway. How much do you think the stock for a cheese shop will cost? It's right that you should present a pessimistic view but you are overdoing it there.

[ATG]

Petrus1983 said:

Thanks for all the suggestions - but especially to brrapp (and helpful follow ons)! Really seriously my love of cheese is well known! I don't know why I didn't see the potential sooner. The size is perfect, my knowledge is fairly good and the local suppliers are amazing. I'll start seriously looking into this first thing

There's a very small shop in Whitstable on the high street that does exactly this. Lots of visitors, lots of down-from-Londoners, so their passing trade is not typical of most small towns. They market cheeses from Kent plus a few from Sussex only. If you're serious, might be worth dropping in.

[Hoofy]

daemon said:

Splats said:

DSLiverpool said:

Will it have a hilarious name like Cheeses Wept or Cheeses Feed The Little Ones ? Cheeses of Nazareth, i`ll get me coat!

Hahahaha, love it - class

What a friend we have in Cheeses?

Sell artisan bread with the cheese: Cheeses Crust!

[daemon]

singlecoil said:

The jiffle king said:

Look at the costs for opening a small shop.
Rates
Rent
Staff x 3 (assuming 7 days a week)
Shrinkage (theft)
insurance
water/electric etc

Then the capital costs
- refitting the store
- Stock

Then the length of contract you are tied to
- 5 years and you will be liable when you read the contract

The usual lease term for a shop like that will be three years, and if not he will be able to negotiate a break clause.

Assuming the rent is in line with the size, and unless the shop is next door to Harrods there will be no rates. He won't need that many staff, he won't have room for them anyway. How much do you think the stock for a cheese shop will cost? It's right that you should present a pessimistic view but you are overdoing it there.

Got to be a minimum of 2 staff, more if he hopes to open x7 days a week? Thats an easy £3000 a month. Lets say £1,000 a month for rent, so £4,000 so far. Lets allow another £1,000 a month for everything else. So thats £5,000 a month.

Lets assume a gross margin of 33%. So if we sell £20,000 a month, we've £6,500 gross. Then theres VAT to take out of your profit @ 1/6th = £1,083, so we're back down to £5,400. With our £5,000 costs out of that, the O/P will get £400 - before tax.

@ £20,000 a month turnover you're looking at £250,000 a year turnover. Thats an awful lot of cheeses going out the door to (hopefully) make £400 a month?

I'm sure you'll find an "ah but", but the reality is, thats the sort of turnover you'd need to be generating.

[The Moose]

daemon said:

singlecoil said:

The jiffle king said:

Look at the costs for opening a small shop.
Rates
Rent
Staff x 3 (assuming 7 days a week)
Shrinkage (theft)
insurance
water/electric etc

Then the capital costs
- refitting the store
- Stock

Then the length of contract you are tied to
- 5 years and you will be liable when you read the contract

The usual lease term for a shop like that will be three years, and if not he will be able to negotiate a break clause.

Assuming the rent is in line with the size, and unless the shop is next door to Harrods there will be no rates. He won't need that many staff, he won't have room for them anyway. How much do you think the stock for a cheese shop will cost? It's right that you should present a pessimistic view but you are overdoing it there.

Got to be a minimum of 2 staff, more if he hopes to open x7 days a week? Thats an easy £3000 a month. Lets say £1,000 a month for rent, so £4,000 so far. Lets allow another £1,000 a month for everything else. So thats £5,000 a month.

Lets assume a gross margin of 33%. So if we sell £20,000 a month, we've £6,500 gross. Then theres VAT to take out of your profit @ 1/6th = £1,083, so we're back down to £5,400. With our £5,000 costs out of that, the O/P will get £400 - before tax.

@ £20,000 a month turnover you're looking at £250,000 a year turnover. Thats an awful lot of cheeses going out the door to (hopefully) make £400 a month?

I'm sure you'll find an "ah but", but the reality is, thats the sort of turnover you'd need to be generating.

I would expect a gross margin higher than 33%

Cheese Profit Margin

Granted that's from 2012, but I'd expect the numbers to be higher on "artisan" cheese.

[The jiffle king]

daemon said:

Got to be a minimum of 2 staff, more if he hopes to open x7 days a week? Thats an easy £3000 a month. Lets say £1,000 a month for rent, so £4,000 so far. Lets allow another £1,000 a month for everything else. So thats £5,000 a month.

Lets assume a gross margin of 33%. So if we sell £20,000 a month, we've £6,500 gross. Then theres VAT to take out of your profit @ 1/6th = £1,083, so we're back down to £5,400. With our £5,000 costs out of that, the O/P will get £400 - before tax.

@ £20,000 a month turnover you're looking at £250,000 a year turnover. Thats an awful lot of cheeses going out the door to (hopefully) make £400 a month?

I'm sure you'll find an "ah but", but the reality is, thats the sort of turnover you'd need to be generating.

Singlecoil, you're right, I overplayed the figures in my post, but I was trying to make a point about the reality of start up costs and the cost of running a retail store.

The above quote is pretty reasonable in terms of costs, and then it's about the margin of the products. I recall you have a furniture/kitchen? business so you're better versed than I am, but I think people forget about all of the incidentals of retail, particularly in start up. I recall a small show shop in Windsor which had 75k refit costs when they opened.... and then closed 12 weeks later.

I just want to OP to get enough information to properly work out costs of start up and running a store

[singlecoil]

daemon said:

Got to be a minimum of 2 staff, more if he hopes to open x7 days a week? Thats an easy £3000 a month. Lets say £1,000 a month for rent, so £4,000 so far. Lets allow another £1,000 a month for everything else. So thats £5,000 a month.

Lets assume a gross margin of 33%. So if we sell £20,000 a month, we've £6,500 gross. Then theres VAT to take out of your profit @ 1/6th = £1,083, so we're back down to £5,400. With our £5,000 costs out of that, the O/P will get £400 - before tax.

@ £20,000 a month turnover you're looking at £250,000 a year turnover. Thats an awful lot of cheeses going out the door to (hopefully) make £400 a month?

I'm sure you'll find an "ah but", but the reality is, thats the sort of turnover you'd need to be generating.

It's your 'reality' maybe, but I've seen an awful lot of real world examples that show that you are wrong.

You can see for yourself by looking at
http://www.businessesforsale.com/

search for delicatessen in the south east. Some of the listings will require delving in to by registering with the agents listing them but when you've done that you will see that your figures are way off.

I doubt the op will want to open on Sunday btw, unless there is something on to attract people to the area (farmers market for example).

And no VAT on cheese, of course.

[daemon]

The Moose said:

I would expect a gross margin higher than 33%

Cheese Profit Margin

Granted that's from 2012, but I'd expect the numbers to be higher on "artisan" cheese.

Well thats one persons view at the time.

Even IF they are 50%, you're still talking a lot of overheads and a lot of cheese to shift.

PLUS - any amount of online competition...

http://cheesesonline.co.uk/shop/cheese-selections/

https://www.pongcheese.co.uk/

to name just a couple

[Yipper]

Would probably need to sell at least 50,000 pieces of cheese per year to make decent money. Roughly 1,000 a week. Or 150 per day. Every single day and every single week. Day in, day out. A tall order for a little shop.

Ahm oot.

[daemon]

Yipper said:

Would probably need to sell at least 50,000 pieces of cheese per year to make decent money. Roughly 1,000 a week. Or 150 per day. Every single day and every single week. Day in, day out. A tall order for a little shop.

Ahm oot.

And to be done by staff members who have no vested interest in making the business fly, because the O/P is proposing operating this as a sideline.

It "might" work if you're prepared to stand there all day every day and share your passion, enthusiasm and charisma with prospective customers - and "upsell" at every possible opportunity - but with staff who are probably on minimum wage?

[singlecoil]

daemon said:

Yipper said:

Would probably need to sell at least 50,000 pieces of cheese per year to make decent money. Roughly 1,000 a week. Or 150 per day. Every single day and every single week. Day in, day out. A tall order for a little shop.

Ahm oot.

And to be done by staff members who have no vested interest in making the business fly, because the O/P is proposing operating this as a sideline.

It "might" work if you're prepared to stand there all day every day and share your passion, enthusiasm and charisma with prospective customers - and "upsell" at every possible opportunity - but with staff who are probably on minimum wage?

I admire, but not in a good way, your determination to rubbish the cheese shop idea. Have a look at the info I posted, you'll find it illuminating.

Also, same site (which is where virtually every small business that's for sale is listed) try searching for cheese shop and see how many are for sale. That should tell you something.

By all means discourage the op, but get your facts right too.