New Business

[cschin4]

I filed to incorporate a new business. I am planning to get into a business selling health products. I have some background in this and believe it is a viable business for me to get into at this time. I have no debt and funds available to get started. I am now looking for a location.
So, my next step would be to find wholesalers to obtain the products I would like to stock. How would I go about this? And, I also need to consider how I want to set this up, what things I want to emphasize, the type of store environment, etc. I am not a newbie and have set up 2 successful businesses previously in a different area. So, I have deal with incorporating, dealing with taxes, insurance, workman's comp, etc. Any advice on proceeding?

[jmjj215]

So you're setting up a brick & mortar store?

[cschin4]

Yes. I am planning to look at a building. Not sure if I should buy the building or rent. I would prefer to rent. But, there is a pretty nice building downtown. But, it would need some work, especially painting. I would have to hire a contractor to do that. But, from the outside it would be attractive, it has metered parking out in front, etc. Obviously this is a big decision.
And, I don't know how to find wholesalers. Do I just look around for the products I want? I do have alot of products in mind and some services that I plan to offer.

[jmjj215]

Before you look at a building, or anything like that, you should make sure you have some wholesaler relationships. Without them, there's really not much going!

[George23]

Business Insurance

Also budget out a monthly expense report for liability insurance, offices expenses, etc. so that you can get an idea of what kind or rent payment you can afford.

[boefixepa]

You need to create a business plan, a very detailed one. Look at the costs as far as needed insurances, need employees, benifits if desired, hard start up costs, reaccuring costs etc. Working for a small business has really opened my eyes to all of the 'unknown' costs that most people would not think of. Talk to other small business in the area, and your city, county, and state agencies. Did you know we have to pay a tax on all of our office equipment, and list it in detail (I mean desks, cars, computers etc) every year. I guess it's not enough to just pay sales tax when you buy it!

Once your figure up your hard costs that you will only have to pay once, make sure you have enough up front cash. (Getting the builing repaired, the shelves installed, the office stuff etc.

Once you figure out your reaccuring costs, your rent, utility, taxes, monthly bills, employee liablilties, licenses, taxes, yearly bills etc. Then you will know how much you NEED to make in profit a month to be viable. You need to determine how many months of this you want to have on hand, but if you are starting out I'd say have at least 6 months of this sitting in the bank. That's just me, it's up to you, but you want to start out being able to pay your bills.

Now figure out how much you have to sell and at what markup to be able to make that profit. That's the ticket! Go to a smillar store in another location (hopefully a few hours a way.) Make it as similar as possible to the one you want to open. Get a comfy chair or get comfy in you car and count the number of people who walk out of the store carrying something - meaning they purchased something! Do that for as many days as you possibilly can. Take that daily average and divide by the sales you already determined you needed....that will tell you if the business is viable.

If a similar store's patronage means each customer has to spend and AVERAGE higher then you think is reasonable (look at how much a customer comes out with) then you make need to rethink things. If the average customer only has to spend $40.00. Then you have a good chance, take the leap, you know you have six months to get that average where it needs to be. Keep good records of the number of customers you get and the average purchase and you will be able to see where you fall.

This may seem extensive, but the more research and homework and planning you do the more likely you are to have realistic expectations and you may know when and when not to proceed.

They made us do this kind of research in college and it amazed me at all the hidden costs I never considered.

Whatever you do, good luck.

[George23]

Business Insurance

They made us do this kind of research in college and it amazed me at all the hidden costs I never considered.

I agree, the more detailed you can be the better. There are always a lot of little costs that spring up from insurance to post it notes.