How to Open Your Retail Shop

by | Jun 5, 2018 | Business

As they say, the devil’s in the detail.

Understand the full picture before you sign on the dotted line. Here are some essential points to ponder to help you get the wheels turning as you start down the road to opening your own ice cream, coffee, bakery, or non-dairy shop.

Location

There are basically two types, the Independent Stand-Alone and Mall Space. Each location has it’s advantages and disadvantages, let’s look at a few.

Stand-Alone Shop

Advantage

The stand-alone offers the ability to be more independent with fewer contract restrictions. Other than city code requirements; signage, music, outdoor seating, operating hours, color theme, and products served are your decisions. You are in total control of the look and feel of your business.

Disadvantage

The stand-alone requires you to monitor the amount of foot and car traffic to understand the average passer-by’s per day. How is the visibility? Will the majority of the foot traffic simply walk by? You will need to allocate a budget for marketing and advertising to drive more traffic to your location.

Mall Space Shop

Advantage

The mall generates foot traffic without tenants having to focus on marketing and advertising. The “common area” or food court where customers sit to eat will not require you to maintain. Lighting and security outside of the space are managed by the mall and there are plenty of parking spaces. You have a captured audience all year round, no matter what the weather is outside.

Disadvantage

The mall management will need to approve your sign, products served, operating hours, color scheme, design, and supplier delivery hours. Management may periodically require you to participate in a mall promotion and you may get tired of listening to the same music loop.

With either option, ask yourself what location type will best allow me to expand my operation over the next two to five years?

Negotiating a Lease

Most people consider cost per sf the most important factor when looking at a space, but what comes with it and what is the smart money to spend on a space, that you do not own?

Consider these questions when negotiating a lease for your retail shop.

  • Does it offer adequate, convenient and safe parking, will the landlord pay for signage or handicap accessibility (think ramp or restroom)?
  • Does the location already offer adequate water outlets for sinks, drains, and a fountain?
  • Will the electric service meet your foreseen power demand?
  • Was the space previously a non-food tenant and if so what investment will the landlord contribute to making the space acceptable by the local Health Department?
  • Who is responsible to add or upgrade restroom(s)?
  • Who is responsible to repair the HVAC system?
  • Are there additional costs affiliated with the monthly rent?

Square Foot Requirement

The size of the store typically is measured in square foot (sf) and you’ll need to know a few factors to best understand the total amount your business requires. Calculate sf by multiplying the length and width of “each room” within the total space. Example 12’L x 10’ W = 120 sf then add the total sf of each room. Now ask yourself:

  • Will the space meet your growth goals over the next 2-5 years?
  • Do you want the customers to dine in or carry out or both?
  • Will you be making all of your products?
  • Is off-street parking or outside seating important?
  • Will you encourage the customer to lounge around or eat and leave?
  • Is a party or meeting space necessary?
  • Do you know what triple net suggests?

Start-up Cost

Know what to budget to cover construction, equipment, working capital, and additional cash for “unforeseen situations”.

The cost to build and open a store can range from as little as taking over the lease payments of a sold piece of real estate to hundreds of thousands of dollars to purchase land and build a free-standing location. Starting a retail business in ice cream or other can often be a function of your capacity and willingness to pay for the best address in town or change a design to make a project fit within your budget. You can purchase existing locations for $50,000 or so or pay up to $750,000 to build and design a space the way you need it to look and function.

If considering a franchise, you can spend upwards of $1 million on a free-standing location which the franchise needs to approve. Construction costs tend to fall in the $80 – $175 per sf range, plus equipment. Costs can vary depending on the part of the country you are in. Equipment costs can vary depending on whether new or used (if used is sanctioned). Equipment investment can also vary depending on the items you plan to offer such as soft serve, hard serve, gelato, sorbet, ice cream cakes, vegan, homemade novelties, coffee, bakery and the necessary support equipment such as a walk-in cooler or freezer, hardening freezer and ovens to name a few.

Set-Up, Flow Design & Specific Equipment

The options and requirements are vast and can depend on who is designing the space plus the requirements of the local health dept. Design preferences and recommendations can come from equipment suppliers or architects getting a kickback when equipment is purchased. Darryl’s Ice Cream Solutions, LLC. only works on your behalf and does not represent any outside business interests. So be wise on who you hire, because some may not have the level of detail and knowledge base you will require. Many plans look good on paper but are difficult to actually work in. The trick is understanding a design and effective workflow for both the staff and the customer.

Contact Darryl to get your shop open in a fast, efficient, and effective manner, your wallet and father time will thank you. 

“Nowadays you can’t afford to learn from your own mistakes”. Darryl will save you time and money.

Darryl David
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