A hardware store can be a lucrative business for someone who wants to have long-lasting inventory and a quick turnover of products. Because most of the products sold in hardware stores are necessary items for construction, plumbing, and overall maintenance jobs, wholesale black iron pipe and fittings, electrical tools, nails, screws, and lights are a must for contractors and DIYers.
The next big question now is how to start a hardware store. Here is the step-by-step process of beginning your business in hardware sales.
How to Start Your Hardware Store
Pick a brand name or get a franchise
The process starts by deciding on whether to start your own brand or get a franchise. With independent hardware stores, you have lower overhead costs because you do not have to pay franchise fees. You only have to pay for permits, inventory, location, building, and labor. The downside of a personal hardware store is brand identity. Since you will start a new name for your business, people may not flock to your store right away because you still need to build integrity.
If you get a franchise, you incur higher starting expenses. But along with these costs are training, brand name familiarity, and high-quality advice from franchise experts. You will also receive a whole strategic structure of how to manage the business.
Prepare your business plan
Before you start spending money on starting your hardware store, you first have to have a business plan. What is included in the business plan?
1. Customer identification
You need to know who your primary customers are. A start-up business can only cater to a limited number of customers. You also have to maximize your resources by purchasing items with a high turnover rate. The key to a quick return on investment is to know the demographics, needs, and types of customers that you have in your area.
2. Assess your finances
You should know the amount of costs you will have to put up the business. You should know your break-even point. You should also have a monthly projection of your cash flow. This depends mainly on the size of your hardware store.
3. Decide on whether you want to start a shop online or physical shop
It is easier to start a shop online than a physical shop because you do not have to find a location with high foot traffic. But on the contrary, it is more difficult to market your shop online because of the number of competition that you have.
Buy your inventory
You need to understand the flow of your business in terms of stocks. A hardware business with too big of an inventory may suffer in other financial aspects of business. If you have fewer stocks than the demand, you may lose customer loyalty.
With this in mind, you have to find the right supplier that can give competitive retailer pricing. Your wholesale black iron pipe and fittings and other items should have a short order lead time. It is always a good thing for a hardware store if the supplier guarantees priority for your product orders.
Prepare required documents
This step includes all the business and safety permits required to start your hardware store. You should also prepare the necessary bank account that your business needs to manage the flow of cash. You may also look for a good insurance provider to secure inventory, building, and customer claims.
Conclusion
Starting a hardware store takes more than guts and passion. You have to have a balance between critical thinking, strategic management, and foresight. Selling construction tools, doors, cabinets, electrical outlets, and wholesale black iron pipe and fittings can definitely take its toll if not planned right. But if you make the correct decisions and choose the right items to sell, you can create good business out of your hardware store.
