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Some who are about to start a dollar store have never been in business previously. They are keenly aware of what their hopes and dreams are for their new business. However, they don’t take the most important steps prior to making a commitment to this new direction. They fail to develop a business plan. They don’t know the real amount of cash required to open and then grow their business over the first year. They haven’t established business goals for their new dollar store business. The bottom line is they are really flying blind. Don’t allow this to happen to you. Read on as I present steps to take before finalizing your decision to open a dollar store. Examine the basic financial requirements associated with starting and operating a dollar store. Once you have decided to move forward with the idea of a dollar store business, the work really begins. Sure, the concept looks good. You’ve always wanted to be your own boss. But don’t ever move forward without taking the time to understand the financial requirements associated with preparing, opening, and then operating a growing business. Take the time to collect the information. Then carefully analyze each detail. Develop a basic list of assumptions about your dollar store business. While many of these may not be exact, they will help set a framework for the projections you establish. Your list could include things such as how much you will be working, the amount you will be taking from the business initially, the number of employees, the size of your store, and more. Develop projections of sales and expenditures for the first year of operation. This starts by establishing a target size for your store, which is on your list of assumptions. After all, the more square feet of actual store space, the more capital it will require to cover all the expenditures. Set your targeted square footage and begin assembling a list of all the costs associated with moving forward. You will be able to find industry information to help establish projected sales for your store as well. Always stay to the conservative side when making your projections. While you may feel it is possible to exceed the results achieved by others, this is not the time to set the bar too high. After all, these are the first-pass numbers that you will use on examining the financial requirements when opening a dollar store. Even more, you can use these to establish goals for the reserves you might need in the future. This activity may not be all the fun. You may not like the outcome. However, doing your best to project accurately the cash required to open a dollar store is a critical piece of data. Knowing what it will take to keep your growing business in operation until you become profitable is also extremely important. The consequences of not projecting accurately your needs will be the stress of desperately working to find more cash for your business. Be sure to consult as well with an accountant, who’s familiar with the industry, to review your numbers before making final decisions. To your dollar store business success! Find out how you can open your own dollar store business.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.
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