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Many who are starting a dollar store are faced with the challenge of finding the perfect location. Finally after many hours of hard work they find a great location. There is only one problem; it is too big for their current funding. So they are faced with several options. First they could just walk away and find a right-sized location. Second they could open the larger space and just keep it under-stocked until profits cover the missing dollar store merchandise inventory. Finally they could partition the location so just the right amount of sales floor space is open to the public. In this article I will examine each of these options. Option #1) Walk away and find a right-sized location. That’s right – you could just walk away and continue your search for the perfect location. After all, every extra square foot of space adds to the month rent or lease payment you make, and when you are starting a dollar store the last thing on your agenda is to spend even one cent extra. On the other hand, don’t underestimate the importance of location. If all other criteria for the location are met, it might be worthwhile to seriously considering the location. Option #2) Open the larger space and just keep it under-stocked until profits cover the missing inventory. This is a strategy some use when first starting a dollar store. However they fail to recognize the importance of having fully stocked shelves and the impact this has on customer retention and total sales levels for their business. These same new business owners are also placing extra pressure on sales and profits when they decide early profits will exist in large enough amounts to support the addition of dollar store merchandise inventory early on. Option #3) Partition the location so just the right amount of sales floor space is open to the public. This popular option works well in the right circumstances. Make sure the wall is quickly and easily moveable so your store can grow as sales mount. Also make sure you are able to afford the extra costs associated with your rent or lease payment. And of course, there needs to be a plan of action for added dollar store merchandise, store fixtures and other costs to expand into the space. Each of the options covered offers pros and cons. Carefully examine your specific needs and your finances if you face this type of challenge. If you start with an over-sized store make sure you are able to carry the extra costs should you fail to achieve sales and profits to warrant expansion. Don’t underestimate the costs associated with dollar store merchandise and fixtures when you are ready to grow into the extra space. Consult with your accountant to verify your assumptions and financial projections. To your success when starting a dollar store! 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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