How to open a shop and start a retail business

Do you dream of opening a shop of your own? Our guide to starting a retail business will teach you everything you need to know.

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Written and reviewed by:
Robyn Summers-Emler Grow Online Editor

There are many avenues you can take when starting your own business. And if opening your own shop is the dream for you, then you’re in the right place.

It’s no secret that online shopping and ecommerce dominate the retail sector, especially considering the number of high-street shop closures over the last few years. However, that doesn’t mean setting up a physical store isn’t completely off the cards. 

After all, 46% of Millennial shoppers are making weekly trips to the shops, while 66% of Gen Z consumers prefer physical experiences when shopping, particularly for fashion and beauty-related products.

So, it’s not all doom and gloom, but the question now is where do you even begin to open your own bricks-and-mortar space? In this article, we’ll guide you through the essential steps for setting up your retail business, from conducting market research and getting funding to hiring staff and promoting your store.

What does the retail sector look like today?

Right now, the UK’s high street is a mixed bag. Department stores have seen a sharp 85% decline over the past decade. Meanwhile, more than 13,000 high street shops closed in 2024 – a 28% increase from the previous year.

That being said, point of sale (POS) provider SumUp reported in a study that despite the frequent news of store closures, the high street isn’t dying – it’s simply evolving to meet new customer needs and demands. 

The study also revealed that telecommunication equipment stores were the highest-growing industry on the high street, with a 44.4% increase between 2020 and 2024. Games and toy stores followed with a 44% increase, while clothing markets and stalls saw an upturn of 26.5%.

How to open a shop: step by step

There’s a lot to consider when opening your own shop. From choosing the perfect location to getting your store stocked and keeping up with legalities, there’s a lot involved. 

So, we’re going to guide you through everything you need to do to open your retail store, helping you stay on track and set yourself up for success. Whether you’re opening a small shop or planning something bigger, these steps will make the process a little easier.

1. Write a retail business plan

A strong business plan is one of the most important documents you’ll need. It should clearly outline your idea, marketing strategy, funding and costs, as well as a development plan for your products or services.

However, while a business plan is important for keeping you on track, it shouldn’t be completely rigid. The nature of planning a business is that there will be peaks and troughs, meaning your plan should be realistic and not based on speculation.

Here’s what your own business plan should include:

  • Executive summary: an introduction to your business and key points you will address.
  • Business analysis: explain the condition of the market, state your competitors and detail how your business is going to position itself.
  • Marketing strategy: how are you going to attract your target market? Put together a strong marketing plan and discuss the channels you’ll use (e.g. social media marketing).
  • Products and/or services: detail what products you’ll stock, or what services you’ll provide. Make sure to explain how they set your business apart from other stores.
  • Management plan: discuss the relevant human resources for your business, such as staff benefits, employment policies and recruitment process.
  • Financial plan: make sure to include profit and loss statements, sales and cash flow forecasts, a breakeven analysis and capital requirements.
  • Appendix: a place for any additional documents and data representation that gives the reader a better feel for your business.

2. Conduct market research

Next, you need to start on market research. This involves collecting important information about your target audience, the market you want to enter and your competitors. 

To conduct market research effectively, you’ll need to:

  • Define your target market: identify and learn about your target audience, such as their age, location, pain points and shopping habits. For example, if you want to target young and ethically-conscious individuals, you’ll need to know what their interests are and the type of places they like to shop (e.g. independent stores).
Pro tip: learning about your target market

If you’re stuck on researching your target audience, here are some methods that can help you get started:

  • Starting discussions/conversations on social media and web forums, such as Reddit
  • Signing up for a survey website, or surveying people on the high street
  • Setting up a focus group – make sure to advertise this on social media and give people an incentive to show up (e.g. gift cards, product samples, cash, etc.)

  • Analyse your competitors: this involves identifying and researching your competitors to understand their strengths and weaknesses. You should also look into their pricing strategies, marketing tactics and product positioning. This will help you determine potential gaps in the market, as well as create strategies that’ll help you stay ahead of the competition.
  • Conduct primary research: primary research is what you’ll need to do to collect data directly, rather than relying on existing data. There are several methods you can take with this, including interviews, questionnaires, surveys and focus groups.
  • Conduct secondary research: this is where you’ll need to analyse data that has already been collected, such as trend reports, sales data and market statistics.

3. Acquire funding

Setting up shop will require a significant amount of funding, and unless you’ve saved up enough money on your own, you’ll likely need to raise capital to get started. Luckily, there are many financial sources available to help fund your business. These include:

  • Business and/or bank loans: a common source of capital that can help businesses cover expenses, such as purchasing equipment, hiring staff or expanding inventory. The length of a business loan can either be short term or long term, depending on the type of loan, lender and your business’s needs.
  • Credit cards: a quick and easy way to access short term finance. Business credit cards can be used to purchase inventory, store equipment and packaging supplies. Much like a personal credit card, you’ll be expected to pay the full amount back, usually with interest.
  • Angel investors: a single investor who looks for opportunities in businesses they believe are viable. Angel investors provide upfront capital to support the business and its growth in exchange for equity in the company, meaning you’ll have to give up ownership and share some of the profits you make.
  • Venture capital: an investment fund made up of contributions from wealthy individuals or companies. A venture capital fund is beneficial for getting large sums of money without having to pay it back, while also receiving expert guidance and advice. However, they may also demand significant ownership and have active participation in major business decisions, such as approving budgets or deciding on an exit strategy.
  • Crowdfunding: a popular way for businesses to raise funds by asking a large number of people to contribute small amounts of money, such as through GoFundMe or Kickstarter. While crowdfunding is a good way to reach potential customers and investors, there’s no guarantee that your business will reach its funding goals.

4. Decide on branding, concept and design

Branding is effectively the common thread that ties together how you represent your business, including your name, logo, interior design, website, social media and your tone of voice when communicating with customers.

Your brand should communicate your business’s personality, represent your target audience’s preferences, as well as promise quality and a positive customer experience.

Building your brand

Branding isn’t all about a fancy logo or a witty slogan. Rather, it’s something that should represent your company’s core values, personality and mission statement. Effective branding is a good way to boost your reputation and distinguish yourself from competitors.

To brand your business effectively, you’ll need to:

  • Choose a business name: your business name should be easy to remember and relevant to your brand. It should also be easy to spell and pronounce, and shouldn’t be too similar to competitors or another company. Deciding this can be tough, but some strategies can help you out, such as word dumps, playing on famous idioms, combining words or using synonyms.
  • Determine your core values: these are the principles that guide a company’s behaviours, decisions and actions. For branding, you should communicate your core values through all means of communication (e.g. social media and your website), as this will influence how customers feel about your brand.
  • Write your mission statement: this is a brief description of your business’s purpose, goals and principles. A good mission statement can help customers feel emotionally connected with a company, in turn making them more likely to make repeat purchases in the future.
  • Build a value proposition: a value proposition is a statement that explains the benefits of your products/services to your target audience, detailing why it’s worth buying and how it’s better than competitors. You should also highlight how your business brings value to your customers, rather than just focusing on features and benefits.
  • Develop your tone of voice (TOV): this is the way your brand will communicate with customers through words, style and tone, so it’s important to choose a TOV that accurately represents your brand and will resonate with your target audience. For example, if you’re aiming to attract a younger audience, it’s best to adopt one that’s casual, conversational and also playful at times.

Designing your brand

This is where you can get creative. Your primary design assets include your logo, colour palette and font. Design is important because it’ll help customers recognise your brand and differentiate it from competitors.

First, you should decide the best colours for your brand. Colour psychology is important to note here, as it helps you influence how people feel and react. For example, warm colours like red, yellow and orange are considered to invoke a range of different emotions, such as comfort or anger and hostility. On the other hand, cool colours like blue, purple and green are often correlated with sadness or indifference.

Symbolic colour meanings

According to an article by 99 Designs, these are the emotions and characteristics often associated with popular colours.

  • Red: love, passion, anger
  • Orange: creativity, youth and enthusiasm
  • Yellow: happiness, hope and spontaneity
  • Green: nature, growth and harmony
  • Blue: calm, trust and intelligence
  • Purple: luxury, mystery and spirituality
  • Pink: playfulness, fun and youthful
  • Brown: wholesomeness, warmth and honesty
  • White: simplicity and minimalism
  • Black: power, elegance and sophistication
  • Grey: professionalism, formality and conventionality
  • Gold, silver and other metallics: wealth, prosperity and success

Your colour choice ultimately comes down to your brand’s personality and core values. 

For example, if your values are around sustainability and integrity, then green or brown may be the best choices to go for. On the other hand, if your principles include boldness and determination, red and orange may be the best match for you.

Next, you need to design your logo. It’s important to keep it simple and easy to recognise but can also stand out from competitors. Here’s a quick rundown of what makes a good logo, and pitfalls you should avoid.

Logo do's
  • Keep it simple
  • Make it scalable
  • Choose the right colours
  • Use the right font
  • Make it original
Logo don'ts
  • Overcomplicate the design
  • Make it too generic
  • Rely solely on trends
  • Use poor contrast
  • Have too many fonts or colours

Once you’ve drafted up your logo, now you need to decide on the font you want to use. Fonts help create a consistent brand identity. It can be difficult to decide which typeface is right for your brand. However, a good practice is to brainstorm words that relate to your brand’s identity. 

For example, if your brand identity is whimsical and eccentric, script fonts like Lobster and Lucida may be the best fit for you. However, if your brand leans more towards a modern identity, you may want to choose a sans-serif typeface like Helvetica, Arial or Calibri.

5. Create a website

Once upon a time, creating a retail website would have been a daunting and expensive task. But now, thanks to website builders, you can create attractive, professional-looking websites quickly, easily and at a cheaper price. The only costs you’ll need to consider are your domain name and a monthly hosting fee.

Websites are essential to the modern-day retail experience, even if you’re not running a fully-fledged ecommerce business. Customers may see your shop when they’re out and about, but if you don’t have any kind of online presence, there’ll be little to no brand awareness for your business.

To help you get started, make sure to read our guide on the best website builders for small businesses.

What should your website include?

When setting up your retail website, whether you’ll sell online or not, you should include:

  • On-brand content that presents your values in your tone of voice
  • High-quality pictures of your products and stores, plus images that portray your value 
  • Your location and contact details
  • The option to share your website on social media

6. Find a shop premises

Choosing a good location for your shop is crucial for attracting customers to your store. If you’re difficult to find or located in an area with low footfall, you won’t likely get many customers through your doors.

Here are a few ways to find the best location for your business:

Research local towns or city boroughs

Different areas have different demographics, so the best way to determine a suitable location is to look at the supply and demand for your product or service in a specific area. Here are a few practices you can use:

  • Research the age, income levels, interests and other characteristics of people in the area to see if they match your target audience.
  • Look at foot traffic and pay attention to how many people walk or drive by potential spots and whether the area is easy to get to. Make sure you’ve spent a lot of time in the area, both at different times of the day and on different days of the week.
  • Conduct surveys or interviews with locals to understand their needs and preferences.
  • Look at online activity trends in potential locations to see what people are searching for, talking about, or buying in that area. This can help you spot popular interests and gaps in the market.
  • Meet with a local estate professional who knows the area well to get insights on property availability, pricing and which locations might work best for your business.

Find your competitors

Find areas where businesses similar to yours have settled. Is there a particular street where fashion lovers shop, or a corner of the shopping centre where hungry shoppers know they’ll find a bakery? 

It may seem counterproductive to open near your competitors, but if they’re already attracting your ideal customers, you’ll want to be nearby – effectively benefitting from their marketing efforts.

Consider the costs

Certain areas, such as the high street, will be busier, which means they’ll likely be more expensive too. Paying extra may well be worth it to gain access to more customers, but if you decide it’s not, you can:

  • Look up “up and coming” areas in your town. These are often cheaper than the established areas of interest, but may well see their fair share of trendsetters.
  • Consider community marketing. Even if you’re in a quieter area, connecting with the local community through events, partnerships and promotions can help draw people to your location.
  • Speak with landlords to see if you can secure a better deal, especially in areas where spaces have been vacant for a while.

Check out available properties

Unfortunately, you can’t launch on your dream street if there’s no free space available, so keep this in mind while exploring potential locations. Luckily, there are many ways to find other spaces, including:

  • Online real estate platforms like Rightmove, Zoola and Loopnet allow you to search for commercial properties available for rent or sale in your area.
  • Local estate agents who specialise in commercial properties and have access to listings that may not be widely advertised.
  • Local business meetups or chamber of commerce events. These are a good way for you to hear about available spaces or upcoming vacancies through word of mouth.
  • Visiting neighbourhoods of interest and looking for “For Rent” or “For Sale” signs. You might even find properties that aren’t listed online.
  • Local community groups on platforms like Facebook or LinkedIn. Members often post about available properties or share recommendations.
  • Local councils or development offices. Some councils maintain lists of available properties or areas targeted for development that could suit your needs.
Do you need a brick-and-mortar store?

Running a physical store may be an exciting venture, but costs are often high. So before committing to it, you should ask yourself:

  • Do I need a physical location to serve my customers, or can my business operate entirely online?
  • Will the added visibility and customer access of a store outweigh the expenses?
  • Is there a demand for my product or service in the area where I want to open?
  • Can I afford rent, utilities and other operating costs without risking financial stability?

Remember, you can run a successful retail business solely online, which can save on overhead costs and allow you to reach a broader audience. With a strong ecommerce presence and good digital marketing practices, you can still build a thriving business without the need for a physical storefront.

7. Choose the right equipment and utilities

Once you’ve decided on a premises, you’ll need to kit out your shop with all the necessary equipment. Here’s what you’ll need to purchase:

Tills and retail POS systems

Tills and retail POS (point of sale) systems are a must, especially as the number of debit card payments is expected to increase by 46% by 2027.

A reliable POS system allows you to track sales, handle payments efficiently and keep accurate records for accounting and reporting. It also helps to reduce errors and speed up the checkout process. Investing in a good system can save time, improve organisation and increase operational efficiency in your store.

To help you get started, make sure to check out our guide on the best free POS systems for small businesses, so you can choose the right one without breaking the bank.

Store utilities

This includes water, gas electricity, internet, landline and insurance.

Choosing the right utilities starts with understanding your specific needs. Consider factors like the size of your space, the type of products/services you’re offering and how much energy your store will consume. For example, if you have refrigeration or high-tech equipment, you’ll need to ensure your electricity provider can accommodate those demands.

Next, compare utility providers to find the best rates and services for your business. Look at electricity, water, gas and internet options in your area and check for flexible plans or discounts. Opting for energy-efficient equipment and utilities can help you save money in the long run while keeping your operations running smoothly.

Furniture and equipment suppliers

To make things simpler, you can sign up for a service that provides everything you need to set up your store in one place. Companies like Display Centre, Morplan and Equipashop provide bespoke fittings, mannequins, POS equipment, cash registers, tagging guns and more.

Alternatively, to save a little money, you could try buying your equipment second-hand. Doing this can work out a lot cheaper, but make sure not to compromise on quality. Check for wear and tear, test functionality and make sure the equipment is still in good working condition to avoid future costs or safety issues.

8. Understand rules and regulations

When you run a retail store, one of the first things you’ll need to do is register your business and make sure you’re following the necessary rules and regulations. Staying on top of these regulations will help you operate smoothly, stay compliant and build trust with your customers. Here’s a breakdown of the key regulations you need to know.

Health and safety

The Health and Safety at Work Act 1974 requires employers to protect employees and customers from risks in the store. This includes ensuring fire safety, safe equipment use, proper lighting, first aid provisions and a safe shopping environment. Additionally, the Regulatory Reform (Fire Safety) Order 2005 mandates fire safety measures in non-domestic properties.

Consumer protection

The Consumer Rights Act 2015 ensures that customers have clear rights when shopping, including the right to return faulty products, receive refunds and get repairs or replacements. Retailers must also provide clear, accurate product information and pricing.

Data protection and privacy

Under the General Data Protection Regulation (GDPR) and the Data Protection Act 2018, retail stores must safeguard customer data and ensure privacy. This includes getting consent for data collection, securely storing information and informing customers of their data rights.

Employment laws

The Employment Rights Act 1996 and other related legislation set out employees’ rights, including protection against unfair dismissal, rights to paid leave, minimum wage regulations (under the National Minimum Wage Act 1998) and holiday entitlements. Retailers must also follow working hour regulations under the Working Time Regulations 1998.

Tax and accounting regulations

Retailers must register for value-added tax (VAT) and comply with VAT regulations if their annual taxable turnover exceeds the threshold of £90,000. Accurate accounting records must be kept, and VAT returns, payroll taxes and corporation tax must be submitted on time.

Pro tip: VAT schemes

To pay VAT, there are several schemes retail businesses can use. This includes:

  • Point of Sale Scheme: you identify and record the VAT at the time of sale
  • Apportionment Scheme: you buy goods for resale
  • Direct Calculation Scheme: you make a small proportion of sales at one VAT rate, and the majority at another rate.

You can find out more about VAT schemes on the government website.

Licensing and permits

Depending on the products being sold, you may need specific licenses. For example, to sell alcohol, tobacco or lottery tickets, you need to apply for the relevant licence from the local council. You’ll also need to follow the Licensing Act 2003 for any activities that require a licence.

Advertising and marketing rules

The Advertising Standards Authority (ASA) enforces rules around misleading advertising and ensures that ads are truthful and not deceptive. The Consumer Protection from Unfair Trading Regulations 2008 also ensure that customers are not misled by false or unfair advertising.

Environmental regulations

Retailers must comply with environmental laws under the Environmental Protection Act 1990 and Waste Electrical and Electronic Equipment (WEEE) Regulations regarding waste disposal and recycling. Stores are also encouraged to reduce packaging waste under the Packaging Waste Regulations 2007.

9. Start recruiting staff

At first, you may not have the funds to hire staff right away, and you may be happy to hold down the fort on your own.

However, when you do come to employ staff, you should hire people who not only share your vision but can work hard to deliver it too.

Finding the right staff for your business can make a huge difference in its success. Some effective ways to find the right staff include:

  • Job boards and websites: post job openings on popular job boards like Indeed, LinkedIn or Monster. These platforms allow you to reach a large pool of potential candidates and filter through CVs to find the best fit.
  • Recruitment agencies: reach out to local recruitment agencies to help you find qualified candidates. They often have access to a broader network and can assist with the hiring process.
  • Social media: platforms like LinkedIn, Facebook and even Instagram can be great tools for attracting candidates, especially if your store has a strong social media presence. Posting job ads on these channels can also help you tap into passive job seekers who may not actively be looking.
  • Employee referrals: ask friends or acquaintances to refer others for open positions. Employee referrals often result in higher-quality candidates who are more likely to fit well with your store’s organisational culture.
  • Local community networks: for a more traditional route, you can advertise in local newspapers or community centres to find people who live nearby and may be looking for retail work.
  • Job fairs: attend local job fairs to meet potential candidates in person. These events are a great way to quickly assess candidates and connect with people interested in working for your business.
  • Your store’s website: don’t forget to use your own website to post job openings. This ensures that candidates who are already interested in your business can apply directly.

10. Find retail suppliers

Finding reliable suppliers is essential for keeping your inventory stocked with quality products. Here are several ways to find suppliers:

  • Online marketplaces and directories: websites like Alibaba, Made-in-China or ThomasNet provide access to thousands of suppliers, from manufacturers to wholesalers. You can search by product category, compare prices and check supplier ratings.
  • Industry trade shows: attending trade shows and expos related to your industry can be a good way to meet suppliers face-to-face, see their products first-hand and build relationships.
  • Networking: start networking to meet other business owners, especially those in similar industries, to get recommendations. Suppliers often thrive on word-of-mouth referrals, and established businesses can give you valuable insights about their experiences with different supplies.
  • B2B platforms: platforms like TradeIndia and Global Sources help connect you with manufacturers and suppliers globally. They often include supplier reviews, product specifications and pricing details to help you make an informed decision.
  • Supplier search engines: think of this like a supplier version of Google. Tools like Kompass and Europage can help you find suppliers worldwide – allowing you to search by industry, product or location.
  • Local suppliers and manufacturers: if you prefer to keep it local, you can search through business directories or industry-specific websites to find local suppliers. Working locally can also reduce shipping costs and lead times.
  • Direct contact: if you already know the brand or manufacturer you want to work with, reach out to them directly to inquire about becoming a retailer or distributor. Most manufacturers have programmes that’ll let you access their products at wholesale prices.

11. Promote your business

Finally, you’ll need to promote your retail business. Nowadays, you don’t have to fork out for a billboard or a spot in your local newspaper. Thanks to the power of digital marketing, there are many ways to reach your target audience without breaking the bank. 

Here are some of the best ways to market your business, along with tools that can help you:

Social media marketing

Social media is a great way to connect with your customers, show off your products and share promotions. It lets you build a relationship with your audience by interacting with them, responding to comments and keeping them updated on what’s new. It’s a casual, easy way to stay in touch with your target audience and keep them coming back.

Tools to use: Hootsuite or Buffer to help schedule and manage your posts across multiple platforms and Canva for designing eye-catching graphics for posts, ads and promotions.

Cost: Hootsuite costs up to £249 per month depending on your chosen plan. Buffer is free and allows you to connect up to three channels, but costs up to $10 (approximately £8.09) per month to unlock more features. Canva is also available for free but costs up to £13 per month for more premium content.

Email marketing

Email marketing helps you stay connected with your customers, letting you inform them about new products, upcoming sales or special promotions. It’s a direct way to reach your audience, and you can personalise your messages to make them feel valued. Plus, with automated follow-up emails, you can keep the conversation going even when you’re not actively sending messages.

Tools to use: Mailchimp, Klaviyo, Omnisend for creating, automating and tracking your email campaigns.

Cost: Mailchimp offers a 14-day free trial for the first 500 contacts, but then costs from £16.54 per month, depending on the size of your email list. Klaviyo is free but costs up to $60 (approximately £48.57) per month for more features. Omnisend is also free but costs up to £41.30 per month for its professional plan.

Search engine optimisation (SEO)

Search engine optimisation (SEO) will help your website rank higher on search engines like Google, making it easier for customers to find you. If your site ranks well, you’ll attract more organic traffic without spending money on ads. To do this, you’ll need to optimise your website’s content and use certain keywords to appear on the search engine results page (SERPs) when people are looking for products or services like yours.

Tools to use: Google Analytics to track your traffic and SEMrush or Ahrefs to find keywords to use on your website.

Cost: Google Analytics is free to use. SEMrush offers a 7-day free trial but costs up to $499 (£404.25) per month for a paid plan. The cost to use Ahrefs starts from €119 (approximately £100.55) per month.

Paid advertising

Paid ads on Google and social media allow you to target specific groups of people based on interests or demographics. It’s a fast way to drive traffic to your website and build brand awareness. Whether you’re running search ads or display ads, you can track how well they perform and make adjustments in real time. However, keep in mind that the cost can add up quickly, so you should set a clear budget and monitor your return on investment (ROI) to ensure you’re getting the most value for your spending.

Tools to use: Google Ads for creating and managing ads on Google search and display networks and Facebook Ads Manager for running ads on Facebook and Instagram.

Cost: the cost of Google Ads depends on various factors, such as competition, placement and relevance. For Facebook, this depends on your ad budget, audience size, ad format and industry competitiveness.

Traditional marketing

If you have the budget for it, traditional methods like flyers, posters and radio ads can still be an effective way to promote your retail business, especially in local or community-based marketing. It’s a good way to catch people’s attention and remind them about your business when they see your ad around town.

Tools to use: Vistaprint or Canva for creating print materials like flyers and banners.

Cost: the cost of products from Vistaprint depends on the type of item, customisation options and order quantity.

How much does it cost to run a retail business?

Running a retail business can involve a variety of costs, which vary widely depending on your store’s size, location and type of business. Here are some common expenses you can expect:

1. Renting/leasing

Rent is often the largest monthly expense for a retail store, with prices depending on the location and size of the space. High-traffic areas, like city centres or shopping malls, will be more expensive. 

Renting costs can range from a few hundred to several thousand pounds per month. According to research by Real Business Rescue, London was reported to be the most expensive location to set up shop, with an average price of £49.64 per square foot per year. Oxford followed closely at £49.51, while York’s average price was £47.75.

On the other hand, Basildon was reported to have the cheapest renting prices, with an average of £23.23 per square foot per year. Norwich and Rayleigh also had cheap costs at £23.59 and £23.71, respectively.

2. Utilities

Utilities like electricity, water, heating and internet can add up. Expect to pay anywhere from £200 to £500 per month, depending on your store size and location.

Unsurprisingly, London was reported to have the highest energy costs, according to Uswitch. The gas unit rate per kWh is 6.41p, while the gas daily standing charge is £31.99. Additionally, the electricity unit rate per kWh is £26.06.

As for the areas with the cheapest utility costs, the East Midlands and Southern Scotland have some of the lowest energy costs on average. East Midlands has the cheapest gas unit rate per kWh at 6.19p, followed closely by Southern Scotland at 6.25p.

3. Insurance

Retail businesses need insurance to protect themselves against risks like theft, fire or liability claims. Typical policies include public liability insurance, contents insurance and business interruption insurance.

As for the cost, this depends on various factors, including the amount of cover, location, number of employees, annual turnover and claims history. Typically, this can range from £300 to over £1,000 annually.

4. Inventory and stock

The cost of stocking your store will depend on your product range and how much stock you plan to keep. 

For example, a business with fast-moving inventory might spend £1,000 to £5,000 per month on restocking, whereas others with slower turnover may spend less frequently.

  • Initial stock costs: you’ll need to make an upfront investment to fill your shelves or stock your warehouse. The cost will depend on the size of your business and the type of stock you have.
  • Ongoing restocking costs: these are a recurring expense that depends on sales volume and turnover. This can increase if you need to boost stock purchases during peak seasons, like holidays or special events.
  • Supplier agreements: wholesale suppliers often offer lower prices when you buy in bulk, but this could mean a higher upfront cost. 

5. Equipment and fixtures

Essential equipment like tills, retail POS systems, shelving, displaying units and furniture are needed to set up your store. Costs can vary, but for a small retail space, you might spend anywhere from £1,000 to over £10,000. 

For example, basic shelving and display racks might be more affordable, while custom-built or high-end fixtures can quickly increase your costs. Additionally, specialised equipment may be needed based on the type of products you sell. For instance:

  • Mannequins, garment racks and fitting rooms for clothing stores
  • Refrigeration units or freezers for food retailers
  • Security features like locked displays and alarms for electronic shops

6. Staff wages

If you hire employees, wages will be a significant ongoing expense. The minimum wage in the UK varies depending on age and whether employees are apprentices, but you should budget for at least £20,000-£25,000 annually per full-time staff member, including benefits and taxes. Part-time employees will cost less, but you’ll still need to account for National Insurance Contributions (NICs), pension contributions and other costs. 

Costs can also increase depending on location and other factors. For example, if you’re based in London or another major city, retail staff may require higher wages to match the cost of living. Moreover, offering overtime or bonuses can further increase payroll expenses.

7. Marketing and advertising

Marketing costs can vary depending on your strategy. Social media ads, local promotions and online marketing may cost anywhere from £100 to over £2,000 per month, depending on how much you invest in advertising.

For example, a small business might start with a £5-£10 daily budget for Facebook ads, while larger campaigns for Google Ads can push costs higher. 

Beyond advertising, there are other marketing expenses to consider as well, such as:

  • Content creation: professional product photography, video production or graphic design work may cost you around £50-£500+ per project.
  • Promotional materials: flyers, posters or in-store signage might cost an additional £50-£500+ per campaign.

8. Business rates

If your property is in a non-residential location, you’ll need to pay business rates

The cost for this will depend on the size of your property and the rateable value. However, small businesses may qualify for Small Business Rates Relief (SBRR), which can significantly reduce or even eliminate the cost if your property’s rateable value is below the threshold (£15,000 in England).

It’s worth checking with your local council of the Valuation Office Agency (VOA) to confirm your property’s rateable value and whether you qualify for any exemptions or reliefs.

9. Software and POS systems

Retail businesses need software for inventory management, accounting and sales tracking. Retail POS systems, like Square or Shopify, can cost anywhere from £30 to £70 per month depending on the pricing plan you choose.

Additionally, you may also need separate software for accounting, such as QuickBooks or Xero, which can cost around £10-£60 per month, depending on the plan and features. Inventory management software can range from £50-£200 per month, especially if you’re using more sophisticated systems that integrate with other tools.

Conclusion

No doubt opening a shop is going to take a lot of hard work and commitment. It might feel daunting, but taking it one step at a time can make it both manageable and rewarding. From planning and securing the right location to stocking your shelves and marketing your business, each stage brings you closer to turning your vision into reality.

But remember – success doesn’t happen overnight, so be patient, adaptable and willing to learn along the way. With the right preparation and a clear focus, you’ll be ready to welcome customers and build a thriving business.

Written by:
With over 3 years expertise in Fintech, Emily has first hand experience of both startup culture and creating a diverse range of creative and technical content. As Startups Writer, her news articles and topical pieces cover the small business landscape and keep our SME audience up to date on everything they need to know.
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