How much does it cost to open a shop?
Have you ever dreamt of opening your own shop, showcasing your products to the world, and building a thriving business? It’s an exciting prospect, but before turning that dream into reality, a crucial question arises: How much does it cost to open a shop?
Understanding the financials of a retail business is essential for success. This comprehensive guide will give you a clear picture of the financial commitments and empower to answer the question “How much does it cost to open a shop?” with confidence and prepare your business for a prosperous future.
Rent and business rates
Whether you’re renting or buying, prices will differ wherever you go. Make sure to check out how much you’ll be paying in the town or city you plan on opening. Big cities such as London or Glasgow will often be pricey but are likely to see more footfall.
An alternative is to set up in smaller, up-and-coming cities. Here it may save you some money, allowing you to establish your business earlier as a local favourite while costs are lower.
The most expensive places to rent in the UK
The least expensive places to rent in the UK
| Town/City | Average Price* |
|---|---|
| London | £49.64 |
| Oxford | £49.51 |
| York | £47.75 |
| Cambridge | £46.78 |
| Leeds | £44.88 |
| Chester | £43.14 |
| Milton Keynes | £41.21 |
| St Albans | £38.53 |
| Bath | £37.96 |
| Crawley | £34.72 |
Data from Real Business Rescue
| Town/City | Average Price* |
|---|---|
| Blackpool | £12.45 |
| Rotherham | £12.48 |
| Stoke-on-Trent | £12.91 |
| Hartlepool | £13.09 |
| Telford | £13.23 |
| Blackburn | £13.42 |
| Nuneaton | £15.07 |
| Rochdale | £15.10 |
| Grimsby | £15.30 |
| Halifax | £16.45 |
Those in the UK must also factor in business rates, a significant cost paid to the local council based on a government-calculated amount. How much does it cost to open a shop in terms of business rates? As a rough estimate, expect them to be roughly 50% of the monthly rent. For example, a business paying £3,000 per month in rent could expect an additional £1,500 monthly payment to the local council for business rates.
Utilities & Services
Another cost to factor in is your utilities: how much do you need to spend on electricity, water, or high-speed internet? Read our 5 top tips for saving money on energy.
There’s also the cost of hiring your staff, so make sure you’re aware of how many staff members you intend to take on and what their wages are going to look like.
Remember that running a shop requires various non-inventory essentials. How much does it cost to open a shop when you factor in cleaning supplies, till rolls, and even staff uniforms?
Marketing
Marketing is a crucial aspect of attracting customers to your new shop and significantly impacts its success. This means you’ll likely spend a substantial portion of your budget on advertising and promotion. It’s important to note that the initial stages are often the most marketing-intensive. Research suggests that new businesses should dedicate 12% to 20% of their initial gross revenue to marketing, which can then be adjusted to 6% to 12% as the business becomes established. Understanding how much it costs to open a shop involves not just traditional expenses but also the ongoing investment in building brand awareness and attracting customers.
Looking for the ideal retail property? Check out shops to rent on Completely Retail.