How much does it cost to open a retail store (free calculator)


Opening a retail store is an exciting time, but for new business owners it is uncharted or just plain terrifying territory. Most of this anxiety stems from knowing how much it actually costs to start a retail store from scratch.

Chelsea Sloan, Franchise Founder and Store Operator of Uptown Cheapskate, a consignment store that buys and sells second-hand designer clothes for up to 90% off retail prices, has done it not once. , but three times.

Chelsea sloan

Founder of the Uptown Cheapskate consignment shop

Sloan owns 10 Uptown Cheapskate stores, three of which she has opened herself. At the time of this interview, she opens yet another.

Before we get into the costs associated with opening a retail store, Sloan shares what you need to consider first.

Before opening this retail store …

Before opening a new store, homeowners should be aware of rising construction costs and make sure they are properly capitalized, Sloan cautions. “The first six to 12 months are tough, and even if your books say you’re profitable, cash flow is another matter,” Sloan explains.

There are some hidden costs that you need to take into account when opening your retail store.

For example, A rigid label security sensor system is a must-have for clothing stores and costs nearly $ 6,000 to set up, according to Sloan. In the case of Uptown Cheapskate, its custom hangers cost $ 10,000 to display 20,000 items of clothing.

As a guide to help future store owners understand how much it costs to open a retail store, Sloane shares with us the cost estimates for his upcoming brick and mortar launch at State College, Pa., And what to take into account in our retail business. calculator below.

Calculate your retail start-up costs with this calculator

Key financial considerations when opening a retail store

Below are the top five Sloan cost considerations. Every store is different, but if you keep their recommendations in mind, you won’t find yourself blinded by unexpected start-up costs.

1. Rent and operation

“The lease is the most critical part of your business plan and the biggest fixed expense. “

Cost Checklist:

  • ✔ First month’s rent, last month’s rent and security deposit: $ 18,600
  • ✔ Utilities, such as electricity, gas, telephone, Internet, water, sewer bills: $ 600
  • Total rents and operating expenses: $ 19,200

Negotiate the rent: Instead of signing a ten-year lease, Sloane signed a five-year lease with another five-year option for more flexibility. She also negotiated free rent for the first few months and had the owner deliver the store space in “a vanilla shell” – ready for painting, changing rooms and finishing touches.

Know (and negotiate, again) your landlord’s responsibilities: Sloane ensured that it was stated in the lease that the landlord would be responsible for the HVAC system. She estimated that the CVC would cost around $ 25,000 to replace, so having this coverage was essential.

2. Administrative costs

“A little-known cost is that of your electricity and gas depots. Ours are both over $ 1,500, and the power companies hold that money for a few years while you establish credit with them. “

Cost Checklist:

  • Licenses: $ 2,000
  • Permits: $ 1,000
  • ✔ Filing of articles of association: $ 325
  • State fees: $ 200
  • ✔ Professional and legal fees: $ 100
  • Liability and property insurance: $ 1,700
  • ✔ Work accident insurance: $ 1,500
  • Total administrative costs: $ 6,825


Save on phone and alarm systems: Instead of paying an extra $ 60 per month for two phone lines, Sloane found a way to save money by using a low cost VOIP phone system called OOMA. For an alarm system, she found a local business that was willing to match the price it was willing to pay at $ 30 per month, equipped with other features like an app and automatic alerts.

3. Store upgrades and accessories

“One of my biggest expenses is in matches. We want to have a high end look for the store, so we ordered custom fixtures designed for the space from a supplier in Texas.

Cost Checklist:

  • ✔ Floor covering: $ 15,000
  • ✔ 8 fitted changing rooms: $ 8,000
  • Painting : $ 5,000
  • Bathrooms : $ 2,000
  • ✔ Huge wrap-around counter, glass shelves, slatted wall, stabilizer system, custom graphics, plants, wood wall panels and counter light fixtures: $ 75,000
  • Total costs of store upgrades and installations: $ 105,000

4. Marketing and promotions

“The period of opening for the purchase of an Uptown Cheapskate is unique. We open our stores to the public when the store is completely empty and only buy products for three months. During this time, customers can browse, but we don’t sell anything until our opening day.

What is an open purchase period?

An open-to-buy plan is a purchasing budget for future inventory orders that a retailer creates for a specific time period. Uptown Cheapskate’s openness to purchase strategy allows it to stock just the right amount of product at a time.

Cost Checklist:

  • ✔ Grassroots efforts, including flyer campuses and discussions with its youth clientele: $ 500
  • “Cash for Clothes” radio messages: $ 5,000 – $ 8,000
  • ✔ Digital media designed by the internal franchise support team to reach potential customers: No charge, included in the deductible
  • Public relations to reach readers and potential customers: No charge, included in the deductible
  • ✔ Billboards, bus signs and sponsorships to reach the demographic target of 18-25 years old: $ 2,000 to $ 10,000
  • Total marketing and promotion costs: ~ $ 20,000 during the inauguration phase

Tease your audience: Uptown Cheapskate’s Open Buy Strategy allows customers to see, touch, but not buy until opening day. It creates buzz and word-of-mouth advertising among your target demographic.

Target different media: Similar to the Uptown Cheapskate strategy, you can make sure all the bases are covered by targeting a wide variety of media to reach your audience.

5. Equipment and IT

“It’s another big job. I am budgeting $ 23,000 for this project.

Cost Checklist:

  • ✔ Linux servers and 4 computers with cash registers, Zebra printers and other peripherals: $ 10,000
  • Scanners: $ 2,000
  • Printers: $ 2,500
  • ✔ Credit card distributors: $ 1,200
  • Safety labels and sensors: $ 6,000
  • ✔ iPad kiosks of the CityGro SMS loyalty program: $ 1,000
  • ✔ iPad recording kiosks for our sellers: $ 1,500
  • ✔ A TV with a Chromebit app that plays Concerto2 images and branded content: $ 500
  • ✔ Speaker systems (“The ambience is huge, so we are using 4 speakers and a receiver with background music.”): $ 800
  • Point of sale system: $ 6,000
  • Total equipment and IT costs: $ 31,500
Are you looking for a retail point of sale system?

Standard point of sale systems (software and hardware) can cost anywhere from $ 1,000 to $ 3,000, with an additional $ 550 for each workstation. They are also likely to offer ecommerce integration to sync sales and customer data between your physical and online store.

For example, every time a store sale takes place, it is automatically synced and updated in your online inventory, accurately updating your last stock.

You will also want to consider an online website to promote your physical store, or even grow your business online. Free websites are available, but we recommend investing between $ 30 and $ 300 per month for a web service with more capabilities.

Total start-up cost

The numbers above provide a concrete example of what it costs to open a retail store like Uptown Cheapskate. The calculation of rent and operations, administrative costs, store upgrades and fittings, marketing and promotions, as well as equipment and IT was: $ 182,525

More tips from the founder of Uptown Cheapskate

Even the most meticulous shots are doomed to encounter a sudden curve. Chelsea Sloan shares more tips when starting your retail store:

Budget for unforeseen costs: “My best advice is to plan to do some things yourself if necessary, and also to plan for everything to be more expensive. On this project, I budgeted $ 75,000 in working capital. We will need it to pay for labor and extra costs while we are working to be profitable.

Be prepared to inject more money: “Businesses fail either because their fundamentals are shaken or, more often than not, because they don’t have the money to hang on as they grow. Even our top Uptown Cheapskate stores that make over $ 1 million and are 20% profitable have been slow to ramp up and build a following.

“An owner must be prepared not to make money for a while, and also be prepared to put in more money.”

Calculate how much it costs for DIY, then match the prices: “If you ask a company to bid on installing a 16-camera system, they’ll offer you $ 65 / camera, or $ 1,050, plus additional charges. It takes about 10 hours for a beginner to set up.

“I discovered that by calling and talking shop with a camera installer, their offer will go down. When I tell them my budget is $ 400 (or $ 40 / hr), they will. Every business seller will try to get a high price for their services. Knowing what things actually cost and being prepared to do it yourself will get you real prices.


Starting a physical retail store is one of the most expensive forms of starting a business. That said, understanding your budget well in advance and knowing where you can save will put you in a good position to have a new profitable business.

This real-life Uptown Cheapskate case study serves as a guide to what to consider when opening your store’s start-up and operating costs, along with strategies on how you can leverage minimum resources to achieve great results.

Ready to start? Whether it’s choosing the right point of sale or the right ecommerce platform, our expert advisors are here to help you with your technology needs. Call us at (844) 687-6771 for a free 15-minute consultation.


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