Mar 5, 2008

How To Open a Small Town StoreBy Karen E. KleinBusinessWeek.com

After 25 years as a paralegal, I’m launching a new career as an entrepreneur. I own an old building where I plan to open a gift, art, and antiques store later this year, debt-free. The store is in a small town, so I don’t expect heavy traffic, but I’m hoping my low overhead will help compensate for a smaller customer base. Am I right? —D.A., Texas

An inventory-heavy retail venture like this, for a first-time entrepreneur in a location with a small customer base and little foot traffic, is particularly risky. Assuming you’ll be using retirement or other savings (BusinessWeek.com, 1/11/08) to launch this business, your nest egg could easily slip through your fingers unless you do better than “hope” your business can support you.

Just because you own a building doesn’t mean it’s a good location for a gift and antique store, says Bob Kramer, a retail consultant, author, and speaker. Location is so crucial to retail business success that you might be wiser to lease your building out as office or warehouse space and use the income it generates to rent an affordable storefront in a more retail-friendly spot. “It’s not a good idea to think that since you’re not paying rent, everything will be fine. By opening a store, you’re giving up the opportunity to earn money working elsewhere and giving up the opportunity for the building to provide a rental income stream,” he notes.

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