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Dollar Store Business Idea

Dollar stores are flourishing in the current economic downturn. This fact may have you wondering how to start a dollar store. One approach would be to look for franchise opportunities with one of the national dollar store chains.

This would require a hefty upfront investment, but would guarantee you a steady supply of low-cost inventory items as well as some start-up assistance.

The other option would be to start a dollar store from scratch. You would save the franchise fees, but you would have to locate and procure your own inexpensive items to sell.

When deciding how to start a dollar store, remember that everything in your store should be priced at one dollar or less. While some stores are now charging over a dollar for a few items in the store, this is often confusing to customers and should be avoided.

In addition to ordering and selling cheap merchandise, your business will need to accurately account for all sales and for any waste. Waste includes stolen items as well as broken items. You will have to receive freight, return defective merchandise, pay invoices, stock shelves, and clean your store. Clerks and cashiers will have to be hired, scheduled, and paid.

How To Start A Dollar Store – Your Products

A dollar store typically stocks toys, food items, health and beauty supplies, household items and more. If you don’t open a franchise, you will have to look for creative sources to keep a continuous flow of merchandise coming in to your store. In addition to making sure you have enough inventory, you’ll also want to make sure you don’t have too many of certain items.

You’ll need to learn which items are in high demand in your area and order appropriately. If perishable or seasonal items do not sell, you may find yourself with merchandise that must be discarded or donated. Some sources of merchandise could include close-out distributors, surplus warehouses, and salvage companies.

Store equipment should also be researched when thinking about how to start a dollar store. In addition to counters and shelving, you will need cash registers, shopping carts, baskets, bags, office supplies, phones, and restroom supplies. You’ll need a selection of tax forms and employment applications if you hire workers as well as an area for breaks and personal possessions.

While not absolutely necessary, it is becoming harder and harder to run a retail establishment without computerized equipment to manage the store’s inventory and perform accounting functions.

Managing Your Dollar Store Business

If you’ve never managed a store before, there’s more to it than just selling merchandise. A few classes in business management and business administration will help you to learn the basics. In addition to accounting for all sales and expenses, you’ll have several tax considerations that will require precise records.

Employee wages will have to be tracked so that you can provide W-2′s at the end of the year. In addition, you’ll have to make quarterly payments for federal, state, and social security taxes. If you offer benefits that require employer contributions, you’ll have to report those as well. In addition, your sales will require payment of state and local sales taxes in most areas. To properly manage your store, you’ll also have to carefully track your inventories for tax purposes in addition to replenishing your stock.

When learning how to start a dollar store, don’t forget about licensing. You’ll need a business license at a minimum plus a federal tax id. Depending on your area, you may need additional permits to operate a store and to display signs. Your local government office should have a department that works with local businesses. This office should be able to help you navigate the regulations that pertain to your specific area. Workman’s compensation insurance, unemployment insurance, and general liability insurance policies should also be researched and purchased prior to opening your doors.

Finding Customers And Expanding Your Business

Most dollar stores don’t have a problem attracting customers if people know where they are. Locating your new store in a highly visible shopping area should attract customers. If you aren’t very visible, invest in a few roadside signs if that’s allowed in your area. Using a coupon mailer is another good way to attract clientele. Once you have traffic inside your store, it will be up to you to stock items that are in demand so that you build a customer base.

Once you’ve learned how to start a dollar store and have a successful operation, you may begin to think of expanding. The best way to do so is to open a new store in another area of town. You’ll have to research which areas have the fewest stores that would compete for your potential customer’s business, but also have reasonable store rental rates. If a store next to you becomes vacant, you could expand by increasing the size of your current store or opening a new store with a different type of merchandise.

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