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Hardware Shop Business Plan

Planning to start a hardware store? The extensive marketplace and consistently rising demands make starting a hardware store a lucrative business venture.

Anyone can start a hardware shop, however, a business plan can help you raise funds and map out its scalability for prolific growth.

Need help writing a business plan for your hardware shop? You’re at the right place. Our hardware shop business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Hardware Shop Business Plan?

Writing a hardware shop business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products & services:.

Highlight the products you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

• General hardware store
• Specialty hardware store (automotive supplies, construction hardware, etc)
• Online hardware store
• Industrial hardware store
• Plumbing hardware store
• Electrical hardware store
• Describe the legal structure of your hardware store, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established hardware store, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your hardware shop business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Hardware products:

Mention the products your business will offer. This list may include product categories like,

• Building materials
• Plumbing materials
• Electrical material
• Safety and protective equipment
• Hardware and fasteners

Mention if your hardware store offers any niche-specific services to the customers.

Quality measures

: This section should explain how you maintain quality standards and consistently provide the highest quality service.

Additional Services

In short, this section of your hardware plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your hardware store business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your hardware shop, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & machinery:.

Include the list of equipment and machinery required for hardware, such as pipe cutters, pipe threaders, showroom displays, and fixtures, pressure testing equipment, cutting and measuring tools, office equipment, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your hardware shop’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your hardware store, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the hardware industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your retail hardware store business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample hardware shop business plan will provide an idea for writing a successful hardware plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our hardware shop business plan pdf .

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Choose the Right Business Location

Frequently asked questions, why do you need a hardware shop business plan.

A business plan is an essential tool for anyone looking to start or run a successful hardware shop. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your hardware store.

How to get funding for your hardware shop?

There are several ways to get funding for your hardware shop, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

How do I write a good market analysis in a hardware shop business plan?

Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:

• Stating the objective of your market analysis—e.g., investor funding.
• Industry study—market size, growth potential, market trends, etc.
• Identifying target market—based on user behavior and demographics
• Analyzing direct and indirect competitors.
• Calculating market share—understanding TAM, SAM, and SOM.
• Knowing regulations and restrictions
• Organizing data and writing the first draft.

Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.

How detailed should the financial projections be in my hardware shop business plan?

The level of detail of the financial projections of your hardware shop may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a complete view of your financial performance.

Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.

What key components should a hardware shop business plan include?

The following are the key components your hardware shop business plan must include:

• Executive summary
• Business Overview
• Market Analysis
• Products and services
• Sales and marketing strategies
• Operations plan
• Management team
• Financial plan

What's the importance of a marketing strategy in a hardware shop business plan?

Marketing strategy is a key component of your hardware shop business plan. Whether it is about achieving certain business goals or helping your investors understand your plan to maximize their return on investment—an impactful marketing strategy is the way to do it!

Here are a few pointers to help you understand the importance of having an impactful marketing strategy:

• It provides your business an edge over your competitors.
• It helps investors better understand your business and growth potential.
• It helps you develop products with the best profit potential.
• It helps you set accurate pricing for your products or services.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Hardware Store Business Plan

Nov.25, 2023

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Table of Content

A hardware store is a retail business that sells tools, materials, and equipment for home improvement, construction, and maintenance projects. Hardware stores can cater to different segments of customers and can also offer services such as installation, repair, and consultation, as we explained in our Hardware Retail Franchise Business Plan .

What is the Business Plan for a Retail Hardware Store?

A business plan for a retail hardware store is a document that outlines the goals, strategies, and financial projections of a store that sells hardware products and supplies to customers. A business plan typically includes the following sections:

• Executive summary
• Company description
• Products and services
• Market analysis
• Competitive analysis
• Marketing and sales strategy 
• Management and organization
• Financial plan

Why Do You Need a Business Plan Sample for a Hardware Shop?

A hardware shop needs a business plan sample to outline its vision, goals, and strategies. It can show how the shop will operate, what products and services it will offer, and how it will reach its target market. A business plan sample, like a Computer Software Business Plan , can also demonstrate the financial viability of the shop and attract funding and support from various stakeholders. A business plan sample is a vital document for any hardware shop owner who wants to start or grow their business.

Here is an example of a retail hardware store business plan sample:

Executive Summary

Ace Hardware is a new hardware store that will be located in San Diego, California. Ace Hardware will operate as a sole proprietorship owned by Alex Hales, an experienced and certified hardware professional.

Ace Hardware will target residential and commercial customers in the San Diego area who are looking for a convenient, reliable, and friendly hardware store. Ace Hardware will focus on the following customer segments:

• DIY enthusiasts
• Contractors

Ace Hardware will require a total of $500,000 to start and operate the business. Ace Hardware is seeking a $300,000 loan from a reputable bank to finance the startup and operating costs of the business. The loan will be repaid in 5 years with an interest rate of 10%. Ace Hardware will also contribute $200,000 of the owner’s savings as equity.

Company Overview

Ace Hardware is a new hardware store that will be located on Main Street, San Diego, California. The store will occupy a 5,000-square-foot space in a busy and convenient shopping plaza, with ample parking and visibility. The store will be open from 8 a.m. to 8 p.m., seven days a week.

Ace Hardware will be registered as a limited liability company (LLC) in the state of California and will comply with all the relevant federal, state, and local laws and regulations. The store will be owned and operated by Alex Hales, who will also serve as the manager and the chief executive officer (CEO) of the company. Alex Hales will own 100% of the company’s shares and will have complete control over the business decisions and operations.

Industry Analysis

The hardware store industry is a segment of the larger home improvement industry. It includes businesses that sell tools, materials, and equipment for home improvement, construction, and maintenance projects.

Here are some interesting market insights for DIY & Hardware Store in the United States:

• The global hardware market size amounts to $121.34 bn in 2023 and is expected to grow to $164.21 bn in 2027. (Source – The Business Research Company )
• The revenue generated in the DIY & Hardware Store market in 2023 amounts to $641.80 bn. (Source – Statista )
• It is projected that the hardware market will experience an annual growth rate of 2.63% from 2023 to 2028. (Source – Statista )

Customer Analysis

Ace Hardware’s target market is the home improvement market in San Diego, California. This market consists of customers who are looking for products and services for home improvement, construction, and maintenance projects. 

According to the US Census Bureau, there were 1,419,845 housing units in San Diego County in 2020, of which 56.4% were owner-occupied and 43.6% were renter-occupied. The median value of owner-occupied housing units was $632,000, and the median monthly rent was $1,647. The median household income was $85,507, and the per capita income was $38,923.

Ace Hardware’s customer segments are:

1. Residential customers

• These are homeowners or renters who are looking for products and services for their own home improvement, construction, and maintenance projects. 
• They have different levels of skills, budgets, and tastes and may seek advice, guidance, and assistance from hardware store staff. 
• They also value convenience, quality, and variety in their purchases. 

Ace Hardware will target residential customers who live or work within a 10-mile radius of the store location and who have a household income of $50,000 or more . Ace Hardware estimates that there are about 500,000 potential residential customers in this segment.

2. Commercial customers

• are contractors, builders, landscapers, decorators, and other professionals who are looking for products and services for their clients’ home improvement, construction, and maintenance projects. 
• They have specific requirements, standards, and deadlines and may seek reliability, efficiency, and flexibility from hardware store staff. 
• They also value price, quality, and availability in their purchases. 

Ace Hardware will target commercial customers who operate within a 20-mile radius of the store location and who have an annual revenue of $100,000 or more . Ace Hardware estimates that there are about 10,000 potential commercial customers in this segment.

Competitive Analysis

ABC Hardware faces competition from other hardware stores in the area, such as:

• Home Depot – Home Depot is the largest home improvement retailer in the US, with over 2,300 stores nationwide, including 20 stores in San Diego County. Home Depot offers a wide range of products and services for home improvement, construction, and maintenance projects. Home Depot’s strengths include its large scale, brand recognition, loyal customer base, and online presence. Home Depot’s weaknesses include its high operating costs, low customer service, and generic product selection.
• Lowe’s – Lowe’s is the second largest home improvement retailer in the US, with over 1,700 stores nationwide, including 15 stores in San Diego County. Lowe’s offers a similar range of products and services as Home Depot but with a focus on home decoration and design. Lowe’s strengths include its brand recognition, loyal customer base, and online presence. Lowe’s weaknesses include its high operating costs, low customer service, and generic product selection.
• Menards – Menards is the third largest home improvement retailer in the US, with over 300 stores in 15 states, including 5 stores in California. Menards offers a similar range of products and services as Home Depot and Lowe’s but with a focus on price and value. Menards’ strengths include its low prices, loyal customer base, and online presence. Menards’ weaknesses include its limited geographic coverage, low customer service, and generic product selection.

ABC Hardware assesses and rates its competitive advantages and disadvantages based on a 1-5 scale rating. ABC Hardware’s competitive advantages and disadvantages are as follows:

Marketing Plan

ABC Hardware’s marketing objectives and goals are to:

• Increase the brand awareness and recognition of ABC Hardware in the local market and online platforms
• Attract and retain at least 1,000 loyal customers by the end of the first year
• Achieve a monthly sales revenue of $100,000 by the end of the first year
• Increase the customer engagement and loyalty by 10% by the end of the first year
• Generate at least 100 referrals and word-of-mouth per month by the end of the first year

ABC Hardware’s marketing mix is based on the following four Ps:

• Product – ABC Hardware offers high-quality tools, materials, and equipment for home improvement, construction, and maintenance projects at affordable prices. ABC Hardware also offers installation, repair, and consultation services to its customers.
• Price – ABC Hardware sets its prices based on the cost-plus pricing strategy, which adds a markup percentage to the cost of the products and services. ABC Hardware’s markup percentage is 30%, which covers its overhead and profit margin.
• Place – ABC Hardware sells its products and services through its physical store and its online store. The physical store is located in a busy and central area with high foot traffic and visibility. The online store is accessible through its website, which is user-friendly, secure, and responsive.
• Promotion – ABC Hardware uses a combination of online and offline channels to promote its brand, products, and services to its target customers.

ABC Hardware’s marketing budget and allocation are based on the following assumptions and estimates:

• ABC Hardware allocates 10% of its monthly sales revenue to its marketing budget
• ABC Hardware spends 60% of its marketing budget on online channels and 40% on offline channels
• ABC Hardware tracks and measures the return on investment (ROI) and cost per acquisition (CPA) of each marketing channel

ABC Hardware’s marketing budget and allocation for the first year are represented in the following chart:

Operations Plan

ABC Hardware’s operations plan covers the following aspects of its business:

• Location – The store location is 123 Main Street, Los Angeles, CA 90001, which is a busy and central area with high foot traffic and visibility. It is close to its target customers, has low rent and utilities costs, and has ample parking space and public transportation access.
• Size – The store has a size of 5,000 square feet, which is enough to accommodate its products, services, staff, and customers. ABC Hardware plans to expand its store size to 10,000 square feet by the end of the third year.
• Layout – The store is divided into four main sections: tools, materials, equipment, and services. ABC Hardware also has a checkout counter, a customer service desk, a storage room, and a restroom.
• Inventory management – ABC Hardware uses a barcode scanner and a point-of-sale (POS) system to record and monitor sales and inventory transactions. ABC Hardware also uses a software program and a database to analyze and forecast inventory levels and trends. Refer to our SaaS Business Plan for a better understanding.
• Procurement – ABC Hardware sources its products and services from reliable and reputable suppliers and vendors. ABC Hardware has established long-term and mutually beneficial relationships with its suppliers and vendors.
• Barcode scanner
• Security camera
• Alarm system
• Fire extinguisher

Organization and Management

Ace Hardware will have a simple and flat organizational structure, where the owner and manager will have direct and close supervision and communication with the staff. The organizational structure will consist of the following positions:

• Owner and Manager – Alex Hales, the owner, manager, and CEO of the store, will oversee all aspects of the business, from planning and budgeting to hiring and reporting. He has a business degree and 10 years of experience in the hardware store industry.
• Sales Staff – 10 sales staff will be hired to assist and serve the customers, as well as sell and provide various services on the sales floor. They will have 2 years of experience and a high school diploma and will work in shifts of 5 under the owner and manager.
• Cashier Staff – 3 cashier staff will be hired who will process and complete the transactions, as well as perform checkout and customer service tasks. They will have 1 year of experience and a high school diploma and will work in shifts of 2 or 3 under the owner and manager.

Financial Plan

Startup costs.

Ace Hardware will require a total of $500,000 to start and operate the business. The startup costs will include the purchase of inventory, equipment, fixtures, signage, and leasehold improvements, as well as the initial marketing, legal, and administrative expenses. The breakdown of the startup costs is as follows:

Operating Costs

Ace Hardware will incur monthly operating costs to run and operate the business. The operating costs will include the rent, utilities, payroll, taxes, insurance, and maintenance expenses. The breakdown of the operating costs is as follows:

Ace Hardware will generate revenue from the sale of products and services, such as paint, plumbing, electrical, gardening, hardware, lumber, cutting, installation, repair, and delivery. Ace Hardware will use the following assumptions to project its revenue:

• Average sale per customer: $50
• Average number of customers per day: 100
• Average number of days per month: 30
• Average revenue per month: $50 x 100 x 30 = $150,000
• Average revenue growth rate per year: 10%

Based on these assumptions, Ace Hardware projects to generate $1.2 million in sales revenue in the first year, $1.8 million in the second year, and $2.4 million in the third year.

Break-Even Analysis

Ace Hardware expects to achieve break-even in the first year of operation, where its total revenue will equal its total costs. Ace Hardware will use the following formula to calculate its break-even point:

Break-Even Point = Fixed Costs / (Revenue per Unit – Variable Cost per Unit)

• Fixed Costs: $32,000 per month, or $384,000 per year.
• Revenue per Unit: $50 per unit.
• Variable Cost per Unit: $25, or 50% of the revenue per unit.

Based on these figures, Ace Hardware’s break-even point will be:

• Break-Even Point = $384,000 / ($50 – $25) = 15,360 units
• Break-Even Point in Sales = 15,360 x $50 = $768,000

This means that Ace Hardware will need to sell 15,360 units or generate $768,000 in sales revenue to cover its costs and break even.

Cash Flow Statement

Income statement, balance sheet, why choose ogscapital for your hardware store business plan.

At OGSCapital, we are the leading provider of business plan services for businesses of all sizes. We have a team of senior business experts with 15+ years of experience in 45 industries who can create customized and unique business plans that meet the highest standards of quality, professionalism, and effectiveness. We also offer comprehensive and in-depth market research, fast and reliable results, a proven track record of success, and access to a wide network of contacts. For reference, check our Computer Repair Business Plan .

Contact us today and get a free consultation from one of our business plan experts. We will help you achieve your business goals and become a market leader.

Frequently Asked Questions

Is a hardware shop profitable.

Hardware shop business is profitable in the US, as it sells essential tools and materials for home improvement and construction projects. The profit margin in hardware stores in the US is estimated to be around 15% to 30%, depending on the type and category of products sold. Check our iPhone Repair Business Plan here.

How do I start a hardware business?

To open a hardware store business, you need to conduct market research, write a hardware business plan, choose a suitable location, obtain the necessary licenses and permits, source your products, hire and train your staff, promote your business, and provide quality products and services.

How do I write a business plan for a hardware store?

A small hardware store business plan is a document that describes the details and objectives of your business and how you plan to achieve them. It should include the sections of executive summary, market analysis, products and services, marketing plan, operational plan, financials, and appendix. Refer to our Web Hosting Business Plan to learn more.

What is the business category of a hardware store?

A hardware store is a type of retail store that sells a variety of tools, materials, and supplies for home improvement, construction, gardening, and other activities. Hardware stores are usually classified under the NAICS Code 444130, SIC Code 5251, and Business Activity Code 444000.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How to Start a Hardware Store in 5 Steps

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Starting a hardware store — a brick-and-mortar shop that sells, essentially, brick and mortar (and everything else you need to build a house, fix a leaky faucet, or paint the garage) — might seem daunting in this day and age.

Smaller hardware stores, like small businesses in every industry, face cutthroat competition, not just from other local businesses but big box stores like Home Depot and e-commerce giants like Walmart and Amazon.

But if you have the expertise and passion for opening a hardware store, don’t get discouraged. You can actually control a number of factors to maximize your potential for success. Review these five steps in how to start a hardware store before you get your business started to see if you have a good shot at staying afloat.

What you need to know about starting a hardware store

According to IBISWorld, there are nearly 20,000 hardware stores in the United States today, producing about $24 billion in revenue and employing just over 148,000 people.

Its analysis of the industry is in line with something you may have noticed if you’re interested in getting into the business: As the economy has improved over the last five years, the housing market has strengthened, leading to an increase in the number of home improvement projects that require trips to the hardware store.

Additionally, low mortgage rates have encouraged people to buy and renovate homes, putting countrywide brands like True Value and Ace Hardware in a good position to capitalize.

The report does note that hardware store growth is expected to slow a bit in the next five years, but the overall industry does have a positive outlook.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How to start a hardware store in 5 steps

1. decide between opening your own hardware store or starting a franchise.

There are lots of completely independent hardware stores around the country, catering to the ultra-local community. If you’ve identified a market where you feel you can think about starting a hardware store and become the near-exclusive provider for — and if you’re a control freak who wants to make 100% of the decisions about how your business operates — you might feel good about opening your own shop. Starting a hardware store on your own also requires less money.

There is, however, another option: starting a hardware store with a popular franchise , which provides you access to an established name, as well as a proven operational model and efficient supply chain. You can still be the owner of the store with plenty of latitude to make business decisions.

That’s the situation at Waverly Ace Hardware in Baltimore, Maryland, which is part of an independently run co-op within the fold of Ace Hardware stores.

According to Michael Marren, the assistant manager of one of the 11 Waverly Ace Hardware stores across Maryland, Washington, D.C., and northern Virginia, the relationship between the store and the parent company is helpful and fruitful.

“Our parent, A Few Cool Hardware Stores LLC, is based out of the District, and the name denotes the company philosophy rather well. We're a small business, our leadership is independent and local — but we have the benefit of Ace's logistical umbrella,” he says.

For example, Marren says that his company offers “well above minimum wage” and “a robust benefits package,” which he notes is a distinct choice that makes employees happier.

It’s also nice when you’re starting a hardware store within an established franchise to have a supply chain and the logistics of running the store all ready for you to utilize, rather than figuring it out on your own.

2. Write a business plan

Whether you go with a brand or strike out on your own, you should have a business plan that details how you’ll put your hardware store in the best position to succeed.

Important things to cover include:

Knowing your customer: What does your typical customer look like? Are they DIY landlords and contractors, or homeowners doing pet projects? Depending on who you’ll be catering to, the way your store is designed and the weight of your stock will change.

What your finances look like: How much do you need to start up? Once you do get going, what is your break-even point? What do you expect your cash flow to be like on a monthly basis? If you’re joining an established brand, IBISWorld notes you need a minimum of $150,000 unencumbered cash available for investment in a True Hardware, while Ace requires between about $820,000 and $1.5 million — the total depends on how big your store will be and other factors.

Your marketing plan: If you join a national brand, you’ll have access to all kinds of programs and events you can use to boost your profile. But you should also consider local, perhaps even offline marketing campaigns, loyalty programs for repeat customers and a flexible national catalog program.

Location: This one is a no-brainer. You’ll want somewhere with a lot of foot traffic that doesn’t cannibalize the business of other stores — or put you in a position to be cannibalized in return.

3. Invest in supplies and excellent customer service

According to IBISWorld, the three most important factors for success are the ability to control stock on hand, an experienced workforce and having a loyal customer base.

These are sentiments that Marren echoes when discussing why people come to his hardware store, as opposed to shopping online with Amazon or hitting a big box store.

“In my view, people come to us for interaction, information, personalization, and proximity. We're closer, friendlier, and we'll actually help you when you come in,” he says.

But even the friendliest store associates can’t do anything for customers if what the customers need isn’t in stock.

“The first rule of customer service is having the thing that someone wants to buy,” says Marren. “Invest in inventory and point of sale software that can analyze the stock and keep your inventory responsive.”

IBISWorld says that challenges to starting a smaller hardware store revolve around competition — mainly those larger retailers and home improvement stores. Marren agrees, noting that bigger stores have an economy of scale that gives them an edge.

So, if you can’t beat the bigger stores on price, you need to beat them with better, more helpful, happier employees. Keeping those employees happy (e.g., with the benefits package Marren described) will go a long way toward gaining the loyalty and quality effort you need to succeed.

4. Obtain the necessary permits, insurance and a business bank account

You’ll need to register your business with your secretary of state, apply for a business tax identification number (also known as an employer identification number, or EIN) from the IRS, and open a business checking account .

Establish revolving lines of credit with your hardware distributors as well as with your financiers, if you have them, whether they are traditional banks or online lenders.

Depending on where you’re setting up shop, you may need specific local, state and city permits — and you might want to visit with an attorney or accountant familiar with local standards to make sure you’re in compliance.

Finally, get the right business insurance: If you have employees (and it’s doubtful you’ll be running one of these stores all on your own), you need workers' compensation insurance — a commercial insurance policy that covers the store inventory against loss or injury claims from customers.

Start Your Dream Business

5. Adapt your inventory, marketing and staffing

Your hardware store will hardly be a static entity. As the homeownership market changes, the seasons shift, or new challenges (and challengers) enter the scene, you’ll need to adapt your inventory, marketing campaigns, and staffing needs.

What should remain consistent is that you:

Continue to maintain inventory levels so that you’re never out of stock at a crucial moment.

Your commitment to keeping your staff informed and engaged is unwavering.

Always look to growth within your niche rather than overextending yourself.

As Marren puts it: “We take a more ecological view of the market — we fit a niche. We're not in the business of putting other local stores out of business.”

After all, since you’re starting a hardware store, you’re in the business of helping people improve their homes, and by extension, their lives. Conduct your business appropriately.

On a similar note...

Hardware Store Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Wholesale & Retail

Are you about starting a hardware store? If YES, here is a complete sample hardware store business plan template & feasibility report you can use for FREE .

So we have considered all the requirements for starting a hardware store. We also took it further by analyzing and drafting a sample hardware store business marketing plan template backed up by actionable guerrilla marketing ideas for hardware stores. So let’s proceed to the business planning section .

If you are looking for a business to start as an entrepreneur and you know you have an interest in running a store, then you should consider starting your own hardware store business. Although you don’t need a college degree to establish your own hardware store, but you would need some form of informal training.

It would help you to learn how to manage your own store. It is important to point out that hardware store business is one the businesses that can’t go out of fashion because of the role it plays in our society.  The startup capital for this type of business can be considered to be moderate.

As a matter of fact, you can start your own hardware store and then grow it big within a short period of time by reinvesting your profits back to the business. Below is a sample hardware store business plan template that will help you successfully write yours without much stress

A Sample Hardware Store Business Plan Template

1. industry overview.

Stores in the Hardware Stores industry primarily retail a broad range of home renovation equipment and related supplies. Products such as hardware, plumbing, electrical and paint-related tools et al are the most commonly stocked goods you will likely find in a hardware store.

If you are a follower of happenings in the industry, you would have noticed that the industry has steadily improved over the five years to 2017. As the housing market has strengthened and consumer confidence has revived, individuals have started home improvement projects that had been put on hold during the recession.

Low mortgage rates during the period have also encouraged individuals to purchase and renovate new and existing homes. This flurry of construction activity has boosted demand for industry products from both contractors and do-it-yourself consumers. Going forward, revenue generated by the Hardware Stores industry is projected to grow at a slower rate.

The Hardware Stores Industry is indeed a large industry and pretty much active in all the countries of the world. Statistics have it that in the united states of America alone, there are about 19,935 registered and licensed hardware stores scattered all across the United States responsible for directly employing about 148,516 people and the industry rakes in a whooping sum of $24 billion annually.

The industry is projected to grow at 1.3 percent within 2011 and 2016. It is important to state that Ace Hardware, Do It Best and True Value Company have the largest chunk of the available market share in the industry. A recent report published by IBISWorld shows that the Hardware Stores industry has moderate barriers to entry.

The report further stated that high startup costs and the saturated nature of the market may deter new companies from entering the industry. Operators that plan to enter this industry need to consider the capital investment required to establish or purchase a store.

For example, to be eligible to join True Value Company, prospective operators must have a minimum of $150,000 unencumbered cash available for investment, while the total investment to open an Ace store ranges from $823,495 to $1,563,495, depending on store size and other variable factors. Of the total investment, $150,000 to $250,000 cash is needed.

The tough part as it relates to start-up costs most likely are the need to establish a supply of hardware and other related goods from wholesalers or directly from manufacturing companies. This is so because a hardware store business cannot be started without sourcing products for sale.

Regardless of moderate barriers to entry, the competitive nature of the industry makes it very difficult for new operators to break even within a short period of time in the industry.

Lastly, the Hardware Stores industry is pretty much open for aspiring entrepreneurs to launch their business. One good thing about hardware stores business is that the business can be opened in any part of the United States and if proper market survey and feasibility studies are conducted, then you can be rest assured of the profitability of the business.

2. Executive Summary

Mike Mendez® Hardware Stores, Inc. is a standard hardware store that will be located in High Street, Short North Arts District, Columbus – Ohio.

We have been able to lease a facility that is big enough (a 4 thousand square foot facility) to fit into the design of the kind of standard hardware store that we intend launching and the facility is located in a corner piece along a major road close to one of the largest residential estates in Columbus – Ohio.

Mike Mendez® Hardware Stores, Inc. will retail products such as hardware, tools, plumbing and electrical supplies, lawn, garden and farm supplies, paint and lumber and other building materials from different manufacturers in the United States and abroad. We are set to service a wide range of clientele in and around Columbus – Ohio.

We are aware that there are several large and small chains of hardware store outlets all around Columbus – Ohio, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online – service option for our customers, and our outlet is well secured with various payments of options. Mike Mendez® Hardware Stores, Inc. will ensure that all our customers are given first class treatment whenever they visit our store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our customer base may grow to. We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions that directly affects them.

Mike Mendez® Hardware Stores, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products. Mike Mendez® Hardware Stores, Inc. is a family business that is owned by Mike Mendez and his immediate family members.

Mike Mendez has a Diploma in Business Administration with over 5 years of experience in the retailing stores industry, working for some of the leading brands in the United States. Although the business is launching out with just one outlet in Columbus – Ohio, but there is a plan to open other outlets in major cities in the United States and Canada.

3. Our Products and Services

Mike Mendez® Hardware Stores, Inc. is in the hardware stores industry to service a wide range of clients and of course to make profits, which is why we will go all the way to make available a wide range of hardware and other related products from top manufacturing brands in the United States and other countries of the world.

Our product offerings are listed below;

• Retailing hardware
• Retailing tools and equipment
• Retailing plumbing fixtures and fittings
• Retailing electrical supplies
• Retailing paint and supplies
• Retailing garden products and equipment

4. Our Mission and Vision Statement

• Our vision is to become one of the leading brands in the hardware stores industry in Columbus – Ohio and in other key cities in the United States of America and Canada.
• Our mission is to establish a world – class hardware store business that will make available a wide range of hardware and other related products from top manufacturing brands at affordable prices to the residents of Columbus – Ohio and other key cities in the United States of America and Canada where we intend opening chains of hardware retail stores.

Our Business Structure

Mike Mendez® Hardware Stores, Inc. do not intend to start a hardware retail store business like the usual mom and pop business around the street corner; our intention of starting a hardware retail store business is to build a standard retail store outlet in Columbus – Ohio.

Although our hardware retail store business might not be as big as Ace Hardware, Do It Best and True Value Company et al, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager
• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants / Cashiers
• Sales Agents / Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Grows management’s effectiveness by employing, selecting, orientating, preparation, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Accountable for fixing prices and signing business deals
• Accountable for providing direction for the business
• Builds, interconnects, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process.
• Carries out staff induction for new team members.
• Responsible for training, evaluation and assessment of employees.
• Accountable for arranging travel, meetings and appointments.
• Oversees the smooth running of the daily office cum business activities.

Store Manager:

• Responsible for managing the daily activities in the store.
• Ensures that proper records of hardware and other related products are kept and the warehouse does not run out of products.
• Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate.
• Interfaces with third – party suppliers.
• Controls hardware distribution and supply chain inventory.
• Oversees the workforce in the hardware sales floor.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of hardware, tools, plumbing and electrical supplies, lawn, garden and farm supplies, paint and sundries and lumber and other building materials et al from different manufacturers are purchased and retailed in good price that will ensure we make good profit
• Accountable for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Model demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Document all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization’s website
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant/Cashier:

• Accountable for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• In control of financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
• Finds out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
• make suggestions and encourage purchase of products
• Provides information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options
• Bags or packages purchases
• Responsible for cleaning all the products and the store facility at all times.
• Ensures that toiletries and supplies don’t run out of stock.
• Handles any other duty as assigned by the store manager.

6. SWOT Analysis

Our intention of starting just one outlet of our hardware retail store in Columbus – Ohio is to test run the business for a period of 3 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major towns in Ohio and key cities in the United States.

We are quite aware that there are several hardware retail stores all over Charleston and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Mike Mendez® Hardware Stores, Inc. employed the services of a Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Mike Mendez® Hardware Stores, Inc.;

Ability to control stock on hand, experienced work force and having a loyal customer base are some of our core strength. So also, our location, the business model we will be operating, varieties of payment options, wide range of hardware and other related products from different manufacturing brand and our excellent customer service culture will definitely count as a plus for Mike Mendez® Hardware Stores, Inc.

A major weakness that may count against us is the fact that we are a new hardware retail store outlet in Columbus – Ohio and we don’t have the financial capacity to compete with multi – million dollars’ hardware retail store outlets like Ace Hardware, Do It Best and True Value Company and co when it comes to retailing at rock bottom prices.

• Opportunities:

The fact that we are going to be operating our hardware retail store in a corner piece property along a major road close to one of the largest residential estates in Columbus – Ohio provides us with unlimited opportunities to sell our hardware and other related products to a large number of individuals.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our hardware store outlets.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. Another threat that may likely confront us is the arrival of a new hardware store in same location where ours is located. So also, unfavorable government policies may also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

Recent trends in the hardware industry show that external competition has slightly dampened both industry revenue and profit growth.

Hardware stores have shifted business models to deal with heightened external competition and they will continue to be pressured by online retailers and larger home improvement stores. Experts projected that in 2017, the hardware stores industry is expected to profit from growing global economic conditions.

The hardware retail stores landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a hardware retailer to reach out to a larger market far beyond the areas where his physical store is located.

8. Our Target Market

Those who patronize hardware stores cut across all genders above 18 years with the financial means, and who own an apartment or office/business hence the target market for the hardware store business is all encompassing. In essence, your target market can’t be restricted to just a group of people but all those who reside in and around our store location.

In view of that, we have positioned our hardware retail store to service the residents of High Street, Short North Arts District, Columbus – Ohio and every other location where franchise cum outlets of our hardware retail stores will be located.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of hardware and other related products to the following groups of people and corporate organizations;

• Construction and Real Estate Companies
• Banks, Insurance Companies and other related Financial Institutions
• Real Estate Owners, Developers, and Contractors
• The Government (Public works department)
• Schools (High Schools, Colleges and Universities)
• Sport Facilities
• Individuals and households

Our Competitive Advantage

A close study of the hardware stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiff competition and we are well prepared to compete favorably with other leading stores in Columbus – Ohio and throughout the United States. Mike Mendez® Hardware Stores, Inc. is launching a standard one stop hardware store that will indeed become the preferred choice of residents of Columbus – Ohio and every other location where our outlets will be opened.

One thing is certain; we will ensure that we have a wide range of hardware and other related products from leading manufacturers available in our store at all times. It will be difficult for customers to visit our store and not see the type of hardware they are looking for.

Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a Competitive Advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Mike Mendez® Hardware Stores, Inc. is in business to retail a wide range of hardware and other related products to the residents of Columbus – Ohio.

We are in the hardware stores industry to maximize profit and we are going to go all the way out to ensure that we achieve or business goals and objectives. Mike Mendez® Hardware Stores, Inc. will generate income by selling the following products;

10. Sales Forecast

When it comes to hardware retail stores, if your store is well stocked with various types of hardware and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Columbus – Ohio and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the hardware retail industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Columbus – Ohio.

Below are the sales projections for Mike Mendez® Hardware Stores, Inc. it is based on the location of our business and other factors as it relates to hardware retail startups in the United States;

• First Fiscal Year: $250,000
• Second Fiscal Year: $450,000
• Third Fiscal Year: $750,000

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Mike Mendez® Hardware Stores, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the hardware retail industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Columbus – Ohio.

In other to continue to be in business and grow, we must continue to sell the hardware and other related products that are available in our store which is why we will go all out to empower or sales and marketing team to deliver. In summary, Mike Mendez® Hardware Stores, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our store in a grand style with a party for all.
• Introduce our hardware store by sending introductory letters alongside our brochure to residents, businesses and other key stakeholders in Columbus – Ohio.
• Ensure that we have a wide range of hardware and other related products from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our store.
• Position our signage/flexi banners at strategic places around Columbus – Ohio
• Position our greeters to welcome and direct potential customers.
• Create a loyalty plan that will enable us reward our regular customers.
• Engage in roadshows within our neighborhood to create awareness for our hardware retail store.
• List our business and products on yellow pages ads (local directories).
• Leverage on the internet to promote our business.
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals).
• Join local chambers of commerce and industries to network and market our products.

11. Publicity and Advertising Strategy

Despite the fact that our hardware retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our hardware retail store.

Mike Mendez® Hardware Stores, Inc. has a long-term plan of opening outlets in various locations all around Ohio and key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Columbus – Ohio before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Mike Mendez® Hardware Stores, Inc.;

• Place adverts on community based newspapers, radio and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers.
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that we position our banners and billboards in strategic positions all around Columbus – Ohio.
• Distribute our fliers and handbills in target areas in and around our neighborhood.
• Advertise our hardware retail store business in our official website and employ strategies that will help us pull traffic to the site.
• Brand all our official cars and trucks and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to hardware retail stores, it is normal for consumers to go to places where they can get hardware and other related products at cheaper price.

In view of that, our prices will conform to what is obtainable in the industry but we will ensure that within the first 6 to 12 months, our products will be sold a little bit below the average price of various hardware stores in the United States of America.

We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brand.

• Payment Options

The payment policy adopted by Mike Mendez® Hardware Stores, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Mike Mendez® Hardware Stores, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards/Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for our hardware and other related purchases without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard hardware shop in Columbus – Ohio and here are the key areas where we will spend our startup capital;

• The total fee for registering the business in the Unites States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of Mike Mendez® Hardware Stores, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
• The cost for shop remodeling (construction of racks and shelves) – $20,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory  – $350,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
• The cost of launching a website: $600
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of $750,000 to successfully set up a standard hardware retail store in Columbus – Ohio.

Generating Funds/Startup Capital for Mike Mendez® Hardware Stores, Inc.

Mike Mendez® Hardware Stores, Inc. is a private registered business that is solely owned and financed by Mike Mendez and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $250,000 (Personal savings $200,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Mike Mendez® Hardware Stores, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our wide range of products such as hardware, tools, plumbing and electrical supplies, lawn, garden and farm supplies, paint and sundries and lumber and other building materials et al from different manufacturers (brands) a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Mike Mendez® Hardware Stores, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the shop: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Design and Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of our list of products that will be available in our store: Completed
• Establishing business relationship with vendors – manufacturers and suppliers of hardware and other related products: In Progress

Related Posts:

• Convenience Store Business Plan [Sample Template]
• Mini Grocery Store Business Plan [Sample Template]
• Fruit and Vegetable Store Business Plan [Sample Template]
• Electrical Shop Business Plan [Sample Template]
• Vape Shop Business Plan [Sample Template]

How to Start a Hardware Store

Main Sections In This Post Steps To Starting A Hardware Store Points to Consider Knowledge Is Power Featured Video

This article provides a comprehensive blueprint for initiating a hardware store. Within, you’ll find an array of examples and samples.

Access the latest information in our “Knowledge Is Power” section, tailored for startup stages and ongoing operations.

Considering the extensive information, consider sharing and saving this post for future reference.

Let’s get started with the steps.

The Steps to Take To Start Your Hardware Store

Below are the steps to starting a hardware store.

Each step is linked to a specific section, allowing you to jump to your desired section or scroll to follow the steps in order.

• An Overview of What You’re Getting Into
• Hardware Store Overview
• Researching Your Hardware Store
• Looking at Financials
• Creating Your Mission Statement
• Creating A Unique Selling Proposition (USP)
• Choose a Hardware Store Name
• Register Your Company
• Create Your Corporate Identity
• Writing a Business Plan
• Banking Considerations
• Getting the Funds for Your Operation
• Software Setup
• Business Insurance Considerations
• Supplier and Service Provider Considerations
• Setting Your Prices
• Physical Setup
• Creating a Website
• Create an External Support Team
• Hiring Employees
• Getting Customers Through the Door

1. An Overview of What You’re Getting Into

Engaging in a profession that aligns with one’s passions is a blessing. The degree of passion you possess can significantly determine your success, especially in owning and operating a hardware store.

Passion serves as a compass during challenging times. A passionate individual seeks solutions when confronted with issues, while one without it might consider an exit strategy .

Consider this scenario:

Imagine a life where you’re financially secure, owning every desired asset, free from debts, with a robust savings account and a consistent monthly income from wise investments.

Here’s a pivotal question: Would you willingly run a hardware store without any monetary gain if financial constraints were non-existent?

A ‘yes’ indicates a genuine passion for the hardware store business. Conversely, a ‘no’ invites introspection. What endeavor truly captures your heart? Perhaps it’s wiser to chase that dream.

To conclude, a genuine passion for the hardware business can strongly predict success. Before diving in, ensure your heart and intentions align with the venture.

For More, See How Passion Affects Your Business . Also, see Considerations Before You Start Your Business to identify key points for a new business owner.

2. Gaining an Overview of Owning a Hardware Store

Next, let’s spend some time on key issues to give you an overview of what to expect from owning and running your business.

a.) A Quick Overview of Owning a Hardware Store

A hardware store is a retail establishment primarily selling tools, equipment, and supplies necessary for home improvement, maintenance, and repair projects. This can include nails, screws, hand and power tools, plumbing and electrical supplies, gardening products, and paint.

The daily operations of running and managing a hardware store encompass a range of tasks:

• Inventory Management: Regularly checking, restocking, and organizing inventory. This ensures products are readily available and easy to find for customers.
• Customer Service: Assisting customers by answering questions, offering product recommendations, and helping locate items. Ensuring customer satisfaction is paramount.
• Sales and Checkout: Managing point-of-sale transactions, handling cash, processing electronic payments, and issuing receipts.
• Staff Supervision: Overseeing staff, assigning tasks, and ensuring they are adequately trained on store products and equipment.
• Store Maintenance: Keeping the store clean, orderly, and safe for customers and employees. This includes tidying up aisles, ensuring neat displays, and promptly addressing safety concerns.
• Bookkeeping and Administration: Tracking sales, expenses, and profits. This also involves handling any required paperwork or permits and ensuring compliance with local regulations.
• Marketing and Promotion: Implementing strategies to attract customers, including sales promotions, advertisements, or loyalty programs.
• Supplier Relations: Regularly communicating with suppliers, placing orders, and negotiating prices or delivery terms.

Running a hardware store requires balancing customer service, inventory management, staff supervision, and administrative tasks.

The ultimate goal is to ensure customers find what they need, receive excellent service, and leave satisfied, all while maintaining a profitable operation.

b.) Hardware Store Models

While offering a similar core product range, hardware stores can be differentiated by their setup and business model.

Here’s a concise list of hardware store types and their respective business models:

• Traditional Brick and Mortar: This is the most common setup, where the store is in a physical space. The revenue is generated primarily through in-store sales, often with the addition of services such as tool rentals or repair services.
• Franchise Model: Entrepreneurs buy into a known brand and follow their established business operations. The upfront investment is higher, but there’s the advantage of brand recognition and an established customer base.
• Online Hardware Stores: A purely digital presence where products are sold online and shipped to customers. The primary revenue is generated through online sales, potentially augmented by affiliate marketing or advertising.
• Specialty Stores: These stores focus on a particular niche within the hardware domain, e.g., only plumbing or electrical supplies. The business model often involves high expertise in the chosen niche and may offer specialty services related to the products.
• Warehouse-Style Stores: Larger than traditional hardware stores, these establishments operate on a bulk buying and selling model. They often offer a broader product range at competitive prices.
• Membership-Based Wholesale Stores: These cater primarily to professionals in the trade and require membership for shopping. The business model relies on annual membership fees and bulk sales.
• Mobile Hardware Vans: These are mobile stores, often catering to specific job sites or areas without a nearby hardware store. The model revolves around the convenience of bringing products directly to the customer.

Choosing a suitable business model from the beginning is crucial, as switching your model later is more challenging.

Identifying a business model that feels right for your hardware store is essential for a smooth and structured startup phase.

c.) Making Your Hardware Store Stand Out

• Specialized Knowledge: Staff should be well-versed in the products they’re selling. Free workshops on basic home repairs or DIY projects can create a loyal customer base that appreciates the extra value.
• Eco-Friendly Products: Dedicate a section to sustainable and eco-friendly products, showcasing your store’s environmental commitment.
• Innovative Displays: Use interactive displays that allow customers to test tools or see demonstrations of how certain products work.
• Loyalty Programs: Implement a points system or discounts for regular customers to encourage repeated business.
• Local Artisan Corner: Dedicate a corner for local artisans to display their hand-crafted items, turning part of your store into a mini marketplace.
• DIY Kits: Offer curated DIY kits with all the necessary items for specific projects, simplifying customer shopping.
• Customization Services: Offer paint-mixing stations where customers can choose custom colors or engraving services for tools.
• Seasonal Themes: Rotate product displays based on seasons or upcoming holidays, showcasing relevant products prominently.
• Interactive Mobile App: Develop an app to help users visualize their DIY projects, create shopping lists, or locate items within the store.
• Community Engagement: Host community events or sponsor local initiatives, making your store a recognized and respected part of the community.

d.) Add-ons for a Hardware Store

• Tool Rental Service: Not everyone wants to buy tools for one-time use. A rental service can cater to these customers and bring in additional revenue.
• Repair Services: Set up a corner where customers can bring damaged tools or equipment for repair.
• Home Improvement Consultation: Collaborate with interior designers or carpenters who can offer in-store consultations for home improvement or redesign projects.
• Delivery and Installation: Offer home delivery for bulky items. Add an option for professional installation, especially for complex equipment or fixtures.
• Recycling Point: Set up a point where customers can return used batteries, light bulbs, or old tools, emphasizing your commitment to sustainability.
• Workshop Spaces: Designate spaces where customers can attend workshops or even rent the space for their DIY projects if they lack space at home.
• Custom Wood Cutting: Offer wood cutting services where customers can get wood cut to their specified dimensions.
• Gardening Center: Expand into a gardening section where you offer plants, garden tools, and accessories. You could also offer landscaping consultation services.
• Coffee Corner: A small coffee shop or kiosk inside the store can be a welcome addition for customers looking to take a break.
• Gift Cards and Kits: Offer gift cards for those looking to gift shopping credits to others. Additionally, curated gift kits for DIY enthusiasts can be a hit during the holiday season.

In both endeavors – making your hardware store stand out and thinking of add-ons – it’s crucial to gauge the needs and preferences of your target audience.

Regularly collecting feedback and staying attuned to industry trends will aid in implementing the most effective strategies.

e.) Pros and Cons of Owning a Business

Owning a business brings both rewards and challenges. While many focus on the benefits, it’s essential to consider potential obstacles.

By understanding potential issues, you can anticipate and mitigate surprises, ensuring better preparedness.

For more, see Pros and Cons of Starting a Small Business.

f.) Challenges You Could Face When Starting and Operating a Hardware Store

Challenges When Starting a Hardware Store:

• Capital Investment : One of the primary challenges is securing enough capital. Opening a hardware store requires a significant investment in inventory, equipment, and a suitable location.
• Location Decisions : Finding the right location is crucial. It should be accessible in an area with potential customers but also consider competition proximity.
• Inventory Management : Deciding what products to stock can be daunting. Too much inventory can tie up funds, while too little can lead to missed sales opportunities.
• Supplier Relationships : A significant challenge is establishing reliable supplier connections to ensure a consistent stock of quality products.
• Licensing and Permits : Navigating local regulations, obtaining necessary licenses, and staying compliant with zoning laws can be complicated and time-consuming.
• Staff Hiring and Training : Recruiting the right team and ensuring they are adequately trained in customer service and product knowledge is essential for a positive store image.
• Competition : The market might already have established hardware stores, initially making it difficult to secure a customer base.

Challenges When the Hardware Store is in Full Operation:

• Customer Retention : Keeping customers loyal in a competitive market requires continuous effort in service, pricing, and product availability.
• Inventory Turnover : Efficiently managing inventory so that products aren’t sitting on shelves too long, thereby tying up capital, can be an ongoing struggle.
• Seasonal Demand Fluctuations : Hardware stores often experience seasonal variations in sales, which can challenge cash flow and inventory management.
• Operational Costs : Rising rent, utility bills, or supplier costs can erode profit margins if not monitored and adjusted for.
• Staff Turnover : The retail industry can have high turnover rates, leading to recurring hiring and training costs.
• Keeping Up with Trends : The hardware industry can evolve with new products and technologies. Keeping updated and stocking modern items is essential.
• Marketing and Promotions : Regularly devising effective marketing strategies to attract new customers while retaining the existing ones is a continual challenge.
• Regulatory Changes : Local or national regulations might change, requiring adaptations in operations or products.
• Unexpected Maintenance : Whether it’s a broken cash register or a malfunctioning HVAC system, unforeseen issues can arise that disrupt business and require unplanned expenses.
• Economic Fluctuations : Economic downturns can decrease consumer spending on home improvement and hardware items.

In conclusion, starting and running a hardware store comes with various challenges.

Whether in the startup phase or full operation, understanding potential pitfalls is crucial to navigating them effectively and ensuring the business’s longevity.

g.) Questions You Need to Consider for Your Hardware Store

Starting a hardware store can be a rewarding endeavor, but it requires meticulous planning and foresight.

By answering the following questions, you will prepare yourself for some of the issues you may encounter if you start your hardware store.

• Business Model : What type of hardware store model are you considering?
• Skill Set : Do you have the skills to manage and operate a hardware store?
• Workforce : Will you do all the work alone or hire employees? Do you intend to manage your business, or are you planning to hire a manager?
• Customer Acquisition : How will you get customers?
• Customer Retention : How will you keep customers coming back?
• Partnerships and Investment : Are you interested in finding partners or investors?
• Financing : How will you finance your startup costs?
• Profitability Timeline : Have you considered how long it will take to become profitable?
• Personal Finances : How will you support yourself during the early stage of operation, which can be financially challenging?
• Product Lineup : What products and services will you offer?
• Market Demand : How do you know people will want what you have to offer?
• Unique Selling Proposition : What will you provide to differentiate you from your competition?
• Positioning : How will you position your Hardware Store: High-End, Average, or discount operation?

These questions are fundamental starting points to evaluate your readiness and the viability of your hardware store venture.

3. Research

Inside information hardware store research.

Before embarking on your journey to start a hardware store, meticulous research is non-negotiable. Comprehensive information equips you with foresight, guarding against unforeseen setbacks.

One invaluable resource is the counsel of seasoned hardware store proprietors. Their experiential insights are reliable and enlightening, making time spent with them invaluable.

Identifying and approaching such individuals requires strategy and tact, topics extensively addressed in a dedicated article.

For a comprehensive guide on connecting with industry veterans, refer to An Inside Look Into the Business You Want To Start for all the details.

Supply, Demand, and Your Location

Determining market demand is a pivotal step before starting a hardware store, regardless of whether it is a physical location, an online venture, or a combination of both.

The absence of demand, irrespective of product quality or pricing, spells imminent business failure. A lack of demand equates to unsold inventory, unsustainable operations, and potentially insurmountable debts.

Competition Analysis:

Thoroughly analyze your competitors. Engaging with well-established competitors is an uphill battle unless you offer distinct and unparalleled services.

Maintaining a competitive edge becomes arduous if competitors can easily replicate your offers.

Location Choice for Physical Stores:

Ideally, your store’s location should be a confluence of ample demand and minimal competition.

While populated locations promise more foot traffic, ensuring the location’s rent or purchase cost doesn’t devour your potential profits is vital.

Conversely, while remote or less-populated areas might seem financially appealing, they might not offer the customer base needed for profitability.

Online Ventures:

In the digital realm, understanding market demand and competition is equally pivotal. Sole reliance on search engines for traffic in a saturated market might yield little to no visibility.

Simultaneously, traffic generation becomes a challenge if your product’s search volume is negligible.

Furthermore, international shipping considerations, like high costs and customs delays, become pertinent. Using local distributors in high-demand regions can be a solution.

Strategies to Determine Market Demand:

• Surveys and Questionnaires: Deploy these in your target area to measure interest.
• Analyze Competitor Sales: High sales figures in a region indicate demand.
• Local Trade Shows and Exhibitions: Engage with potential customers and get firsthand insights.
• Google Trends: Check for product search trends in specific regions.
• Use Analytics Tools: Employ tools like SEMrush or Ahrefs to identify the search volume for your products.
• Pilot Launch: Initiate a small-scale launch to assess demand before fully investing.
• Feedback from Local Communities: Engage with local forums and communities to ascertain interest and demand.

In conclusion, knowing your market’s pulse is instrumental for business longevity and success.

Whether you choose a brick-and-mortar approach, an online store, or both, a calculated understanding of demand and competition is non-negotiable.

For more, see the Demand for Your Products and Services and Choosing The Best Location for Your Business.

Target Audience

The benefits of understanding your target audience are profound. A comprehensive knowledge of your target market facilitates tailored products and services.

Instead of casting a wide net and offering an extensive range of products, you can zero in on precisely what your customers want, optimizing inventory and marketing efforts.

Target Market Ideas for a Hardware Store:

• Homeowners and renters undertaking DIY projects.
• Local contractors and builders.
• Landscapers and gardeners.
• Property management companies.
• Home improvement professionals.
• Interior designers.
• Local schools for craft and technical projects.
• Local businesses needing maintenance supplies.

For more, see How To Understand Your Target Market.

4. Looking at Financials:

Understanding the numbers and making good decisions is a crucial factor in succeeding.

You will struggle to manage a successful operation without putting in the time and effort to understand and monitor the financials of your hardware store.

Let’s look at startup costs, operating costs and profits.

Start-Up Costs:

Startup Cost:

Accurate estimation of startup costs is paramount for a smooth transition from planning to opening your hardware store.

Underestimation can lead to budget shortages, halting your startup, while overestimation portrays high risk.

Your costs hinge on factors like operation size, location, employee hiring, equipment type, and your online, rented, leased, or home-based business setup.

To estimate costs:

• List requisites and obtain their prices.
• Continual research might bring up overlooked expenses.

However, relying solely on sample estimates is not foolproof. No single source, including this, can provide precise costs—each business model is unique.

Operationally, online ventures are cost-effective, both in initiation and running. Whether it’s your primary operation or a home-based adjunct, it’s financially leaner than conventional brick-and-mortar setups.

For an accurate cost prediction, thorough research and obtaining precise estimates ensure that starting a hardware store is financially feasible for you.

Sample Startup Cost For a Hardware Store 

The purpose of the list below is to focus on the items in the list more than the numbers because these are general samples, and your figures will be different.

SAMPLE Estimated Startup Costs for a MID-Sized Hardware Store in the USA

Lease/Rent for Location

• 12-months lease (monthly costs may vary based on location and size)
• Lower Value: $3,000/month – Total: $36,000/year
• Upper Value: $5,000/month – Total: $60,000/year

Store Build-Out & Interior Setup

• Shelving, display counters, interior decor
• Lower Value: $10,000
• Upper Value: $50,000

Initial Inventory Purchase

• Tools, building materials, paint, plumbing supplies, electrical items, etc.
• Lower Value: $100,000
• Upper Value: $200,000

Point of Sale System & Software

• Lower Value: $1,000
• Upper Value: $5,000

Licensing and Permits

• Business license, special permits for certain products, etc.
• Lower Value: $500
• Upper Value: $2,000

Insurance (1st Year)

• Liability, property, workers’ compensation (if hiring from start)
• Lower Value: $3,000
• Upper Value: $7,000
• Outdoor sign, indoor branding, department signs
• Upper Value: $10,000

Marketing & Promotion

• Grand opening advertising, flyers , initial online ads, etc.
• Lower Value: $5,000
• Upper Value: $15,000

Fixtures & Equipment

• Cash registers, security system, trolleys, etc.
• Lower Value: $15,000
• Upper Value: $30,000

Professional Fees

• Accountant, lawyer for setting up the business structure
• Lower Value: $2,000
• Upper Value: $6,000

Miscellaneous & Contingency

• Unexpected costs and other minor expenses

TOTAL ESTIMATED STARTUP COSTS:

• Lower Value Total: $180,500
• Upper Value Total: $400,000

Note: These values are SAMPLE estimates and can vary based on a myriad of factors, including the specific location within the USA, current market conditions, and specific choices made by the business owner.

For more, refer to my article on Estimating Startup Costs.

Monthly Operating Costs:

Monthly operational costs for a hardware store can vary considerably based on numerous factors.

For instance, operating solo or with an entire staff can significantly shift monthly expenditures. Your location choice also plays a role: prime, high-traffic areas have a heftier price tag than less frequented spots.

Additional variances may arise from loan repayments, ambitious marketing endeavors, unforeseen repairs, etc. The concept is that numerous elements dictate your monthly outgoings.

Maintaining minimal expenses is pivotal to ensuring smooth business operations and managing revenue dips. However, curbing costs shouldn’t compromise quality, service, or efficiency.

SAMPLE list of estimated monthly expenses for a MID-sized hardware store

Again, the purpose of the list below is to focus on the item in the list more than the numbers. The numbers are a general idea, and your numbers and list will differ. 

Sample Monthly Expenses for a Mid-sized Hardware Store in the USA:

• Upper Value: $1,200
• Lower Value: $12,000
• Upper Value: $20,000
• Upper Value: $3,500
• Lower Value: $800
• Upper Value: $1,500
• Upper Value: $3,000
• Upper Value: $25,000
• Lower Value: $300
• Upper Value: $1,000
• Lower Value: $200
• Upper Value: $500
• Miscellaneous (unexpected expenses, equipment replacement, etc.):

Total Monthly Expenses:

• Lower Value: $29,300
• Upper Value: $63,700

(Note: These values are hypothetical and can vary based on location, business decisions, market conditions, and other factors. Always consult with a financial expert when budgeting for a business.)

Looking at Profits

Understanding profit margins is crucial, but operational decisions largely determine your net profit. High overhead costs can substantially reduce profits, even with impressive sales figures.

Accurately estimating the profit of a hardware store is challenging due to myriad variables.

The setup, management style, and operational nuances are unique to each business, making the owner the most suitable person to estimate potential profits.

Your store’s high-end, standard, or discount positioning will directly affect your profit margin.

To get an idea of potential earnings, calculate the cost per sale, estimate monthly sales, and subtract your overhead.

Your sales strategy is also pivotal. A high-profit-per-item approach may fall short if sales volume is low.

Conversely, a strategy based on high volume with smaller profit margins demands ensuring each sale covers costs and still turns a decent profit.

For More, See Estimating Profitability and Revenue.

Final Thoughts on Financials 

The financial health of a hardware store is a critical component of its operational success.

Beyond the requisite tracking and recording of transactions for legal and tax obligations, there’s immense value in actively analyzing these financials.

You can discern underlying trends and patterns by consistently monitoring profits and expenses and generating insightful reports.

For instance, if there’s a noticeable dip in weekly sales, it prompts a deeper dive. Did market dynamics shift? Is there an issue with your product line or service quality? Has a new competitor emerged in the locality?

A passive approach to your hardware store’s finances can be perilous. When issues become overtly evident, rectifying them might be challenging, if not impossible.

Monitoring and proactive analysis of your financials can preempt potential problems, allowing for timely intervention.

Consider revisiting Step 3. Researching your hardware store , where there is a technique to get inside information, will benefit you in this step.

5. Create Your Mission Statement

A mission statement is pivotal in clearly defining the overarching purpose and objective of your business.

It acts as a compass, guiding every action and decision by highlighting the core values and primary goals.

For a business owner, it provides clarity, ensuring the organization remains aligned with its foundational principles.

It communicates the chief benefit they can expect from the business for customers and the community.

Examples of a mission statement for a hardware store:

• “Empowering communities by providing high-quality tools and resources for every home project.”
• “Delivering trust, reliability, and expertise in every product, every time.”
• “Bridging the gap between ambition and accomplishment with the right hardware solutions.”
• “Your neighborhood partner in building dreams and fixing challenges.”
• “Commitment to quality, service, and community – one tool at a time.”

For more, see How To Create a Mission Statement.

6. Creating A Unique Selling Proposition (USP)

A Unique Selling Proposition (USP) pinpoints the distinct advantage or characteristic that makes a business stand out from its competitors.

Businesses must identify their USP, as it differentiates them in the market and communicates to customers the primary reason they should patronize that specific business over others.

A strong USP can command attention, foster customer loyalty, and drive sales, making it an essential aspect of a business’s strategy.

Examples of a USP for a hardware store:

• “Get expert advice with every purchase – we hire professionals, not just salespeople.”
• “24-hour delivery guarantee or your money back.”
• “An unmatched range of eco-friendly tools and products for the conscious builder.”
• “Every tool rented is a tree planted – building with a cause.”
• “Specializing in rare and hard-to-find hardware parts – if we don’t have it, it doesn’t exist.”

7. Choose a Business Name

When selecting your business name, prioritize a memorable and pertinent name to the hardware industry. It should be easy to pronounce and evoke the trustworthiness and reliability customers expect from a hardware provider.

The long-term impact of your chosen name cannot be overstated, as it’s a moniker you’ll likely carry throughout your business’s existence.

Furthermore, a congruent domain name is crucial when establishing an online presence. It’s essential to ensure your desired name isn’t already in use by another entity.

Here Is a List of Sample Hardware Store Names:

• BuildMate Hardware
• UrbanEdge Tool Supply
• ProCrafters Hardware Hub
• TrueBlue Builders’ Mart
• MetroMend Hardware Haven
• CityScape Tool Center
• EverBuild Hardware Emporium
• PrimeGrade Tool Supply
• FirstPick Builders’ Boutique
• HandyHive Hardware House
• PinnaclePro Hardware Haven
• UrbanNest Tool Supplies
• EliteEdge Hardware Outlet
• CraftedCave Hardware Hub
• SolidStone Tool Supply
• ToolTrust Hardware Co.
• ModernMend Hardware Market
• TrustTech Tool Mart
• MetroMaster Hardware Shop
• Builder’s Bliss Tool Center
• PeakCraft Hardware Point
• UrbanElite Tool and Fix
• EnduraEdge Hardware Solutions
• BuilderBuddy Mart
• Craftsmen’s Corner
• EverTrust Hardware Center
• CityCrafters Tool and Supply
• PureCraft Hardware Shop
• ToolTrend Hardware Boutique
• BuildNest Hardware Solutions.

For more, see the following articles:

• How To Register a Business Name
• Registering a Domain Name For Your Business

8. Register Your Company

Ensuring the legality of your business is paramount before starting operations. Failure to adhere to local, state, and federal regulations can lead to penalties, fines, or even a business shutdown.

Consulting a legal professional or business advisor is highly advisable to ensure compliance and maximize tax benefits and liability protection.

These experts can provide guidance tailored to your unique business model and location.

Common Types of Registrations for a Hardware Store:

• Business Entity Registration (LLC, Corporation, Sole Proprietorship)
• Employer Identification Number (EIN)
• Sales Tax Permit
• Doing Business As (DBA) Name

Permits and Licenses to Consider for a Hardware Store:

• Business License: Required to operate legally within your municipality.
• Sales Tax Permit: Necessary for selling goods in most states.
• Sign Permit: If you’re putting up signage outside your store.
• Health and Safety Permits: Ensuring the safety of your customers and employees.
• Home Occupation Permit: If running a part of your business from home.
• Seller’s Permit: Depending on your state, this may be necessary for retail operations.
• Fire Department Permit: Required if you handle flammable materials.
• Environmental Permits: If dealing with hazardous materials.

Registration:

• How to Register Your Business
• How To Register a DBA
• How to Register a Trademark
• How to Get a Business License

Business Structures:

• How to Choose a Business Structure
• Pros & Cons of a Sole Proprietorship
• How To Form an LLC
• How To Register a Business Partnership
• How To Form a Corporation
• How To Choose a Business Registration Service

9. Create Your Corporate Identity

A Corporate ID, or Corporate Identity, is a cohesive visual representation of your business. It includes your logo, business cards, website, business signage, stationery, and promotional materials.

These components collectively present a consistent and professional image to prospective and existing customers.

This uniformity not only builds brand recognition but also instills trust and credibility in the eyes of your clientele.

You can see our pages for an overview of your logo , business cards , website , and business sign , or see A Complete Introduction to Corporate Identity Packages.

10. Writing a Business Plan

A Business Plan Is Essential:

A business plan is a foundational tool for startups, critical for securing financing and attracting investors.

Beyond these initial uses, it serves as a roadmap, guiding you through establishing and growing your business.

It Takes Time and Effort to Create an Effective Business Plan:

Crafting a business plan demands both time and diligence. It visualizes your future business, requiring careful thought and articulation.

The investment in time pays off, offering clarity on startup requirements and operational strategies.

Options Are Available:

There’s flexibility in how you approach your business plan. You can start from zero, employ a professional, use predefined templates, or leverage business plan software.

Regardless of the method, your active involvement is paramount. Engaging an expert ensures your vision and operational ethos are effectively conveyed.

There Is a Good Chance That Your Business Plan and or Operations Will Change:

A business plan is not set in stone. With growing experience and evolving market conditions, adjustments might be necessary.

Business Plan Template for a Hardware Store

Executive Summary

• Introduction: Briefly describe the hardware store, location, and target audience.
• Mission Statement: Convey the store’s core purpose and its benefit to the community.
• Objectives: Outline short and long-term goals, e.g., reaching X sales in the first year.

Business Description

• Nature of the Business: Elaborate on the hardware store’s primary operations and products/services.
• Industry Background: Discuss current trends, market size, and growth potential.

Market Analysis

• Target Market: Describe your ideal customers, demographics, and buying patterns.
• Competitive Analysis: Analyze the strengths and weaknesses of competitors and your store’s unique selling proposition.

Marketing and Sales Strategies

• Product/Service Strategy: Detail your range of products or services.
• Pricing Strategy: Explain your pricing model, considering market demand and competitor prices.
• Promotion and Advertising: Outline plans for advertising, promotions, and customer loyalty programs .

Organizational Structure

• Management Team: Highlight key team members, roles, and experiences.
• Employee Roles: Describe roles, responsibilities, and potential salaries.

Operational Plan

• Location: Discuss the location, considering factors like customer accessibility and rental costs.
• Suppliers: List major suppliers and backup options.
• Inventory Management: Describe the process for inventory control, restocking, and minimizing waste.

Financial Projections

• Startup Costs: Break down initial costs like inventory, licensing, and location setup.
• Sales Forecast: Project monthly sales for the first year, considering seasonal fluctuations.
• Profit and Loss Statement: Provide a monthly P&L projection for the first year.
• Break-Even Analysis: Calculate the point where the business will start making a profit.

Legal Considerations

• Business Structure: Determine whether the store will operate as a sole proprietorship, partnership, LLC, etc.
• Licenses and Permits: List required local, state, and federal permits.
• Insurance: Describe the types of insurance needed, e.g., liability, property, workers’ compensation.

• Resumes: Attach resumes of key management team members.
• Supplementary Data: Include any additional information or studies that support the business plan.

Suggestions:

As you populate each section, remember to provide realistic data, backing claims with research where possible.

For financial projections, consider seeking assistance from an accountant familiar with the retail industry.

The more thorough and fact-based your business plan is, the more effective it will be for decision-making and securing investments.

See How to Write a Business Plan for information on creating your business plan.

11. Banking Considerations

Choosing a local bank that prioritizes small businesses can be advantageous.

A business account segregates personal and business transactions, simplifying expense tracking and accurate report generation for tax purposes.

Building a professional rapport with your banker can provide valuable insights and facilitate access to financial services.

Additionally, a merchant account or online service to process credit and debit card transactions is imperative, enhancing sales by offering convenience to customers.

For more, see How to Open a Business Bank Account. You may also want to look at What Is a Merchant Account and How to Get One.

12. Getting the Funds for Your Operation

Various options exist when seeking financing for your hardware store, including traditional banks, private loans, securing investors, or liquidating personal assets.

Additionally, government grants tailored for startups might be available to assist in your endeavor.

Considerations When Meeting a Loan Officer:

• Be punctual and professional.
• Research and understand the bank’s lending criteria.
• Be prepared to articulate your business plan and vision.
• Anticipate questions regarding the loan’s purpose and amount.
• Be honest about potential risks and your mitigation plans.

Sample List of Documents Needed for a New Business Loan:

• Detailed business plan.
• Personal financial statement.
• Credit report.
• Cash flow projections for at least a year.
• Personal and business income tax returns.
• Resumes of key business personnel.
• Legal documents: business licenses, articles of incorporation, franchise agreements, if applicable.
• Collateral documentation if required.

For more, see the following:

• Getting a Small Business Loan
• SBA Small Business Grants
• Search: Hardware Store Start-up Loans
• Search: Grants For a Hardware Store

13. Software Setup

Selecting the right software from the outset is crucial for your hardware store. Implementing a system initially is more straightforward than transferring data between different platforms later.

Always opt for established software companies to ensure future support.

Use demos when offered to get a feel of the system before investing.

Peruse software reviews and forums to gain insights into others’ experiences. For accounting purposes, consult your bookkeeper or accountant to select the best software tailored to your needs.

Types of Software a Hardware Store Owner Might Use:

• Inventory Management Software: To track and manage stock levels.
• Point of Sale (POS) System: For processing sales and transactions.
• Accounting Software: For managing financials and taxes.
• Employee Scheduling Software: To handle staff shifts and hours.
• Customer Relationship Management (CRM) Software: For managing customer interactions.
• E-commerce Platform: If offering online sales.
• Security Software: To protect against theft and unauthorized access.
• Supply Chain Management Software: To manage supplier relationships and orders.

Check out Google’s latest search results for software packages for a hardware store.

14. Get The Right Business Insurance

Ensuring your hardware store is adequately insured is paramount, as unforeseen incidents can occur without warning.

The right insurance safeguards your business assets and the well-being of customers, employees, and visitors on site.

Professional liability insurance can shield you from potential lawsuits arising from operational mishaps.

Moreover, Interruption Insurance can prove invaluable, providing financial support if an unexpected event forces your business to close temporarily.

Engaging a skilled insurance broker is advisable to navigate the complexities of insurance policies, ensuring you obtain comprehensive coverage tailored to the unique risks of running a hardware store.

For more, see What to Know About Business Insurance . You can also browse the latest Google search results for hardware store insurance .

15. Suppliers and Service Providers

Choosing suitable suppliers and service providers is foundational for a hardware store.

Dependable suppliers ensure consistent inventory, enabling smooth operations and satisfied customers.

Securing competitive prices from them can enhance your profit margins, benefiting the business and its clientele. A symbiotic relationship, where both parties benefit, promotes longevity and trust.

Items and Services from Suppliers:

• Power tools and hand tools
• Paints and solvents
• Fasteners (nails, screws, bolts)
• Lumber and building materials
• Electrical and plumbing supplies
• Gardening tools and supplies
• Safety equipment
• Cleaning products

Services from Providers:

• Equipment maintenance and repair
• Point-of-sale system services
• Delivery and logistics
• Shelving and storage solutions
• Marketing and promotional materials
• Professional training for employees

Maintaining mutual respect and ensuring financial advantages for both parties solidifies the business relationship, ensuring steady support when needed.

For More, See How To Choose a Supplier.

16. Setting Prices

Thoroughly researching pricing when initiating a hardware store is pivotal. Appropriate pricing not only influences your profit margins but also dictates market positioning. Overpricing may deter potential customers, rendering you uncompetitive.

On the other hand, underpricing, while potentially increasing customer volume, can endanger sustainability by diminishing profits and potentially preventing you from covering operational expenses.

Striking a balance is paramount. This involves understanding the market landscape, competitor pricing, and the intrinsic value of your products and services.

A well-calculated price should reflect the current market conditions and the distinct value your hardware store provides, ensuring profitability and market relevance.

See the following for more:

• Setting the Price of Your Products and Services
• Search Results for Pricing Strategies for a Hardware Store.

17. Physical Setup

Inventory Management:

Effective inventory management is paramount to success in the realm of hardware stores.

This entails a careful balance between purchasing and displaying products that customers genuinely desire instead of trying to push items that hold little appeal.

The primary objective here is to offer a diverse range of products that augment the value proposition for your clientele.

Controlling your inventory quantity is the fine line to tread in this aspect. An excess of stock can lead to financial resources being tied up unnecessarily, which could be better allocated elsewhere in your business.

Conversely, insufficient inventory will result in missed sales opportunities. Therefore, meticulous inventory control is a requisite for any hardware store owner.

Strategic Product Display:

How you present your products is just as significant as what you choose to stock.

To maximize sales, it is essential to strategize your product displays. Experimentation and record-keeping of various display setups will help pinpoint the most effective methods.

Expiry Dates Consideration:

While managing inventory, be mindful of expiry dates, particularly for items subject to such constraints.

Avoid stocking products with impending expiration dates, as these can lead to losses due to unsold goods. Striking the right balance here is key to minimizing waste while satisfying customer demand.

Layout and Setup:

The layout and setup of a hardware store play a pivotal role in customer experience. Ensure that your store is organized logically, with products categorized sensibly.

This facilitates ease of navigation for customers and helps them quickly find what they need. Adequate signage and labeling can enhance the overall shopping experience.

Signage Placement:

A well-thought-out signage strategy is integral to your hardware store’s professionalism. Your main business sign should be prominent and easily visible from a distance, serving as a beacon for potential customers.

Additionally, directional signs in parking lots, clear exit signs, and specialized area markers contribute to a seamless shopping experience. These signs aid customers and demonstrate your commitment to professionalism and customer service.

Office Organization:

Running a hardware store is time-consuming and necessitates a well-organized office space. An efficient office setup enhances your productivity by effectively managing various aspects of your business, such as inventory tracking, financial management, and customer service.

Equip your office with the necessary tools, technology, and supplies to ensure smooth operations.

In conclusion, the hardware store business demands meticulous attention to inventory, product display, expiry dates, layout, signage, and office organization.

Striking the right balance and optimizing each aspect is essential for long-term success and customer satisfaction in this industry.

See Here are Considerations for The Setup of Your Office for tips and ideas to make your office work for you. Also, have a look at our article About Company Signs.

18. Creating a Website

A website is an essential asset for your hardware store, serving as the primary point of contact with potential customers.

Unlike a social media account, a website is under your ownership and control when you host and register a domain name. This freedom allows you to convey crucial information about your business.

Furthermore, your website can be a potent marketing tool. By regularly blogging about your industry and offering valuable tips and insights tailored to your customer base, you can earn their trust and establish yourself as an industry expert.

This enhances your credibility in their eyes, potentially translating into increased patronage. In today’s digital age, a well-maintained website is an indispensable tool for the growth and success of your hardware store.

For more, see How to Build a Website for Your Business .

19. Create an External Support Team

An external support team for your hardware store is a dependable group of professionals who offer advice and services crucial to your business.

It’s essential to clarify that these individuals are not on your payroll but are engaged as needed.

You can utilize their services for various purposes, including specific projects, tasks on a contractual basis, hourly rates, or even retainers.

While you may already collaborate with some of these professionals, acknowledging them as part of your team underscores their significance and opens the door to potentially expanding your network.

It’s unnecessary to assemble this team all at once, as building strong professional relationships takes time, but it’s an ongoing effort.

Your team can comprise experts such as accountants, lawyers, financial advisors, marketing specialists, technical advisors, and consultants.

Cultivating this support network ensures you have reliable resources to turn to when your hardware store needs their expertise.

For more, see Building a Team of Professional Advisors for Your Business.

20. Hiring Employees

Running your hardware store alone in its early stages can help control costs, as payroll is a substantial expense during startup.

However, the workload may become overwhelming as your business expands, necessitating employee hires.

It’s crucial to focus on recruiting qualified individuals with strong work ethics who fit their respective roles.

The following are job positions or outsourced services you may want to consider as your hardware store grows:

• Store Manager
• Sales Associates
• Inventory Manager
• Purchasing Manager
• Marketing Specialist
• Customer Service Representatives
• Warehouse Staff
• Accounts Manager
• Maintenance and Repair Personnel
• Delivery Drivers
• Security Personnel
• Cleaning and Maintenance Services
• Legal and Financial Advisors
• External Accountant/Bookkeeper

Expanding your workforce strategically is vital for maintaining efficient operations and catering to the evolving needs of your growing hardware store.

For more, see How and When to Hire a New Employee.

21. Getting Customers Through the Door

When you have reached this step, your business is set up and ready to go, with one more final step, which is important: getting customers through the door.

There are numerous ways to do this, like advertising, having a grand opening , word of mouth, etc.

Let’s dig a little deeper into the following sections.

Marketing Considerations

A hardware store without customers is merely a premise. Success hinges on attracting the right clientele, which can be challenging initially as your operation is new and relatively unknown.

Building a solid reputation over time will make this endeavor more manageable and bolster your marketing prowess.

Marketing your hardware store is an ongoing effort. The more you invest in effective marketing strategies, the greater your revenue potential.

While you don’t always need a marketing agency or expert, it’s an option worth exploring when the right fit arises.

Simplify your marketing approach by considering it as a means to raise awareness about your business, seizing opportunities as they come.

Simple Methods to Promote Your Hardware Store:

• Local Advertising: Utilize local newspapers, radio, or online classifieds to announce your store’s presence.
• Social Media: Create and maintain active social media profiles to engage with potential customers.
• In-Store Promotions: Offer special discounts or promotions to attract foot traffic.
• Networking: Attend local business events and join community organizations to establish connections.
• Customer Referral Program: Encourage satisfied customers to refer others to your store in exchange for rewards.
• Flyers and Direct Mail: Distribute flyers or postcards in your neighborhood to promote special offers.
• Online Listings: Ensure your store is listed on online directories and review platforms like Google My Business.
• Partnerships: Collaborate with complementary local businesses to cross-promote each other.
• Community Involvement: Participate in community events, sponsor local initiatives or host workshops.
• Signage: Invest in clear and eye-catching store signage to attract passersby.

Implementing these methods can help raise awareness of your hardware store and draw in the right customers.

See How To Get Customers Through the Door and our marketing section to provide ideas to help you bring awareness to your business.

Sample Ad Ideas:

Display Ad 1:

Headline: “Upgrade Your Home with Quality Tools!” Unleash your DIY potential at [Store Name] – Your Trusted Hardware Store. Find top-notch tools and expert advice for your home improvement projects today.

Display Ad 2:

Headline: “Save Big on Hardware Essentials!” Discover unbeatable deals on hardware essentials at [Store Name]. From nuts and bolts to power tools, we’ve got you covered for all your DIY needs.

Display Ad 3:

Headline: “Turn Your Projects into Masterpieces!” Transform your ideas into reality with premium hardware from [Store Name]. Visit us now for the tools and supplies that make dreams come true.

Display Ad 4:

Headline: “Your Hardware Store, Your Solutions!” Get the right solutions for every project at [Store Name]. We’re here to equip you with quality products and expert guidance.

Display Ad 5:

Headline: “Find Inspiration in Aisle A, Innovation in Aisle B!” Visit [Store Name] for an unmatched selection of hardware and tools. Explore endless possibilities for your next home project today.

To expand your customer base and forge valuable partnerships, collaborating with complementary businesses through referral programs can be a strategic move.

Here are some types of businesses you could approach for potential partnerships, along with ways you can structure mutually beneficial arrangements:

• Offer a referral fee for contractors who recommend your hardware store to their clients for purchasing materials and tools. In return, you can refer your customers to their services, strengthening both businesses.
• Real estate agents often encounter homeowners in need of home improvement supplies. Establish a referral program where they refer their clients to your store for any necessary repairs or upgrades and reciprocate by referring customers looking for new homes or renovations.
• These professionals have a consistent need for plumbing and electrical supplies. Provide them with a discount on their purchases in exchange for referring their clients to your store for additional hardware needs.
• Collaborate with interior designers by offering a referral fee when they recommend your store for home improvement projects. You can also refer your customers to their design services for a comprehensive home makeover.
• Create a symbiotic relationship with landscaping businesses. They can send customers your way for outdoor hardware and gardening supplies, and you can refer your customers to their landscaping services.
• Partner with home insurance companies and offer home safety and maintenance supplies discounts to their policyholders. In return, they can promote your store as a trusted source for these products.
• Home inspectors can refer home buyers or sellers to your store for repair or maintenance materials. You can refer your customers to their inspection services to ensure the quality of their homes.
• Collaborate with kitchen and bath showrooms to cross-promote your products. They can refer customers needing hardware and tools for remodeling, while you can recommend their showroom for fixtures and appliances.
• Establish a reciprocal arrangement with building supply companies, referring clients to each other based on specific needs. This can create a network of businesses catering to different construction and renovation aspects.
• Handyman Services:
• Partner with local handyman services, offering discounts on supplies in exchange for referring their clients to your store. You can also direct your customers to their services for minor repairs and installations.

Approaching these businesses with well-structured referral programs can foster mutually beneficial relationships, expand your customer base, and create a network of trusted partners in the home improvement industry.

Remember to clearly outline the terms and benefits of the partnership to ensure its success.

Points To Consider

Next, let’s review essential points for more tips, insights, and considerations before starting your hardware store.

We will cover sections, including skills to consider, points to focus on, and equipment. Then you’ll reach the “Knowledge Is Power,” section, where you will want to use the resources for valuable information.

Hours of Operation:

Hours of Operation: Consider operating your hardware store during the following hours:

• Monday to Saturday: 8:00 AM – 6:00 PM
• Sunday: 10:00 AM – 4:00 PM

Tasks Outside Regular Hours: Certain tasks may require additional time before and after regular hours:

• Inventory Management: Allocate 1-2 hours before opening and after closing for stock assessment and restocking.
• Maintenance: 1 hour daily for store upkeep.
• Bookkeeping: Weekly, allocate 2-3 hours post-closing for financial record-keeping.
• Marketing: Periodically, allocate time for marketing planning and online updates.

Equipment and Supplies

A List of Equipment and Supplies to Consider for a Hardware Store:

Setting up a hardware store requires various equipment and tools to facilitate operations. Here is a comprehensive list of essential equipment and items you may need:

• Shelving Units: To display and organize products efficiently.
• Cash Registers or Point-of-Sale Systems: For processing transactions.
• Shopping Carts and Baskets: For customer convenience.
• Display Racks: To showcase merchandise effectively.
• Security Cameras and Surveillance Systems: To deter theft and enhance security.
• Computer Systems: For inventory management and administrative tasks.
• Label Printers: To create price tags and labels.
• Pricing Guns: For quick and accurate labeling.
• Barcode Scanners: To streamline inventory tracking.
• Handcarts and Dollies: For moving heavy items.
• Pallet Jacks: For handling bulk shipments.
• Scales: To weigh bulk products.
• Locks and Safes: To secure cash and valuable inventory.
• Office Furniture: Desks, chairs, filing cabinets, etc.
• Phones and Communication Equipment: For customer service and inquiries.
• Signage: Exterior and interior signage for branding and directions.
• Lighting Fixtures: To ensure adequate in-store lighting.
• Power Tools: For store maintenance and assembly.
• Ladders and Step Stools: For accessing high shelves.
• Cleaning Supplies: To maintain store cleanliness.
• Fire Extinguishers and Safety Equipment: For safety compliance.
• First Aid Kits: For emergencies.
• HVAC System: Heating, ventilation, and air conditioning for customer comfort.
• Restroom Facilities: To provide convenience to customers and staff.
• Trash and Recycling Bins: For waste disposal.
• Paint Mixing Station: If offering paint products.
• Key Cutting Machine: For offering key-cutting services.
• Shelving Accessories: Hooks, brackets, dividers, and pegboards.
• Store Fixtures: Display cases, bins, and hangers.
• Shopping Bag Dispensers: For customer use.
• Price Checking Stations: To allow customers to verify prices.
• Shopping Cart Corrals: For cart collection and organization.
• Loading Dock Equipment: If handling larger deliveries.
• Material Handling Equipment: For moving bulk materials.
• Inventory Management Software: To track and manage stock efficiently.
• Safety Signs: For indicating hazards and safety instructions.
• PPE (Personal Protective Equipment): For staff and customer safety.
• Cash Handling Supplies: Money trays, coin rolls, and cash bags.

The specific equipment you’ll need may vary based on the size and focus of your hardware store, but this comprehensive list should serve as a good starting point for your hardware store setup.

Key Points To Succeeding in a Hardware Store

Succeeding in the operation of a hardware store is a multifaceted challenge that demands careful attention to various key points:

• Focusing on a Niche: Specialization can set your hardware store apart. Concentrate on a particular niche, such as tools, building materials, or home renovation , to attract a specific customer base.
• Building a Customer Base: Establishing a loyal customer base is challenging during startup. Offer exceptional products and services to entice early patrons.
• Building Relationships: Forge strong connections with customers, suppliers, and employees. Nurture these relationships as they are vital for long-term success.
• Providing Desired Products and Services: Stock products and services that cater to your customers’ needs and preferences. Regularly solicit and act upon customer feedback.
• High-Level Customer Service: Prioritize exceptional customer service, as your customers are the lifeblood of your business. Go above and beyond to meet their needs.
• Providing Value: Consistently offer value to your customers through competitive pricing, quality products, and knowledgeable staff.
• Hiring the Right Team: Assemble a competent and dedicated team. The right personnel are instrumental in your business’s triumph.
• Effective Staff Management: Treat your staff respectfully and promote a healthy work environment. Effective management and teamwork enhance staff retention.
• Managing Cash Flow: Vigilantly manage your finances to ensure a healthy cash flow sustains your business operations.
• Cost Control: Keep costs in check without compromising product quality or customer service.
• Adapting to Change: Embrace change, whether it involves industry trends, business processes, or technology advancements. Adaptation is critical to staying relevant.
• Handling Revenue Fluctuations: Develop strategies to navigate revenue fluctuations, including seasonal variations.
• Competition Management: Effectively address competition by differentiating.
• Effective Marketing: Invest in effective marketing strategies to increase awareness of your hardware store. Whether you handle it in-house or hire professionals, marketing is essential for attracting customers.

Operating a hardware store requires meticulous attention to detail and a commitment to ongoing improvement.

Success hinges on balancing customer satisfaction, efficient operations, financial stability, and adaptability to industry changes.

Addressing these critical points, you can position your hardware store for enduring success in a competitive marketplace.

It’s vital to assess your skill set when running a hardware store. Ensure you possess the necessary skills or consider learning them.

If a crucial skill is lacking, hiring someone with expertise in that area is an option.

Essential Skills for a Hardware Store Owner:

• Product Knowledge: A deep understanding of hardware and construction materials.
• Customer Service: Excellent interpersonal and communication skills.
• Inventory Management: Ability to manage stock efficiently.
• Financial Management: Budgeting, accounting, and financial analysis.
• Marketing: Strategies to promote the business.
• Team Management: Leadership and personnel management.
• Technical Skills: Familiarity with hardware tools and equipment.
• Problem-Solving: Quick decision-making and creative solutions.
• Adaptability: Staying updated with industry trends and technology.
• Negotiation: Effective negotiation with suppliers and customers.

Knowledge Is Power if You Use It!

Knowledge, when applied, empowers businesses. Explore industry-specific information via the provided links for startup guidance and sustained operational success.

Trends and Statistics

Analyzing industry trends and statistics offers foresight, aids strategic planning, and positions hardware stores for market success.

See the latest search results for trends and statistics related to the hardware stores industry.

Hardware Store Associations

Trade associations provide industry news updates and valuable networking opportunities, offering members a competitive edge.

See the search results related to hardware store associations and the benefits of Joining the Chamber of Commerce.

The Top Hardware Stores

Studying established hardware stores reveals industry gaps, competitive advantages, and potential oversights for new entrants.

See the latest search results for the top hardware stores.

The Future of the Hardware Stores Industry

Researching the industry’s future aids in understanding market trends, ensuring informed decisions and strategic positioning for a new hardware store.

See the search results for the future of the hardware store industry.

Find a Hardware Store For Sale

Purchasing an existing business carries its advantages and drawbacks.

Benefits of acquiring an established hardware store:

• Immediate revenue generation upon acquisition.
• Avoidance of initial startup challenges.
• Established operational procedures.
• Transparent financial data, including revenue, profit, and expenses.
• Instant access to a pre-existing customer base.
• Benefits from an already established reputation.
• A higher purchase price is often due to goodwill, accounting for the established customer base.
• Altering operational processes may alienate existing customers.
• Acquisition includes both the positive and negative reputation of the business.

While a perfect hardware store might not be on sale, exploring the broader industry for potential acquisitions remains worthwhile.

Prospective buyers can venture into the provided link to discover available opportunities in the sector.

The latest search results for a hardware store for sale and others in the same category.

Franchise Opportunities Related to a Hardware Store

Owning a hardware store franchise warrants consideration before business initiation. Exploring such opportunities might introduce unforeseen prospects within the hardware domain.

• Adopt a tried-and-true business model provided by the franchisor.
• Leverage an established reputation and benefit from existing marketing.
• Obtain comprehensive knowledge about the operational aspects upfront.
• Receive consistent support from the franchise’s corporate office.
• Initial and ongoing costs can be high.
• Restrictions on implementing significant changes without the franchisor’s consent.
• Limited to approved products or services.
• Must strictly adhere to the franchise agreement’s stipulations.
• Periodic franchise fees are a recurring expenditure.

While a perfect match may not always be available, exploring franchises within the broader industry might prove beneficial.

Seek related franchise opportunities in the given industry through the specified link.

See the latest search results for franchise opportunities related to this industry.

Customer Expectations

Examining search results on customer expectations offers insight into hardware store shopping experiences.

It reveals potential oversights and opportunities to exceed expectations. Ensure all aspects are addressed.

See the search results related to customer expectations for a hardware shopping experience.

Expert Tips

Expert tips benefit all skill levels. Experts discover refined methods, while novices gain foundational knowledge and skill enhancement.

See the latest search results for hardware sales to gain tips and insights.

Hardware Store Insights

Reviewing tips and insights aids in identifying best practices and pitfalls for hardware stores, enhancing industry knowledge.

See the latest search results about insights into running a hardware store.

Hardware Stores Publications

Publications provide essential updates and ideas on hardware stores, ensuring you remain informed on industry trends.

See the search results for hardware store publications.

Hardware Stores Forums

Visit hardware store forums to engage in industry discussions. Gain insights from customer perspectives to understand their needs.

See the latest search results related to hardware store forums.

Online or local courses enhance skills and knowledge, benefiting your hardware store.

See the latest courses that could benefit a hardware store owner . Also, see our management articles for tips and insights for managing your business.

Hardware Store Blogs

Subscribe to leading hardware blogs. Filter out inactive or non-valuable ones. Achieve a refined, informative blog collection.

Look at the latest search results for top hardware blogs to follow.

Hardware Stores News

Consult news outlets for current media coverage on hardware stores. Stay informed.

See the latest results for hardware store news.

Explore YouTube for hardware store insights. Enhance your knowledge by clicking the link below.

YouTube videos related to hardware stores.

Privacy Overview

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This controversial report may shock you but the truth needs to be told.

If you’ve been struggling online this report will open your eyes.

Click Here to download this Free Report While it’s available!

How To Write a Business Plan for Hardware Store in 9 Steps: Checklist

By alex ryzhkov, resources on hardware store.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

If you're considering opening a hardware store in the US, you've chosen a promising industry to enter. The hardware retail market has been steadily growing, with a projected revenue of $44 billion in 2021, representing a 3.4% increase from the previous year. With the right business plan in place, you can maximize your chances of success in this thriving market. In this blog post, we'll guide you through the nine essential steps to write a business plan for a hardware store that stands out from the competition.

Step 1: Conduct market research to identify trends, consumer preferences, and potential niche markets that your hardware store can tap into. Understanding the demand and supply dynamics of the industry will help you make informed decisions as you navigate the market.

Step 2: Identify your target market and competition . Determine who your ideal customers are and analyze the existing hardware stores in your area. Identifying gaps in the market and differentiating your store will be crucial to attracting and retaining customers.

Step 3: Develop a comprehensive business concept . Define your store's unique selling proposition, which could include offering a wide range of niche and specialty hardware products, providing consulting services, or hosting workshops to teach DIY skills. Tailor your concept to meet the needs of your target market.

Step 4: Create a detailed financial plan to estimate the startup costs, revenue projections, and profitability of your hardware store. This will help in securing funding and determining the feasibility of your business idea.

Step 5: Determine the store location and layout . Choose a location that is easily accessible to your target market and ensure your store layout is designed for optimal customer experience and efficient operations.

Step 6: Create a marketing and advertising strategy to attract customers to your store. Utilize both online and offline channels to promote your unique products and services, showcase your expertise, and engage with your target audience.

Step 7: Develop a staffing plan . Determine the number and types of employees you will need to run your hardware store efficiently. Provide relevant training and create a positive work environment to ensure employee satisfaction.

Step 8: Establish supplier relationships to ensure a reliable and diverse range of products for your store. Identify reputable suppliers who can meet your inventory needs and negotiate favorable terms.

Step 9: Obtain necessary licenses and permits to comply with the legal requirements of operating a hardware store. Research the specific permits and licenses required in your area and ensure you have all the necessary documentation in order.

By following these nine steps, you'll be well-equipped to write a comprehensive business plan for your hardware store that sets you up for success in the competitive market. With a focus on niche and specialty products, excellent customer service, and a well-executed marketing strategy, your hardware store can become a trusted destination for customers seeking specific tools and materials.

Conduct Market Research

Conducting thorough market research is an essential first step when developing a business plan for a hardware store. This research will provide valuable insights into the demand for hardware products in your target market, as well as the competitive landscape and potential consumer preferences. It will help you make informed decisions and identify opportunities for differentiation.

In order to effectively conduct market research, consider the following steps:

• Identify your target customers: Determine the demographic characteristics of your ideal customers, such as age, gender, income level, and geographic location. This will help you understand their needs and preferences.
• Assess the market size and potential: Analyze the overall market demand for hardware products in your area. Look for trends, such as population growth, housing development, or upcoming construction projects that could impact the demand for hardware products.
• Analyze the competition: Identify existing hardware stores in your target market and assess their strengths, weaknesses, and market positioning. This will help you identify any gaps in the market that your store can fill.
• Identify unique selling points: Determine what sets your hardware store apart from the competition. Consider offering niche products, specialty services, or providing exceptional customer service.
• Understand consumer preferences: Conduct surveys or interviews to gather insights into the specific hardware products and services that potential customers are seeking. This will help you tailor your offerings to meet their needs.

Tips for conducting market research:

• Use a combination of primary and secondary research: Primary research involves collecting data directly from potential customers through surveys or interviews, while secondary research involves analyzing existing market reports, industry publications, and online resources.
• Consider hiring a market research firm: If you have the budget, hiring a professional market research firm can provide you with more comprehensive and reliable data.
• Stay up to date with industry trends: Continuously monitor industry trends, new technologies, and emerging market opportunities to stay ahead of the competition.

By conducting thorough market research, you will gain valuable insights into the demand for hardware products in your target market, enabling you to develop a business plan that meets the needs of your customers and sets you apart from your competitors.

Identify Target Market And Competition

Identifying the target market and understanding the competition is a crucial step in developing a successful business plan for a hardware store. By thoroughly analyzing the market and researching the existing competition, you can tailor your offerings to meet the needs of your target customers and differentiate your store from competitors in the industry.

When identifying your target market, consider factors such as demographics, psychographics, and geographic location. Determine who your ideal customers are, their preferences, and their purchasing habits. This will help you develop a clear understanding of the specific needs and preferences of your target market.

Additionally, research and analyze the competition in the hardware retail industry. Identify other hardware stores in your area, both large chains and smaller independent businesses. Understand their strengths, weaknesses, and the products and services they offer. This will allow you to identify any gaps in the market that you can capitalize on and help you differentiate your store from the competition.

• Tip 1: Conduct surveys or interviews with potential customers to gain insights into their needs and preferences.
• Tip 2: Use market research tools and industry reports to gather data on market trends, customer behavior, and competitor analysis.
• Tip 3: Leverage social media and online platforms to monitor and analyze customer feedback and reviews of existing hardware stores in your area.
• Tip 4: Stay updated on industry news and trends through trade publications and attending relevant conferences or events.

Develop A Comprehensive Business Concept

Developing a comprehensive business concept is a crucial step in creating a successful hardware store. This step requires careful consideration of various factors that will shape the overall direction and focus of your business. Here are some important aspects to consider:

• Identify your niche: Determine the specific niche or specialty hardware products you want to offer. Consider market demand and the unique needs of your target audience. This will help differentiate your store and attract a loyal customer base.
• Define your value proposition: Clearly articulate what sets your hardware store apart from competitors. Is it the convenience of finding hard-to-find items? The expertise of your staff? The additional services you provide? Understanding and emphasizing your unique selling points will help you stand out in the market.
• Consider additional services: Think beyond just selling products. Explore opportunities to provide consulting services, workshops, or classes that teach DIY skills. These additional offerings can enhance customer engagement and loyalty.
• Embrace technology: In today's digital age, integrating technology into your business concept can boost efficiency and customer experience. Consider offering online ordering, delivery services, or a user-friendly website and mobile app.
• Create a customer-centric experience: Think about how you can create a personalized and remarkable experience for your customers. This could involve offering expert advice, hosting events, or creating a welcoming and visually appealing store layout.
• Stay updated with the latest hardware trends and innovations.
• Regularly seek feedback from customers to identify areas for improvement.
• Stay flexible and adapt your business concept based on evolving customer needs.
• Keep a close eye on industry competitors to stay ahead of the curve.
• Engage with industry associations and networks to stay informed and connected.

By thoroughly developing a comprehensive business concept, you lay the foundation for a hardware store that meets the unique needs of your target market and stands out from the competition. This step serves as a guiding framework for all other aspects of your business plan, ensuring that every decision aligns with your overall vision and objectives.

Create A Detailed Financial Plan

A detailed financial plan is crucial for the success of your hardware store. It will help you understand the financial viability of your business idea and guide your decision-making process. Here are some important steps to consider when creating your financial plan:

• Estimate start-up costs: Calculate the initial expenses required to launch your hardware store. This may include purchasing inventory, leasing a space, renovating the store, obtaining equipment, and hiring staff. Be sure to factor in both one-time and ongoing costs.
• Project sales forecasts: Research the market demand for hardware products in your area and analyze your target market. Based on this information, estimate your expected sales for each product category. Consider seasonal variations and potential growth opportunities.
• Calculate operating expenses: Determine all the costs associated with running your hardware store, such as rent, utilities, salaries, insurance, and marketing. Break down these expenses on a monthly or quarterly basis to get an accurate picture of your ongoing financial obligations.
• Forecast cash flow: Create a cash flow projection to track the inflows and outflows of your finances. This will help you assess how much cash you will have available at any given time and identify any potential cash flow gaps. It's essential to have enough working capital to cover day-to-day expenses.
• Set pricing and profit margins: Analyze your costs, competition, and market demand to determine the pricing strategy for your hardware products. Consider your desired profit margins while ensuring your prices remain competitive. Regularly review and adjust your pricing strategy based on market trends and customer demand.
• Identify funding sources: Determine how you will finance your hardware store. Explore options such as personal savings, loans from financial institutions, or partnerships with investors. Prepare a detailed plan to present to potential lenders or investors to demonstrate the potential profitability and return on investment.

Tips for Creating a Detailed Financial Plan:

• Utilize accounting software or hire an experienced accountant to assist in creating accurate financial projections and monitoring your finances.
• Regularly review and update your financial plan as your business evolves and market conditions change.
• Consider seeking advice from mentors or industry experts who can provide insights into financial management and planning for a hardware store.
• Include a contingency plan for unexpected expenses or fluctuations in sales.
• Keep track of key performance indicators (KPIs) such as inventory turnover, gross profit margin, and return on investment to assess your store's financial health.

Determine The Store Location And Layout

Choosing the right location for your hardware store is crucial to its success. The store should be easily accessible to your target market and strategically positioned to attract customers. Consider factors such as visibility, proximity to residential areas or other businesses, and the level of competition in the area. Additionally, the layout of your store plays a significant role in creating an inviting and functional space for both staff and customers.

When determining the store location, conduct thorough research on various potential sites. Look for areas with a high demand for hardware products and a customer base that aligns with your target market. Consider factors such as foot traffic, parking availability, and proximity to complementary businesses that could attract potential customers.

Tips for determining the store location:

• Visit the potential locations during different times of the day to gauge the amount of foot traffic and overall activity in the area.
• Research local zoning regulations and ensure the selected location complies with all necessary requirements for running a retail business.
• Consider the availability and cost of utilities, such as water, electricity, and internet connectivity, as this can impact your operational costs.
• Take into account the potential for expansion or future renovations, as your store may need to adapt to changing customer demands.
• Work with architects or store designers to create an efficient layout that maximizes product visibility, facilitates easy navigation, and allows for effective merchandising.

Once you have selected a suitable location, focus on devising an optimal store layout. Take into account the available square footage, the type and volume of products you plan to stock, and the overall flow of customers within the store. Place often-required items in prominent areas and ensure that aisles and pathways are wide enough to accommodate shopping carts or customers with mobility aids.

Additionally, consider creating designated areas for workshops, consultations, or product demonstrations, if they are part of your business concept. These interactive spaces provide opportunities for customers to engage with your store and its offerings, fostering a sense of community and increasing the likelihood of repeat visits.

Remember, the store location and layout should not only be aesthetically pleasing but also functional, efficient, and aligned with your overall business goals and target market preferences.

Create A Marketing And Advertising Strategy

Marketing and advertising are essential components of a successful business. A well-planned strategy will help you generate awareness, attract customers, and ultimately increase sales. Here are some key steps to consider when creating your marketing and advertising strategy for your hardware store:

• Identify your target market: Before you can effectively market your hardware store, it's important to understand who your target audience is. Consider demographics such as age, gender, location, and interests. This will help you tailor your marketing efforts to reach the right people.
• Determine your unique selling proposition: What sets your hardware store apart from the competition? Whether it's your wide range of niche products or your exceptional customer service, identify your unique selling proposition and highlight it in your marketing materials.
• Utilize a multi-channel approach: To reach a wider audience, consider using a combination of marketing channels such as print advertising, social media, email marketing, and local networking. This will allow you to connect with customers both online and offline.
• Create a strong online presence: In today's digital age, having an online presence is crucial. Build a user-friendly website that showcases your products and services, and optimize it for search engines to increase your visibility. Engage with your audience through social media platforms like Facebook, Instagram, and Twitter.
• Offer promotions and discounts: People love a good deal, so consider offering promotions, discounts, or loyalty programs to incentivize customers to choose your hardware store over competitors. This can help you attract new customers and retain existing ones.
• Consider partnering with local contractors or DIY bloggers to generate buzz and credibility.
• Host workshops or classes that teach DIY skills to not only generate additional revenue but also establish yourself as an expert in the field.
• Monitor and analyze the success of your marketing efforts. Use tools like Google Analytics to track website traffic and social media insights to evaluate engagement levels.

Develop A Staffing Plan

One of the key factors in running a successful hardware store is having a knowledgeable and skilled staff to assist customers and provide expert guidance. Developing a staffing plan is crucial to ensure you have the right team in place to meet the needs of your business and customers.

Here are some important steps to follow when creating a staffing plan:

• Identify the necessary roles: Start by identifying the different roles you need in your hardware store, such as sales associates, product experts, cashiers, and customer service representatives. Consider the specific skills and experience required for each position.
• Determine staffing levels: Assess the expected demand for your products and services to determine the number of employees needed to adequately serve your customers. Consider factors such as peak hours or seasons when determining staffing levels.
• Recruitment and hiring: Develop a strategy for recruiting and hiring employees. This may include advertising job openings, conducting interviews, and checking references. Look for individuals who have a passion for hardware and possess excellent customer service skills.
• Training and development: Once you have hired your staff, provide thorough training to ensure they have a strong understanding of the products and services offered in your hardware store. Continuously invest in their development through workshops, seminars, or online training programs.
• Scheduling: Establish a clear and fair scheduling system to ensure adequate coverage during all operating hours. Consider implementing flexible working arrangements to accommodate employee preferences and maintain employee satisfaction.
• Performance management: Set clear performance expectations and provide regular feedback to your staff. Establish a system for monitoring and evaluating employee performance, recognizing outstanding work, and addressing any performance issues promptly.
• Consider hiring employees with diverse skill sets and areas of expertise to cater to a wide range of customer needs.
• Offer employee benefits and incentives to attract and retain top talent, such as competitive wages, health insurance, or employee discounts.
• Promote a positive work environment by fostering open communication, teamwork, and mutual respect among your staff.

By developing a comprehensive staffing plan, you can ensure that your hardware store has a capable and dedicated team to provide excellent customer service and support the success of your business.

Establish Supplier Relationships

Once you have identified your target market and developed a comprehensive business concept, it's time to start building relationships with suppliers who will provide the products you need to stock your hardware store. These suppliers play a crucial role in the success of your business, as they will ensure a steady supply of high-quality items that meet the needs and demands of your customers.

Here are some essential steps to establish strong supplier relationships for your hardware store:

• Research potential suppliers: Start by researching potential suppliers who specialize in the type of niche and specialty hardware products you plan to offer. Look for suppliers who have a reputation for delivering quality products on time.
• Reach out and make contact: Once you have identified potential suppliers, reach out to them and express your interest in establishing a business relationship. Introduce yourself, briefly explain your business concept, and inquire about their product offerings and pricing.
• Compare pricing and terms: It's important to compare pricing and terms among different suppliers to ensure you are getting the best value for your money. Consider factors such as minimum order quantities, payment terms, and shipping costs.
• Negotiate contracts: Once you have selected the suppliers you wish to work with, negotiate contracts that outline the terms and conditions of the partnership. This may include pricing agreements, delivery schedules, and any additional services or support the suppliers can provide.
• Build a mutually beneficial relationship: As you begin working with your suppliers, focus on building a mutually beneficial relationship. Communicate regularly, provide feedback on their products, and address any concerns or issues promptly. This will help foster a strong and reliable partnership.
• Diversify your supplier base: It's important to avoid relying too heavily on a single supplier, as this can pose a risk to your business if any issues arise. Consider working with multiple suppliers to ensure a diverse and reliable supply chain.

Helpful Tips:

• Attend trade shows and industry events to network with potential suppliers and stay updated on the latest products and trends in the hardware industry.
• Consider collaborating with local manufacturers or artisans to offer unique, locally-made products in your store.
• Regularly evaluate your supplier relationships to ensure they continue to meet your business needs and explore new opportunities for potential partnerships.

Obtain Necessary Licenses And Permits

When opening a hardware store, it's essential to obtain the necessary licenses and permits to ensure compliance with local and state regulations. Failure to do so can result in legal consequences and disruptions to your business operations. Here are some key licenses and permits you should consider:

• Business License: Obtain a business license from your city or county government. This license allows you to legally operate a hardware store and ensures you meet the requirements set by local authorities.
• Sales Tax Permit: Apply for a sales tax permit to collect and remit sales tax to the appropriate government agency. This permit is necessary for conducting retail sales and ensures you comply with tax regulations.
• Building Permits: If you plan to make any structural changes or renovations to your store location, you may need to obtain building permits. These permits ensure that your construction work meets safety and zoning regulations.
• Occupancy Permit: Depending on your local jurisdiction, you may need an occupancy permit to operate your hardware store. This permit certifies that your store complies with fire, health, and safety codes.
• Sign Permit: If you intend to display signage for your hardware store, check if you need a sign permit. This permit regulates the size, location, and design of your storefront sign.
• Environmental Permits: Some hardware stores may need environmental permits if they handle or sell hazardous materials, such as paints or chemicals. These permits ensure proper handling, storage, and disposal of such substances.
• Trade Licenses: Depending on the services you plan to offer, such as heating and cooling repairs or locksmith services, you may need specialty trade licenses. These licenses demonstrate your qualifications and knowledge in specific areas.

Tips for Obtaining Licenses and Permits:

• Research local regulations: Familiarize yourself with the licensing and permit requirements specific to your location. Contact your local government offices or visit their websites to gather information.
• Allow ample time: The process of obtaining licenses and permits can take time, so start early to avoid delays in your store's opening.
• Seek professional advice: Consider consulting with an attorney or a business advisor who specializes in licensing and permits to ensure you complete the necessary requirements correctly.
• Maintain compliance: Once you have obtained the licenses and permits, make sure to comply with any ongoing reporting or renewal requirements to avoid penalties or license revocation.

Writing a business plan for a hardware store is an essential step towards success. By following the nine steps outlined in this checklist, you can ensure that your business is well-prepared and positioned for growth. By conducting thorough market research, identifying your target market and competition, and developing a comprehensive business concept, you can create a strong foundation for your hardware store.

Creating a detailed financial plan, determining the store location and layout, and establishing supplier relationships are critical for operational efficiency and cost-effectiveness. By developing a marketing and advertising strategy, you can effectively reach your target audience and differentiate your store from competitors.

Furthermore, developing a staffing plan and obtaining necessary licenses and permits are important for smooth day-to-day operations and legal compliance. By considering these factors and implementing them into your business plan, you can set your hardware store up for long-term success.

Remember, a hardware store that focuses on providing niche and specialty hardware products, along with additional services like consulting and DIY classes, can attract a loyal customer base. By offering convenience, expertise, and unique products, you can position your store as a go-to destination for customers seeking specific tools and materials.

Writing a business plan for your hardware store may seem like a daunting task, but by breaking it down into these nine steps and using this checklist, you can create a well-thought-out plan that sets your business up for growth and success.

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How to Start a Hardware Store

A hardware store typically sells hand and power tools, building materials, fasteners, keys, locks, hinges, chains,electrical supplies, plumbing supplies, cleaning products, housewares, utensils, and paint. They’re designed for DIY consumers and handymen (as well as tradesmen) who need a place to source supplies for projects.

Learn how to start your own Hardware Store and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a hardware store by following these 10 steps:

• Plan your Hardware Store
• Form your Hardware Store into a Legal Entity
• Register your Hardware Store for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Hardware Store
• Get the Necessary Permits & Licenses for your Hardware Store
• Get Hardware Store Insurance
• Define your Hardware Store Brand
• Create your Hardware Store Website
• Set up your Business Phone System

We have put together this simple guide to starting your hardware store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Hardware Store Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your hardware store?

Business name generator, what are the costs involved in opening a hardware store.

A small hardware store can be started for less than $100,000. Costs include rent for the building, start-up inventory, display setup, and cash reserve for staffing and labor costs. You’ll also want insurance.

Start-up inventory will likely run between $50,000 and $75,000. Rent, insurance, and other related costs will vary depending on your locale.

In general, you should not spend more than 20% to 30% of your total revenue on rent. Insurance should cover liability as well as loss of your inventory. Premiums for that insurance should make up no more than 5% to 10% of the total value of your business.

What are the ongoing expenses for a hardware store?

Ongoing expenses for this type of business include supplies, rent, utilities, and insurance. All of these costs will vary significantly depending on your location.

Who is the target market?

The business makes money by charging customers for tools and supplies. Usually the price is a fixed price for the item. In the case of items like rope or chain, the store may sell an item by the foot or priced by the yard.

Most customers pay by credit or cash. It’s important to offer customers a variety of ways to pay you as some volume customers may require credit terms in order to do business with you. Volume orders/clients also allow you to include finance charges or terms in your purchase price. It’s not uncommon for a hardware store to offer terms of 30 days to 60 days for a well-established client. However, these terms can be extended with or without interest. Most customers expect 30 days no interest.

You can establish a policy of charging interest after 30 days to collect more money from customers who need more time to pay.

How does a hardware store make money?

Ideal customers are usually DIY customers or handymen. However, a hardware store can set up trade accounts with local tradesmen to earn consistent business. For example, a store might contract with a professional carpenter to offer supplies for his business on an ongoing basis.

Clients are typically local. Advertising for a hardware store can be done one of several ways, including billboards, Yellow Page ads, pay-per-click local online ads, fliers, and email marketing to an existing customer list.

Email marketing is an underutilized strategy in this industry because most hardware stores rely on word of mouth and foot traffic. However, by emailing your existing customers on a regular basis, you can generate significantly higher revenues than relying on people randomly coming into your store when they need something.

A targeted email campaign would also allow you to better predict revenue and profit. Offer sales around holidays, for example, when business is typically slow. Entice customers with value, not discounts. Show them your own personality. Don’t make the mistake of running a discount-driven business as this only cultivates fairweather customers.

Hardware stores charge per inventory item. As such, there is no set price for all items in the store. When figuring out how much you should sell your items for, check your local competition or give yourself a gross margin on COGS of at least 40% (which is the industry average).

How much profit can a hardware store make?

Typical operating profit is between 1.6% and 6%, with a net profit before taxes of between 3% and 7%.

How can you make your business more profitable?

Making the business more profitable would involve supplementing your main source of income with other related services. For example, if you sell carpeting or tools and supplies for carpeting, you might partner with a local carpenter and offer installation services. You could do the same for window, door, roofing, or other major project.

Another way to make the business more profitable is to offer related products like planting or gardening supplies, which can be a supplemental source of revenue to your main product lines.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your hardware store is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, it is necessary to obtain a Hardware Store license. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Hardware Store needs and how much it will cost you by reading our guide Business Insurance for Hardware Store.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a hardware store

Getting new customers usually involves networking with existing contacts and spreading the word through local advertising. A hardware store is highly dependent on local business from the community. So, partnering with other businesses and advertising your hardware store might help spread the word faster. For example, ask local restaurants, and other retail stores, if you can advertise in their store in exchange for a discount on products in your store.

Not only does this build goodwill in your local community, the advertising can be positioned more as a referral from the existing local business rather than paid advertising in a neutral medium, like radio or television.

How to keep customers coming back

Specialization and company culture are the best ways to differentiate yourself from the competition. Another way to stand out in the crowd is to set up a website, capture the names and email addresses of your customers, and send them daily DIY tips. These tips can (and probably should) come from your own personal experiences. They don’t have to be long emails, but something to keep you in the forefront of your customer’s minds so that when they need something you sell, they think of you first.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

This type of business is usually attractive to handymen, tradesmen, and those who enjoy home improvement activities. The owner should be able to advise customers on purchases and have experience with the products being sold in the store.

Long hours aren’t always necessary, but weekends might be. Having a flexible schedule helps, especially during the first few years of operation.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a hardware store?

Day-to-day activities include meeting with customers on the floor and helping them source materials for their DIY projects. Checking inventory, making purchases from suppliers, and managing staff are also essential aspects of the job.

What are some skills and experiences that will help you build a successful hardware store?

Running a hardware store requires a strong business sense, but no specific degree or licensing other than local business or state licensing, if required in your state. Most hardware store owners, however, do have experience working for a hardware store, are former construction workers, contractors, handymen, or tradesmen.

What is the growth potential for a hardware store?

Hardware stores can be run as a small family-run or local shop or as a chain store. For example, Lowes, Home Depot, and other similar stores are large chain stores that operate all over the U.S. A small “mom and pop shop” may only have one location.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a hardware store?

Location matters with this type of business, especially when you’re new and unknown. If possible, try to get trade accounts open with local tradesmen to establish a baseline revenue and steady income.

How and when to build a team

Unless you are confident in your abilities to run a one-person shop, you’ll probably have to open your business with a small staff of at least 3 people. Ideally, you’ll want a person who can man the floor and help customers, someone to do bookkeeping, and a manager.

Useful Links

Industry opportunities.

• True Value Franchise Opportunity
• North American Retail Hardware Association

Real World Examples

• Carpenter Bros Do It Best

Further Reading

• Hardware Store Business Plan
• Hardware Retailing Magazine

Have a Question? Leave a Comment!

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Hardware Store

Back to All Business Ideas

How to Start a Hardware Store

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on May 24, 2022 Updated on May 12, 2024

Investment range

$83,550 - $119,100

Revenue potential

$547,000 - $1.37 million p.a.

Time to build

1 – 3 months

Profit potential

$55,000 - $137,000 p.a.

Industry trend

With the growing interest in DIY projects, particularly among millennials, hardware stores have been thriving, expanding nearly 46% in the last decade. If you have a passion for tools, you could start your own hardware store, provide an invaluable local service and eventually grow into the next Ace Hardware or Home Depot. 

But first you’ll need to know the nuts and bolts of starting a business and being an entrepreneur. Luckily, that information is all packed into this handy step-by-step guide, which will prepare you to launch and operate a successful hardware store. 

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

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Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting a hardware store has pros and cons to consider before deciding if it’s right for you.

• Resilient Market – Hardware stores even fared well during the pandemic
• Provide Value – Tools are required for many necessary tasks
• Good Money – Most tools are relatively expensive
• Investment Required – Building inventory requires upfront money
• Crowded Market – Compete with brands like True Value and Ace Hardware

Hardware store industry trends

Industry size and growth.

• Industry size and past growth – The US hardware stores industry is worth $35.1 billion in 2022 after expanding 4.8% annually for the last five years.(( https://www.ibisworld.com/industry-statistics/market-size/hardware-stores-united-states/ )) 
• Growth forecast – The US hardware store industry is projected to experience a very slight decline in 2022. 
• Number of businesses – In 2022, 14,918 hardware store businesses are operating in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/hardware-stores-united-states/ )) 
• Number of people employed – In 2022, the US hardware stores industry employs 169,387 people.(( https://www.ibisworld.com/industry-statistics/employment/hardware-stores-united-states/ )) 

Trends and challenges

Trends in the hardware store industry include:

• The DIY home improvement market is growing, led by millennials, with many hardware stores branding themselves as DIY stores and offering classes. 
• Hardware delivery is on the rise, presenting an additional revenue opportunity for hardware stores.

Challenges in the hardware store industry include:

• The proliferation of online hardware stores is creating new competition for traditional hardware stores.
• The rise of stores like Home Depot and Lowe’s has driven many small hardware stores out of business. 

How much does it cost to start a hardware store business?

Startup costs for a hardware store range from $85,000 to $120,000. The largest cost by far is the inventory. Other costs include the space rental and preparation. 

Alternatively, you could sharply reduce the initial costs by starting out with an online hardware store before opening a physical location. 

How much can you earn from a hardware store business?

Prices for items sold will obviously vary. These calculations will assume that your average customer will spend $50 Your profit margin after cost of goods sold, rent, labor, and overhead, should be about 10%.

In your first year or two, you might have 30 customers a day, bringing in $547,000 in annual revenue. This would mean $55,000 in profit, assuming that 10% margin. As your brand gains recognition and your store becomes more well known, you might get 75 customers a day. With annual revenue of $1,370,000, you’d make an outstanding profit of $137,000.

What barriers to entry are there?

There are a few barriers to entry for a hardware store. Your biggest challenges will be:

• The high startup costs of inventory
• Facing a large number of competitors

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Step 2: hone your idea.

Now that you know what’s involved in starting a hardware store, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research hardware stores in your area to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a small hardware store that offers DIY classes, or a hardware store that offers same-day delivery.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as plumbing supplies or power tools.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

Your products will be any number of hardware items, from nails to power tools. You can earn additional revenue by offering deliveries or holding DIY classes.

How much should you charge for hardware?

Prices will vary by hardware item. Typically, you should mark up your prices from wholesale prices to have a gross profit margin of 40%. After the costs of rent, labor, and overhead, your net profit should be about 10%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be mainly homeowners and contractors. You should spread out your social media marketing to include TikTok, Instagram, Facebook, and LinkedIn.

Where? Choose a hardware store location

To choose the ideal hardware store location, start by researching the local market to pinpoint areas with strong demand for your products.

Opt for a location with good visibility, easy access by car and public transportation, and ample parking.

Ensure the chosen site has sufficient space for product display, storage, and customer flow.

Lastly, consider the competition, safety, and neighborhood quality, as these factors contribute to attracting and retaining customers.

You’ll most likely need to rent out a storefront. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

Step 3: Brainstorm a Hardware Store Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “hardware” or “hardware store”, boosts SEO
• Name should allow for expansion, for ex: “Ace Hardware Co.” over “Plumbing Parts Palace”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Hardware Store Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary outlining the core elements of the hardware store business plan, including its mission, goals, and key financial projections.
• Business Overview: An overview of the hardware store business, including its mission statement, location, legal structure, and a brief history or background.
• Product and Services: A detailed description of the hardware products and services the store will offer, emphasizing the unique selling points and value proposition.
• Market Analysis: An examination of the target market for the hardware store, including demographics, market size, trends, and potential opportunities and challenges.
• Competitive Analysis: An assessment of the hardware store’s competitors, identifying strengths, weaknesses, opportunities, and threats in the market.
• Sales and Marketing: A plan outlining how the hardware store will attract and retain customers, including marketing strategies, sales tactics, and promotional activities.
• Management Team: Profiles of key individuals responsible for managing and operating the hardware store, highlighting their qualifications and roles.
• Operations Plan: Details on how the hardware store will operate on a day-to-day basis, covering inventory management, suppliers, facilities, and other operational aspects.
• Financial Plan: A comprehensive financial projection for the hardware store, including startup costs, revenue forecasts, profit and loss statements, and cash flow projections.
• Appendix: Supplementary materials that provide additional information, such as resumes of key team members, detailed market research data, and any other supporting documents.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to hardware stores. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your hardware store will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a hardware store business. 

Step 8: Apply for Hardware Store Business Licenses and Permits

Starting a hardware store business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your hardware store business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as  LS Retail ,  Vend , or  Retail Pro , to manage purchasing, inventory, and invoicing.

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Here are some powerful marketing strategies for your future business:

• Professional Branding — Ensure your branding reflects reliability, quality, and expertise through consistent store signage, logo, staff uniforms, and the overall store layout and design.
• Website Optimization — Develop a website that clearly lists your products, services, and store information, optimized for local searches related to hardware stores and home improvement projects.
• Local SEO  — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Social Media Engagement — Utilize Facebook, Instagram, and YouTube to showcase products, share DIY tips, and highlight customer projects, enhancing engagement and community involvement.
• Content Marketing — Create a DIY blog or video series to provide valuable content on home improvement, tool usage, and DIY projects. Include expert advice and FAQs on your website to establish your store as a trusted resource.
• Direct Outreach and Networking — Network with local contractors, tradespeople, and DIY enthusiasts. Offer workshops or training sessions to attract these key customers to your store.
• Email Marketing — Send regular newsletters to inform customers about new products, upcoming workshops, and special promotions, keeping them engaged and informed.
• Experiential Marketing — Host in-store workshops and live demonstrations on home improvement topics to engage customers directly and encourage store visits.
• Collaborations with Local Businesses — Partner with local contractors, home service businesses, and craftspeople for mutual referrals and to diversify product offerings. Engage in local school and community projects, providing materials or expertise.
• Customer Loyalty and Relationship Programs — Implement a loyalty rewards program offering discounts, points, or special perks to regular customers. Provide special discounts or accounts for professional contractors and tradespeople to foster repeat business.
• Targeted Local Advertising — Use local newspapers, radio, community boards, and online platforms to advertise your store and highlight special promotions or events effectively.
• Seasonal Promotions and Sales — Leverage seasonal cycles in home improvement and gardening by offering relevant promotions and sales to attract more customers during peak times.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your hardware store meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your hardware store business could be: 

• Your hometown hardware store has you covered! 
• All the hand and power tools at great prices
• Your #1 resource for DIY projects 

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a hardware store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in hardware stores for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in hardware. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a hardware store business include:

• Store Clerks – make sales, customer service
• General Manager – scheduling, ordering, inventory management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Hardware Store – Start Making Money!

Good old-fashioned hardware stores are an important part of any community. Many people prefer the small local shop, rather than going into a store that looks like a giant warehouse and getting lost. If you have a passion for tools and DIY, you could create a community hardware store, provide value to customers, and start building your hardware empire! 

You’ve got business knowledge in your toolbelt now, so it’s time to hit the ground running and start your successful hardware store. 

• Hardware Store Business FAQs

Yes, hardware stores can be very profitable. The key is to offer a variety of hardware items and provide great customer service that will keep people coming back.

The biggest hardware store company is The Home Depot, followed by Lowe’s and Menards.

A successful hardware store typically offers a wide range of products, excellent customer service, knowledgeable staff, fair pricing, and a convenient location. Additionally, successful hardware stores may provide additional services such as equipment rental, repair or installation services, or educational workshops and events.

To differentiate your hardware store from competitors, you could focus on providing a personalized and consultative approach to customer service, offering unique or specialized products, using eco-friendly and sustainable practices, or providing additional services such as delivery or installation.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Hardware Store Name
• Create a Hardware Store Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Hardware Store Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Hardware Store - Start Making Money!

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Hardware Retail Franchise Business Plan

Start your own hardware retail franchise business plan

Hisarlik Hardware

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Last year  Wilusa Magazine surveyed current downtown residents and found that hardware stores are one of the top ten things needed to make downtown a great place to live.  The same reasons that make downtown a great place to live also make it a great place to work. 

The demographics of home ownership have changed radically in downtown Indianapolis.  Today’s hardware store, which more and more is dominated by the “big box stores”, is cold, uninviting, and usually involves substantial driving time from downtown Wilusa.  Hisarlik Hardware is uniquely positioned to take advantage of this new fact of life.  Conveniently located to serve the Troas, Sinope Bay, Miletus Square, and Lycia areas, as well as all of Arazawa Township, Hisarlik Hardware offers parts, materials, and advice to tackle any home or do-it-yourself (d-i-y) project, whether the customer is a complete novice or a contractor.  The focus is on helping the customer identify what they want and need as soon as they enter the store. 

Through the use of superior personal customer attention, great product selection, and reasonable prices, Hisarlik Hardware will capitalize on this promising opportunity.  A location is being secured that offers excellent traffic with a built-in magnet for urban dwellers–downtown’s only grocery store sharing the parking lot.  The Building Blocks parent organization will help efficiently lay out and plan the store to increase sales and give the customers the utmost in attention.  Hisarlik’s management team has a wealth of business, financial, and mechanical experience that will ensure a great investment and the overall success of the venture.  The projected growth rate for Hisarlik Hardware is quite steady and has the potential to grow exponentially along with the increase in residential development downtown. 

Hisarlik Hardware will produce positive cash flow its first year of operations.  Hisarlik will also produce a net profit in its first year of operations.

1.1 Objectives

There are four major objectives of this business plan, of which three are immediate and the fourth is of a longer-term nature.

• Determine the feasibility of a downtown hardware store.
• Develop the strategy to open, manage and grow a profitable downtown hardware store venture.
• Establish a firm budget to operate and manage the business from concept to start up to operation, with good cash flow and consistent profits.
• Explore potential growth in downtown market and evolve new sources of business.

1.2 Mission

Hisarlik Hardware’s  mission is to create a downtown hardware store that is reliable and convenient.  A store that offers great service and selection of hardware and home improvement products in a customer friendly environment.

Hisarlik Hardware will cater to downtown residents, downtown property managers, downtown businesses, contractors, and suburban commuters.  Our customers will become loyal because of the great advice, prompt service, good staff attitudes, the overall quality of the shopping experience, and the fact that we consistently have solutions for their needs.

1.3 Feasibility of the Business

Hector Priamson and Troy Enterprises went through a long and thorough process of looking at different business ventures that would allow them to go into business and be a long-term success.  Through this process retail hardware became a potential opportunity.  The following items are considered “must have” items in order to make Hector Priamson and Troy Enterprises  not only feasible, but a tremendous success. 

• An industry that is healthy, resistant to economic swings, and allows an entrepreneur to influence the stores results.
• A market that can deliver the kind of potential that will allow a store to be profitable.
• A store location that will be easy for customers to find, allow easy access, plenty of parking and have economic terms that allow the store to be successful. 
• A successful and cooperative “partner”, such as Building Blocks, a national hardware co-operative, that will help research, plan, market, and operate a hardware store.
• A financial package that would allow the business to begin operations and operate in terms that would be realistic and successful for all involved whether it was private investors or the bank.
• Participants must possess the business skills, a strong work ethic, and a level of competitiveness required to make the business a success. 

Building Blocks  provides all of the tools and Hector Priamson possesses the financial, entrepreneurial, mechanical, and management skills needed to be successful in this business. 

1.4 Keys to Success

• Hardware Industry:   The Home Improvement industry has been consistently growing at a rate of 7% per year for the past decade according to the US Department of Commerce, with total US Sales of over $313 billion in 2002. While the economy has fluctuated up and down over the past decade, the growth of the hardware industry has continued to grow at the same pace.  The “Big Box” stores have also created a “Do-it-yourself” mentality in this country, a mentality that has a positive effect on the independent hardware store.
• Location:   The proposed location for  Hisarlik Hardware  is Troas Marketplace, a retail and commercial property on the corner of E. Anglia St. between N. Umberland St. and N. Mercia Blvd.  Troas Marketplace primary tenants are Scamander’s Food Market located across the parking lot and Buckbasket Cleaners adjacent to the proposed site.  Scamander’s is a huge draw.  Scamander’s is the only grocery store in downtown Wilusa.  The location of this store is known to all downtown residents, one block from the trendy and hip Wessex Avenue.  The Troas Marketplace offers plenty of parking, very important for a downtown location, as well as easy access to the parking lot from E. Anglia St. or N. Mercia St.  E. Anglia St. is a major eastbound thoroughfare east of downtown.
• Urban Products:  The location in downtown Wilusa will require a different product mix than a suburban store.  There will be a unique product demand from urban dwellers.  Building Blocks will be a big part of determining the mix of products that will be right for the urban market through their IAIS program (Inventory Always In Stock).  Hisarlik Hardware will be in touch with, and focus on, the downtown urban market, delivering products that are applicable to local customers, and marketing these items at competitive prices.
• Commercial Customers:    Hisarlik Hardware will also focus on becoming the hardware products source for every building and business in downtown Wilusa.  We will work hard to establish relationships with property managers and service personnel.  There are also plans to set up a delivery service to the downtown business market making it even easier for customers to get the products they need, when they need them.  While Hisarlik Hardware may be convenient and easy to access, potential customers may not find it to be convenient to leave their offices.  There will be an emphasis to establish business accounts for each of these customers to make doing business easy for them.
• Building Blocks :  It is crucial to have a co-op like Building Blocks behind efforts to open a store like Hisarlik Hardware .  They provide all of the tools to be successful in the hardware business including research, floor plans, marketing, and systems and instructions for operating a hardware store.  To become a Building Blocks Member (Member of the Building Blocks Co-op) really means they will provide an entrepreneur a “business in box”, yet allow the members to control their own business.  There are extensive marketing programs that have been built based on input from members to help generate sales, increase traffic and ultimately increase profits.
• Repair/Project Resource Area:   Hisarlik Hardware will leverage the strength of an established reputation for superb service built by other Building Blocks Co-op member stores.  It is a reputation that has positioned Building Blocks to be the leading independent hardware stores (from Consumer Checkbook , Aug 2003), and filling the gaps in the “Big Box” retailers one-size-fits-all offerings.  The Resource area will allow the customer to ask for help or directions as they enter the store.  This area will also offer assistance as they start a project, help in finding what they need, sharing know-how in completing a project, and advice on how to get a project done.  Store employees will be knowledgeable in home repairs/projects, home improvement, and mechanical repair and retro-fit.  In addition, the resource area will be used to conduct short training sessions and demonstrations in home repair and home improvement projects.
• The Tool Room Rental :   A rental business will be established under the Building Blocks’ “The Tool Room Rentals” tool rental program.  This will not only help with the initial cash flow, but will also be a source of additional sales as every tool will need accessories to go with the rental.  We will also think about party rental items to be included in the rental inventory.  Building Blocks will aid in developing the right rental product mix for this urban market.

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Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

In the company summary section, we will review the Troy Enterprises business and corporate entity and ownership, the role of Building Blocks in the business, the proposed location, and the start-up costs and funding.

2.1 Start-up Summary

Hisarlik Hardware has worked very closely with Building Blocks Hardware  to establish a detailed start-up cost list.  Building Blocks’ knowledge, track record and expertise have been invaluable in setting up this venture.

2.1.1 Start-up Expenses

The start-up costs of Hisarlik Hardware,  as detailed below, will consist primarily of inventory, equipment and fixtures.  Hector Priamson will invest cash, benefits and labor to the start up.  Investors will contribute substantially.  The company will secure an SBA 7(a) loan to be paid back on a 7-year amortization.

There is an amount budgeted for leasehold improvements which is intended to make minor modifications to the proposed site to prepare it for opening.  These improvements include replacing missing ceiling tiles and cleaning, polishing, or redoing the floor tile.  It is anticipated that the new floor tile can be laid over the existing tile at a substantial savings with no loss in quality or durability.

2.2 Building Blocks’ Role

With the merger of Kadmus, Homer & Company and Delphi/Ouroboros,  Building Blocks  is a cooperative comprised of members who are entrepreneur-retailers.   Building Blocks  is committed to empowering the independent retailer by setting industry and market standards with their niche businesses and unique brand of creative marketing, wide product assortment, award winning merchandising and technology, and quality training and business expertise.   Building Blocks’  buying power of more than $2.5 billion annually helps pass on benefits to independent members. 

Building Blocks has been a world leader in the hardware industry in product selection and customer service for do-it-yourselfers since 1948.

Vision To be the best-in-class provider of products and solution choices that drive our members’ and our co-op’s profitability.  Mission To provide: Choices of retail and commercial solutions to drive members’ sales and profits Assortments to support the solutions Operational excellence in the delivery of products and solutions

2.2.1 Market Reseach

Building Blocks has a wealth of experience and know-how on opening new hardware stores, with 6,567 stores worldwide.  Building Blocks has become a leader in determining what factors make a hardware retailer successful. 

Building Blocks currently uses a service called Yorikle.  This service is used to define the demographics and the expenditure potential of new markets.  For Hisarlik Hardware , the report was run on a one-, two-, and three-mile radius around the proposed location.  The report showed an exceptional amount of business (only reporting households, the study does not include property managers, businesses, or commuters), especially considering that there is no direct competition in the area.  The reports also get very specific as far as what the potential market is for hardware overall as well as specific categories within a store.  There are also numbers reports for the expected growth in the area over the next five years.

2.2.2 Planning

Building Blocks supplies professional design services to maximize merchandisable space and traffic flow.  Services include fixture plans, interior signage and decor, merchandising plans, lighting, basic site plans, and exterior storefront elevations. These plans are custom developed for each location and each store’s footprint.  The associated costs are included in the start-up costs.

A unique plan will be done for the proposed site for Hisarlik Hardware .  This process will begin as soon as the lease for the property is signed.

2.2.3 Support

Building Blocks provides a variety of support to all current members as well as prospects seeking to join the co-op.  The support comes to members in the form of retail consultants, knowledge, profit building programs, retail automation, training, advertising & promotion, a national brand, buying power, semi-annual markets, and an operations and distribution network.

Retail Consultant

Every member and prospect is assigned a retail consultant who works with them on an ongoing basis.  There is also a retail operations specialist who helps prospects open new stores.  There are regional marketing staff that are available as well as individual Building Blocks staff for individual marketing programs.

All specialists share their wealth of personal knowledge as well as having access to  Building Blocks’ cumulative knowledge and experience.  Building Blocks has made this model work since 1948.  It works very well and enables members to be very successful business people and has made Building Blocks the largest retail hardware co-operative in North America.

Proven Profit Building

Building Blocks makes available a large number of programs that entrepreneurs can choose to participate in.  They include retail pricing systems, electronic order entry systems, commercial and industrial sales, category specific planograms, and direct mail circulars, just to name a few. 

2.2.4 Retail Automation

Building Blocks leads the industry in automating their stores.  Building Blocks has brought their stores into the future with the automation which is made available to members.  This is a strength of Building Blocks and a service that is available to all of their members.  This automation helps the members in many different ways including inventory control, ordering, sales, and accounts receivable, all tied together in one system called Delian .

Experienced technical support personnel work with members to ensure current retail automation capabilities are compatible with Building Blocks’ existing system.  Building Blocks’ existing system is Delian, an industry leading software program based on Triad Eagle for Windows platform.   Delian is an easy-to-use, easy-to-learn tool that contains up-to-the-minute ordering and inventory accuracy, point of sale, accounts receivable, and much more.  It contains all the daily business tools needed to manage Hisarlik Hardware .

• Inventory:  Building Blocks’ industry leading retail merchandise approach is designed to organize a store’s departments, maximize space by removing non-selling inventory, ultimately freeing up valuable floor space.  This unique concept accommodates the needs of customers by featuring the right merchandise assortment proven to increase overall profits.  Category specific guidelines and planograms maximize retail sales and inventory turns.  IAIS is based on the best selling items from the most successful Building Blocks stores.
• Ordering:  Building Blocks has made ordering easy.  The Delian program helps track the needs and generates the necessary inventory levels.  Orders can be placed through the Building Blocks e lectronic order Entry System. 
• Pricing:  Building Blocks’ Retail Pricing System enhances the ability of each store to maintain a competitive price image while maximizing profitability.  Building Blocks’ Retail Consultant will help establish retail pricing which results in increased sales opportunities and profit margins based on downtown Wilusa. 

2.2.5 Training

There are five core programs for new store owners which make up the initial training.  They are:

• Certificate of Business Management
• Certificate of Marketing Management
• Certificate of Ownership Management
• Certificate of Retail and Sales Management
• Certificate of Human Resource Management

When a member opens a The Tool Room Rentals business there is also required training that applies only to The Tool Room Rentals .  There is also a wide range of do-it-yourself programs that are on CD-ROM and video.

2.2.6 Advertising and Promotion

Building Blocks’ marketing programs are second to none in the industry.  They include every tool needed to be successful in the retail hardware business.  They include Power Events, interior and exterior signage, online programs, and custom circulars.

Every member store is assigned a field marketing manager.  The marketing manager makes the members aware of the marketing tools available and how best to use them.

There are marketing strategy programs, programs that increase traffic, increase transactions, and those that merely build the brand.  All are made available, and it is the savvy member who uses the right programs and spend their advertising dollars best.  Based on the marketing experience  Hisarlik Hardware has, this is a strength most start-up businesses do not possess.

• Marketing Strategies:  The field marketing managers work with each member to determine the needs and issues for each store.  They look at the market penetration and awareness in the market.  As this information is gathered, a list of strengths and weaknesses is developed and programs designed to work on each of the objectives.  A very basic local store marketing tool kit is given to each member.  This is designed to show members what has been successful and basic marketing information that can be used on the local level.  There are also national programs that support what is done on a local level.  They include national television, radio, and newspaper.
• Increasing Traffic:  Building Blocks has also developed programs designed to drive traffic to the stores.  They include bargain of the month, circulars, Yellow Page programs, and local television, radio and newspaper.  Circulars play a huge role in local advertising.  There are three ways to get the circulars in the hands of the consumer, newspaper insertion, ADVO circular distribution and direct mail.  Each of these programs have different costs associated with them and different penetration in the market.  Circulars can be designed for an individual store.  They are all customizable and can be generated in any volume necessary.  Building Blocks also plans four Power Events throughout the year which are nationally advertised programs supported by television, radio and print.  In 2003, Building Blocks saw a significant increase in traffic and bottom line during each of the Power Events.
• Increasing Transactions:  Programs have been developed to increase the amount of each transactions.  There are display shelving end caps, wing panels, and clip strips that help increase sales on these specially priced items.  There are also online sign making programs that help members produce professional signs and save money on creative and printing jobs.  Muzak is a program of in-store audio and messaging which customers cannot ignore, and that drives them to specials and promotions they may not have been aware of.
• Brand Building:   The brand building programs are designed to reinforce the established Building Blocks name, both on the interior and exterior of the store.  Programs have also been designed for vehicle graphics.

2.2.7 National Brand

For over 40 years, the name Building Blocks has stood for trust, service and fair prices.  Building Blocks’  brand positioning statement is “ Building Blocks is the best place to get just what you need to complete home repair and maintenance projects quickly and easily.”  It is a name with heritage and integrity.  Consistent national media and the fact that Building Blocks is the largest co-op of independent hardware store owners, has established Building Blocks as a recognizable name in retail hardware.

The bottom line is people know that the Building Blocks name means hardware.  That is an asset new businesses work for years to establish.

2.2.8 Buying Power

An independent hardware store cannot compete in the current market, without a co-op behind them.  A Building Blocks member has the benefit of $2.5 billion in buying power which is passed on in savings and profits.  That makes Building Blocks the largest co-op of its kind in North America.

This is the main factor in making sure all Building Blocks members are getting products at the best possible prices to enable them to maximize profits.

2.2.9 Semi-Annual Markets

Building Blocks holds semi-annual markets where members can buy products and plan purchases for the upcoming seasons.  Markets are held in March (Fall/Winter) and October (Spring/Summer).  Members are informed of new items and trends in the industry at these markets enabling them to make good purchasing decisions.  There are also programs which allow members to make purchasing commitments at large cash savings.

2.2.10 Operations and Distribution Network

Building Blocks has established a network of strategically placed distribution centers throughout the United States to assure timely deliveries regardless of where the store is located.  Trucks deliver at least once per week and twice if necessary.  This is a huge benefit, because this process allows excess inventory to sit in the distribution center as opposed to the store shelves.  Over 64,000 items can be purchased on a per piece basis enabling stores to get whatever quantity is needed at any time.

2.3 Company Ownership

Troy Enterprises, Inc.  is a privately-held S corporation, currently 100% owned by its founder and president, Hector Priamson and his wife Andromache Eetion.  The company will be operating under the name of Hisarlik Hardware.   There are expected to be investors in the new venture.  Individual investors will own no more than 15% of Troy Enterprises, Inc.   These investors will provide investment in the way of seed cash to help start the business and none of the investors will be active participants in any management decisions. 

2.3.1 Hector Priamson

Troy Enterprises, Inc. founder and president is Hector Priamson.  Hector is a resident of Ilion.  He is married to Andromache Eetion who is currently a realtor with Ahhiyawa, Hatti & Company. 

Hector will spend 100% of his time on this new start-up venture.  Hector has a wealth of experience in business.  He started his career straight out of college with a very exclusive “Big Eight” Accounting firm.  While with  Manapa Tarhunda and Co. Hector earned his CPA license.  His interests led him to Wilusa, where he became involved in one of the city’s unique industries, Samothracing.  He started on the accounting side of the racing business and soon broke out into the part of the business that generates the revenue, sponsorship sales. 

His career led him to Trireme Racing Group where he served as the Vice President of Business Operations.  He led the turn-around of this team and company solidifying major sponsorships with companies like Corinthian Leather, Medusa-Gorgon Oars, and Posidon Libations.  He served in that position from 1996 through 2001.  During that period of time, Hector also served on the CURRAGH Franchise Board (rules making board of the sanctioning body).  His reputation and success led him to the top marketing position, Vice President of Sales and Marketing.  Hector served in that capacity from December of 2001 through July of 2003, at which time he left the company to pursue his current business,  Troy Enterprises, Inc. 

Hector’s expertise in the entrepreneurial business of oarsports will be invaluable in his new venture.  He has a keen sense of finance, marketing, management of inventory, accounting and bookkeeping practices, and staff management.  This experience will be invaluable in leading Troy Enterprises and making sound business decisions in the future.

Hector’s resume, as Confidential and Proprietary information, has been omitted from this sample business plan.

2.4 Company Locations and Facilities

When Hisarlik Hardware began this project the key component was the location.  Hector Priamson/Troy Enterprises and Building Blocks  felt several criteria were crucial to making this venture a success.  The ideal size was determined to be between 7,500 and 10,000 sq.ft.  The price per square foot was important because the economics obviously had to work.  Adequate parking and easy access were must-have criteria while searching for locations.  A location with only street parking was not considered an alternative.  Being located on a major thoroughfare with visibility is important to get the store recognized as a solution for hardware.  Adequate signage that traffic can recognize is key.  Additionally, intangibles such as other commercial neighbors and the neighborhood makeup were considered. 

Based on these criteria, a site at 310 East Anglia Street is was selected.  It is part of the Troas Marketplace. 

This property shares a parking lot with Scamander’s Food Market and Buckbasket Cleaners which is the most important of the intangible factors.  This Scamander’s generates $12.0 million in revenue and is Scamander’s most successful store in Wilusa.  Scamander’s is the only grocery store in the downtown area, and is an icon in the downtown residential community.  In discussions with Scamander’s, they said the Troas store has much more traffic than their other locations.  They have found the average customer visits the Troas store every two days versus once a week for the others.  Hisarlik feels this is a huge advantage for its venture as this will drive more traffic, more often to the Troas parking lot.  Scamander’s is in the middle of its lease for this property and seems pleased with the results.  Hisarlik does not anticipate this advantage changing by a move by Scamander’s, whose lease extends through the year five. 

The proposed site has plenty of parking spots and excellent access from eastbound Anglia Street and northbound Mercia Blvd. 

Signage marquees sit on both streets as well as on the north, west, and south sides of 310 East Anglia Street.  Furthermore, the location is perfectly set on eastbound Anglia Street, which is one of the major thoroughfares.  There is a driveway entrance and exit to Anglia Street. 

The proposed site is ideal in size measuring 9,509 sq. ft. and was formerly an Osco Drug store that was closed as Osco downsized their Wilusa operations.  According to the landlord, the closing of this location by Osco had nothing to do with the location, but rather, a change in priority within the company.  The property needs very little in tenant improvements in order to be open for business.  The terms of the lease are currently being negotiated.  It is anticipated that Hisarlik Hardware  will retain the property within the budgeted guidelines.  There were many properties that were investigated; however, for the stated reasons this is the best option as of last November.

The neighborhood has gone through major renovation over the past 10 years.  It is now a rejuvenated upscale neighborhood.  There is also major new development around the proposed site.  There is a brand new condominium development directly across East Anglia Street.  The development is called Lemnos Square.

There are three other new condominium developments under construction that are one block away.  They are Troas Terrace, The Anatolia, and The Konya.

The proposed location is one block from the successful Wessex Avenue District.  Wilusa has done a fantastic job in bringing in new business and culture into this area of downtown.

According to Wilusa Downtown Inc., Downtown has seen record demand and occupancy levels, driving the surge of residential development.  This has led to more than 615 new residential units currently in the pipeline.

The city of Wilusa is also reviewing plans for the former Cressida Agora site.  The plans all include a large number of residential and retail sites on the 29 acre site.  This site is located 2 blocks south of the proposed location.

Development downtown is happening in many different ways.  There is commercial, residential, as well as government development currently in process or planned.  All of these things add to the desirable nature of the proposed site.  We would be “right in the middle of it.”

Products and Services

Hisarlik Hardware will offer traditional retail hardware.  These products include electrical supplies, automotive, hardware, housewares, lawn and garden, building supplies, paint, plumbing, tools and rental.  There are other small services that will be offered including key cutting, glass cutting, and other small repairs. 

Hisarlik will work with Building Blocks to develop the right product mix.  The initial order of inventory will take into account the fact that this is an urban store and the product mix may contain different items than a suburban store.  Hisarlik Hardware  will rely on Building Blocks’ expertise, knowledge, and their IAIS inventory management program in developing this initial order.

3.1 Product and Service Description

Hisarlik Hardware will stock traditional retail hardware items.  The product mix will be changed slightly from suburban stores.  The history of the store will then be used along with IAIS to develop the right product mix that takes advantage of the available square footage and maximizes profits.

Hisarlik Hardware will open a The Tool Room Rentals store within the hardware store.  This is a program that will help cash flow as well as increase sales of rental accessories and support items. 

Hisarlik will also have key cutting, glass cutting, and other small services like screen repairs.

IAIS stands for Inventory Always In Stock.  This is a program that was developed by Building Blocks based on feedback from their members.  The members were looking for assistance in managing their departments and knowing what is selling and what is not. 

This program has the following benefits to members who take part in it:

• ORGANIZE departments with a more consistent merchandise assortment
• REMOVE non-selling inventory
• FREE UP valuable floor space
• INCREASE a store’s overall profits.

Building Blocks delivers to member stores IAIS merchandising guides, assortment guides, and recommends what inventory to carry and what not to carry.

This is an invaluable tool for a new member because the new store can rely on the history of current stores to help in their merchandising.

3.1.2 Retail Pricing System

Hisarlik Hardware will once again rely on Building Blocks to deliver the correct pricing for the market.  As discussed earlier, low cost is not one of the main factors for customers to shop at a convenient hardware store location.  Hisarlik will continue to work with Building Blocks to charge the right price to maximize profits.

3.2 Future Products and Services

Hisarlik Hardware will listen to its customers to understand what other needs are not being met.  Those needs could include additional store locations in the future and an expansion of products and services offered at the current location.  There may be other businesses that can be offshoots of retail hardware that help service or provide convenience to Hisarlik customers.

Market Analysis Summary how to do a market analysis for your business plan.">

The Market Analysis looks at potential customers and potential business.   Hisarlik Hardware  explored the market segments, their needs, and did a marketing analysis. 

The need for this venture was looked at first.  Does downtown need a hardware store?  The answer was a resounding yes. 

Once the need was established,  Hisarlik needed to analyze the make up of its customers, who and how many.  Who is the potential customer?  How many potential customers are there?

Once it was determined that there was a need and who the customer is, the next step was to figure out how to make them  Hisarlik Hardware  customers.  How to get the potential customer in the store?

4.1 Market Segmentation

There are six major market segments:

• Downtown Residents:   Downtown Residents will make up as much as 40% of the potential business of the store.  This is an ever growing and expanding group.  Downtown Resident levels are at an all-time high.  There are also major projects like the former Cressida Agora site and the Troilus Townhomes in downtown Wilusa that will increase the numbers of residents.  Wilusa Downtown, Inc. estimates there are currently 615 new residential units currently in the pipeline.  In addition, 91 renovation permits were issued last year on existing downtown residential structures.
• Property Managers:   Every residential building and every commercial building downtown has a property manager that keep the properties in good repair.  These property managers all need supplies and materials that are conveniently available.  These managers will be able to rely on Hisarlik Hardware to stock what they need.  Hisarlik feels the store will prove to be a quick, easy, and convenient way to fulfill the needs of these property managers.  Hisarlik and Building Blocks both feel paint and paint supplies will be a big percentage of what these property managers will buy.  The City of Wilusa estimated there was $18.0 million in paint and wallpaper Retail Sales in 2002 (within a three mile radius of the proposed location).
• Contractors:   As stated earlier, there were 91 renovation permits and 615 new residential units under construction in the last year.  The new residential units represented $261 million investment in downtown.  Hisarlik Hardware  will work to become a reliable supplier to these contractors working in the area.  We will also open early in the morning to help supply and be a convenient source for the contractors who start work early each day.
• Downtown Business:   Every downtown business will need supplies from time to time.  The City of Wilusa states there are 2,861 businesses located within one mile of the proposed location.  As of the time of opening the focus will be to sell this group traditional retail hardware supplies.  As the business is established, Hisarlik will work to develop the Commercial Supply Network  for these businesses.
• Suburban Commuters:   Since the proposed location is on a major Eastbound thoroughfare (E. Anglia Street) out of the downtown, the potential is encouraging for Suburban Commuters to stop on their lunch hour or on their way home from work.  Research tells us that these commuters will be in search of good service and convenient shopping, things they may not find in their suburban neighborhoods.
• Commercial Sales:  This could be the largest growth area of business that Hisarlik Hardware  will have.  As Hisarlik develops a positive reputation, there will be a push to activate the MRO ( Building Blocks’ commercial and industrial supply network).  Once again with so many businesses located downtown there is an infinite amount of business.  There are also a large number of Federal, State and Local government entities located downtown.  These is also one major university and several major hospitals within two miles of the proposed location.

4.2 Target Market Segment Strategy

Each market segment is unique and requires different marketing to attract them.

• Downtown Residents:   The proposed location really takes care of this segment by itself.  Because the proposed location shares the parking lot with Scamander’s (the only grocery store downtown) it will act as a magnet to bring people to Hisarlik Hardware .  Scamander’s estimates customers visit their store every 2-3 days, which is fantastic for traffic.  Based on discussions with Scamander’s they are willing to work with Hisarlik to develop co-op programs to work together to build both businesses.  There will also be direct mail programs and circulars to downtown residents to convert old habits as the business is started.  There will also be a Building Blocks loyalty program implemented called Building Blocks Rewards.  This program not only gives valuable research data, but also helps the store learn buying habits of the regular customers.
• Property Managers:   It is expected that this group also has a significant need for downtown hardware and will find the store by word of mouth.  Hisarlik will not rely on that.  There will be a sales program to set up accounts with property managers and let them know about great service that is available.  A list will be developed to pursue and court in order to build this business.  Keeping in mind this group is in search of convenience and ease of shopping, having a delivery option will also be important to this group.
• Contractors:   Hisarlik Hardware  will have to go out and pursue this group.  Hisarlik will have to visit job sites and let contractors know that Hisarlik is an option and the most viable option available.  Delivery and hours of operation will be very important to this group.
• Downtown Businesses:   There will be a direct mail program set up to make these businesses aware of the store and that it is an option for their hardware needs.  The key to this group is awareness.  They will also be looking for an easy and convenient way to get hardware items.
• Suburban Commuters:   The direct mail program to offer hardware convenience to businesses will also create awareness with the suburban commuters.  However, it is thought that the biggest attraction will be the outdoor signage.  There will be signs on E. Anglia St. and Mercia Blvd.  Both streets are high traffic areas and should create a good deal of awareness.  Awnings are also thought to be an option on the Anglia St. side of the building.  The color will not only be a change to what traffic is used to seeing but also exposure for the business. 
• Commercial Sales:   This segment is going to come down to hard work.  It will require a dedicated sales person calling on potential customers and developing relationships with Commercial customers to turn this segment into a strong revenue stream.

4.2.1 Market Needs

Downtown residents have already expressed the need for a local hardware store, as is documented in the April 2003 issue of Wilusa Magazine .  Residents recognize the need and will be supportive of a retailer answering their concerns.  The data that has been supplied to  Hisarlik Hardware (by Yorikle, a market research firm used by Building Blocks ) shows there is a population of nearly 53,000 people and more than 20,000 households within two miles of the proposed location.  The analysis provided by Yorikle states the area could support a 19,000 sq. ft. store.  We are proposing a 9,500 sq. ft. store.  In other words, there is enough business in this area to support a store twice the proposed size.  The report has also found there is more than $2.5 million of potential sales revenue, based on the number of households alone (not including any of the other segments).  The potential is expected to grow to more than $3.0 million by 2007.

Hisarlik Hardware believes the key to the need analysis is that all of the research and potential was measured by households, and households only.  The households only make up one segment of the potential business the store expects to generate.

4.2.2 Market Trends

When Hector Priamson initially looked at the hardware business, one of the most important factors was the fact this industry seems to be immune to significant fluctuations in the economy.  Based on information from the US Department of Commerce, the home improvement retailing industry has consistently grown at a rate of 7% for the past decade and similar growth is expected for the foreseeable future. 

In the 1990’s the growth in the industry was attributable to strong home sales, economic prosperity, and significant amounts of home renovation.  Since 2000, growth has stayed at the same levels even though some of these factors have changed.  Growth since the year 2000 was attributable to low interest rates and refinancing.  According to the Federal Reserve Board, 35% of all refinancing goes to home improvement. 

What does the future hold?  93% of all Americans plan to stay in their current homes and 78% of homeowners plan to undertake home improvement projects in the next year.  How much will they spend?  69% of homeowners plan to spend as much or more in the coming year than they did last year.  Home improvement budgets have grown 31% since the year 2000.

4.3 Service Business Analysis

Hisarlik Hardware  is being encouraged by Building Blocks to enter the equipment and party rental business upon opening the store.  Based on conversations with other members, the rental component has been an overwhelming success adding to cash flow of the business as well as increasing traffic to the store.  Reports of success unanimously talk about the fact that “renters” need tools and accessories to go with the rental equipment adding to the overall profitability of the store. 

In the downtown market, the make-up of the rental inventory will vary a bit from what a suburban store might have.  Hisarlik Hardware will work with the Building Blocks Rental people to determine the inventory.  Hisarlik will rely on the knowledge and expertise of Building Blocks.

An investmentm is required upon opening for the initial purchase of the equipment to rent.  Building Blocks has the necessary training and computer support to make this a very logical addition to the traditional hardware store.

4.3.1 Competition and Buying Patterns

The “Big Boxes”, such as Lowe’s, Menard’s, and Home Depot have had a significant effect on the Home Improvement industry.  According to the National Retail Hardware Association, based in Wilusa, the Big Boxes have expanded the market, increasing consumer participation in home improvement.  However, the National Retail Hardware Association feels that the Big Boxes are nearing a saturation point, and in the future, they cannot open many more stores without it affecting and threatening other current Big Box locations. 

“This competition has not kept independent hardware stores, home centers, and lumberyards from prospering.  These stores are much more professionally operated than they were just a decade ago, and most posted strong profits last year.” —NRHA, 2004 Market Measure

Independent Hardware stores need to focus on their strengths. 

Service.   88% of consumers have a favorable opinion of small business vs.  61% for big business (the lowest since 1993). 

Convenience.   Consumers want to get everything they need in one trip to the store.  The Independent hardware stores are able to do this, because they work with their customers. 

“There are four ways to compete

• Assortment & Variety
• Service & Experience
• Convenience

But price is only one of them.” —M.  Chandler, a retail industry consultant

4.3.2 Main Competitors

There is no immediate local competition.  The nearest hardware store is 1.8 miles away on South Hasan Dag Avenue.  The store is a small, 4,000 sq.  ft., and isn’t current in its products or presentation.

Because of the lack of product and poor shopping presentation, residents do not consider this an option for hardware.  The next closest hardware store is 2.7 miles away.  There are several stores that are 3 to 4 miles from the proposed site.  Studies say customers do not want to travel more than 3-7 minutes to a location.  While these stores could serve the need, their location does not make them a viable option to downtown residents because of distance and neighborhoods. 

The “Big Box” stores such as Lowe’s, Home Depot, and Menard’s are built to serve suburban Wilusa.  The closest Lowe’s is 12.5 miles and 17 minutes west of  Hisarlik Hardware’s proposed location.  The nearest Home Depot is 10.5 miles or 16 minutes west of Hisarlik .  Menard’s is 9.3 miles and 14 minutes east of the location.  There are no stores that are convenient to the downtown market.  To get to any of these, customers must plan on spending 30-40 minutes of driving roundtrip at a minimum before even walking into the store.  Hisarlik Hardware will be a 2-3 mile drive or 5-10 minutes maximum travel to the store.  This convenience will be a major selling point for the business. 

From discussions between Hisarlik Hardware and the parent company of Building Blocks , regarding the possibility of a “Big Box” store opening in the downtown area, it seems unlikely due to the size of the potential market, cost, and lack of real estate, to build such a structure in Arazawa Township.

An analysis of competitors in the equipment and party rental field is similar to that of the hardware industry.  There is one competitor that is southeast of downtown, 1.5 miles from the proposed location.  The company, Best Rentals, Inc., handles equipment and party rentals. 

Tent rental has one competitor that is downtown.  An factor in tent rental may be the clean new equipment and, once again, great service available from Hisarlik .  American Tent and Awning is located 1.8 miles from the proposed location.  One advantage for Hisarlik in tent/party rental is that a customer can cover more bases with the variety of equipment and supplies from a rental and hardware store versus a company that focuses solely on tent rental. 

The closest tool rental company is 2.3 miles from the proposed location.  Hisarlik Hardware  feels that significant progress can be made into the tool rental business because of convenience.  Hisarlik expects to be a fantastic solution for contractors working downtown who need equipment for the day or for the project.  Residents downtown have smaller homes and condominiums, consequently they do not have room to own bulky or large quantities of equipment.  This is expected to be a benefit for the rental business. 

Strategy and Implementation Summary

Emphasize Customer Service

Hisarlik Hardware will build a reputation of fantastic customer service, building upon what Building Blocks stores and the Building Blocks brand have already established.  We will establish our business, by offering a clear cut leader in retail hardware in downtown Wilusa.

Build a Relationship-Oriented Business

Fantastic service will lead to long term loyal relationships with our customers and clients.  The goal is to have our customer base become reliant on Hisarlik to stock items and have solutions for their needs.  The customers will soon understand the value of the relationship.

Focus on Target Markets

Hisarlik will focus on the market segments identified earlier in this document.  Each of the market segments will have sales initiatives to focus on each group.

Differentiate and Fulfill the Promise

Hisarlik Hardware  can’t just market and sell products and services, we must actually deliver as well.  We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have.  This service has to be consistent and deliver what the customer is looking for.

5.1 Marketing Strategy

The Building Blocks Power Events are advertising programs supported by national advertising during peak buying periods for planned home care products.  Power Events focus on those high traffic times of the year with a multimedia campaign.  A strong mix of national television and radio advertising, circulars, Sunday supplements, and POP sign kits deliver a sense of urgency to visit the store.  A small 8-page and large 12-page circular are available for each Power Event to help carry the theme and promote the sale.  There are four Power Events each year.

Hisarlik Hardware will also place ads in the Yellow Pages.  The Yellow Pages continue to be a source of a good number of customers.

Hisarlik Hardware will also rely on the media to help spread the word about this new business downtown.  Fox Television’s local morning TV show goes on location to promote local businesses.  Radio can be used in many different ways, radio remotes for the opening of the store.  Wilusa Magazine has already identified an issue, a follow up story is very appropriate.  The Wilusa Star covers new and significant businesses in Wilusa, Hisarlik feels this store will fit that description.

5.1.1 Potential Customers

Every person is a potential customer of a hardware store.  Hisarlik Hardware will carry items everyone needs.  The average household spends $135 per year on items found in a hardware store according to Yorikle, a research firm retained by Building Blocks .  The key to getting the potential customer to spend their $135 or more in Hisarlik Hardware are include the following attributes:

• convenience
• reliability
• knowledgeable
• progressive
• exceed customer expectations

All of these attributes will be present in Hisarlik Hardware.  In order to be convenient, Hisarlik will have to adapt to its environment, the location will be key to making it easy for customers to get to the store.  The store must also be open when the customers arrive.  In addition, a delivery service will be available to make it easier for regular customers to not have to leave what they are doing to get the products they need.  There will also be accounts set up to make it easier for regular customers to get items, without having to deal with petty cash, company credit cards, or company checks for each visit to the store. 

Customers expect to get great service at Building Blocks Hardware stores, which is evidenced by the fact 50% of all hardware shoppers will avoid the “Big Box” retailers and opt instead for the personal service like  Hisarlik Hardware .  We will also need to be reliable, which means that customers will depend on us to inventory what they need and understand and anticipate their needs.  Customers want to come into a hardware store having the confidence they will find what they need.  The store will possess a knowledgeable and friendly staff.  The staff has to understand and interpret what the customer needs and find the product that will fit that need.  Hisarlik Hardware will also be progressive, by that we mean we will continue to evolve and understand what the customer needs and develop new markets where the need exists.

5.2 Sales Strategy

Hisarlik Hardware  will be offering a convenient solution which all downtown residents need.  Customers will be introduced to Hisarlik through targeted advertising, direct mail, signage, and word of mouth.  Hisarlik will also take advantage of all the Building Blocks programs that help create loyalty and awareness among the potential customers in the market.

The direct sales force will consist of two seasoned sales people led by Hector Priamson.  The focus will be on property managers and all downtown businesses to create an awareness of the store location and the fact that the store is a potential solution for retail hardware needs.

Glaucus Sarpedon will also work on the commercial accounts and government accounts located in the downtown market.

5.2.1 Sales Forecast

The sales projections start in the month of March, 2004.  Sales steadily increase along with the awareness of the store through September.  In September, there is a small dip in sales then a steady rise through the Christmas season and December the stores best month of the year.  There is a traditional slow season that runs through January and February each year.  The goal of Hisarlik Hardware will be to develop programs that take as much slack out of the sales as possible and get them in line with the rest of the sales year. 

Sales are estimated by Building Blocks to be $125 to $175 per square foot of the total area of the store.  The Gross Margin will range from 40% to 45%.  There is a 25% growth predicted for the second year of sales driven by awareness, growth in rentals and growth in commercial sales. 

The immediate goal is to achieve robust sales in the first year.  It is thought that double digit percentage total sales increases can be achieved and maintained throughout the five years of this business plan.

5.2.2 Sales Programs

Building Blocks has loyalty programs like Building Blocks Rewards that Hisarlik Hardware  will participate in.  This program has been developed to build a loyal following of customers that use the card for shopping benefits. 

By the second year accounts will be set up for businesses, property managers, and contractors to make shopping easy for them.  This program will allow these customers to shop and make it easy for them to pay for items on account.  This program will have to be managed very carefully, and Hector Priamson’s financial background will prove to be very useful in managing these accounts. 

5.3 Strategic Alliances

Hisarlik Hardware has already contacted Scamander’s Food Market and have the word of the General Store Manager that they would be interested in developing programs to work together with Hisarlik for the betterment of both businesses.  Both will stand to benefit from each other.

5.4 Milestones

Hisarlik True Value has worked with True Value to establish a realistic time line to work within to have the store open for business in March of 2004.  The time line is listed in the Milestones table below.

5.5 Competitive Edge

The competitive edge has been covered throughout this document.  Location is the biggest key to this business.  There are no true competitors in our business in downtown Wilusa.  Our future customers have had to work harder to get the same or lesser service less conveniently.  We will be in their back yard and be easy to work with and have products they need. 

Hisarlik Hardware have staff that understand customer service and how to treat customers so that they want to shop in the Hisarlik Hardware environment.

Web Plan Summary

Obviously, we are in the age of computers and the Internet.  Customers are ultimately looking for the simplest, most reliable, and least consuming way to get the goods and services they need. 

Therefore, a Web strategy is important to keep up with the changing world and stay ahead of potential competition.  Customers that buy on the Internet do not care where a business is located, so it is important that a name and a reputation be established that customers can rely on whether it is in the store or on the Internet.

6.1 Website Marketing Strategy

Building Blocks has a sensational program for their members.  It allows a member to establish their own website with member information and use the established product background linked to buildingblockshardware.com.  Customers can then go on line and order products very easily.  This is a program that a normal small business could not afford to invest in. 

The Internet is also a valuable communication tool with customers.  The site includes a custom home page, store location along with a map, store hours, services and selection, in-store coupons, 1,000 item in-store catalog, and as many custom pages as a member needs.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Hisarlik Hardware will be managed by Hector Priamson on a day-to-day basis.  He will devote 100% of his time to this venture.  There are two key employees joining Hector in this venture, Penthesilea Thracian and Glaucus Sarpedon. 

Hisarlik expects that there will be up to 17 employees in total, some full time and others part time.

7.1 Organizational Structure

Hisarlik Hardware will be managed, organized, and run by Hector Priamson.  The company will have three key employees, Hector, Penthesilea (Penthe) Thracian, and Glaucus (Glus) Sarpedon.  These three all know each other very well, Penthe and Glus having worked for Hector in the past in the oarsports industry.  They bring a unique set of skills to this venture which will prove invaluable in the future. 

The company will be organized with Hector Priamson as its president.  He will be responsible for all of the financial affairs, inventory management, cash management, manage the cashier staff, advertising, marketing, as well as the day-to-day contact with Building Blocks .  Hector will also have relationships with attorneys and accountants to stay on top of all business matters.  Additionally, he will also manage the day-to-day operation of the rental business.  While this seems like a lot, these are routine tasks Hector has performed for many different companies for many years.  As good as Hector is, he can’t do it all.  He will rely on two former employees from his. 

Penthesilea Thracian has been in the oarsports business for the better part of 30 years.  She is looking for a change and Hisarlik Hardware is just what she had in mind.  Penthe has managed teams, and developed and run programs from the ground up.  Her experience led her to winning the 1981 Salamis 500 as the crew chief of Al Cibiades’ trireme at Dardanelles Racing.  Working with large companies and manufacturers that wanted absolute accountability in their programs, Penthe was the gal that was brought in to handle it.  Over the past 5 years, she has added another unique skill that will nicely complement her mechanical skills; hospitality.  Penthe managed the hospitality program for Corinth Racing.  That job really entailed looking after people and providing great service, a skill that will be invaluable for Hisarlik Hardware . 

Glaucus Sarpedon is an extremely driven young man who graduated from Hattusili University.  Glus decided he wanted to work in oarsports.  When he put his mind to it, that is exactly where he ended up.  He joined Dardanelles Racing where he worked in the hospitality area, also gaining the valuable service quality that will be necessary for this new role.  He also had the responsibility of moving, setting up, and servicing the complete hospitality fleet.  He has mechanical skills that he will bring with him as well.  Glus also filled the role of Team Coordinator, this role is the “quarterback” of the organization.  He was responsible for anticipating what the team was going to need, when they would need it, and how much they would need.  Glus will be a huge asset to the company. 

Each of these folks have departments that will be assigned to them and a staff that will help them manage the departments.  They will be responsible for hiring the staff that will report directly to them.  Hisarlik Hardware will also develop an incentive plan rewarding successful departments and department sales growth.  The experience and trust Hector Priamson has in these two individuals will allow him to focus on managing the business.

7.2 Management Team Gaps

A review of potential gaps in the experience or know-how of this venture does not show any glaring weaknesses.  Hisarlik Hardware ‘s Achilles heel is the lack of actual hardware store business experience.  While the three key individuals do not have that direct experience, they will draw heavily upon the instruction, training, and specialist support available from the Building Blocks co-op organization. Building Blocks is in the business of passing on their experience and knowledge to assist their members to be be successful.

7.3 Personnel Plan

The personnel plan was developed in conjunction with Building Blocks and some consulting with the folks at Konya Building Blocks Hardware in Catalhoyuk. 

The plan was developed so there are at least 2 managers, 1 cashier, and 2 specialists on duty at all times.  The average number of people working at any one time is between 5.5 and 7.1 on busy Saturdays.  All employees will have the ability and knowledge to run the cash registers. 

Hector Priamson, Penthesilea Thracian and Glaucus Sarpedon will start with base pay as laid out in the following table.  The cashiers will be paid $7-$8 per hour.  Full-time specialist staff will be paid between $9 and $10 per hour.  Other part-time help will be paid $6 per hour. 

It is felt there is a pool of retired “handy men” that can fill many of these roles.  The $6 per hour employees are thought to be high school or college kids. 

Employee hiring will start in January, training will begin in February and work in March.

Financial Plan investor-ready personnel plan .">

The business will need substantial start-up capital.  It is expected that a good portion of that amount will be secured through SBA financing. 

Sales are expected to start conservatively the first year and increase steadily through the fifth year of operations.  Operating income will pay back the start-up loan over a seven year amortization. 

Inventory Turnover ratios are predicted to be in excess of 4.3.  The goal will be to get this ratio to exceed 5.0.  To do that Hisarlik will be required to purchase smartly and drive sales. 

Cash will be retained in the business to cover cash operating needs as well as future expansion of other Hisarlik Hardware locations. 

It is expected that dividends will be paid to the investors annually.  The amount of the dividends is estimated to be 50% of profits. 

After the first year of operations, it is expected that Hector Priamson will be able to trim expenses in the business as efficiency, experience, and knowledge work together and help the business operate better.  Estimates are extremely conservative in the budgeting process.

8.1 Start-up Funding

Hector Priamson will invest cash, benefits and labor to the start up.

Troy Enterprises  is in the process of negotiating with potential investors for the seed cash needed to start the business.  It is expected that a tidy sum will be raised to start the business.  It is expected that no more than 15% interest will be given to each investor.

Bank Financing

Troy Enterprises  is submitting business plans and other requested documents to financial institutions in pursuit of the additional money needed to finance the rest of the company and provide operating cash for the business.  It is expected that the loan will be a part of the SBA 7(a) program.  It is assumed that the terms of the loan will require repayment in 7 years, at a rate of 8%. 

8.2 Important Assumptions

The table below presents the assumptions used in the financial calculations of this business plan.

8.3 Key Financial Indicators

As shown in the Benchmarks chart below, our key financial indicators are:

• Projected Sales:   Projections are based on estimates calculated by Building Blocks based on demographics and potential in the market place.  Sales will consistently increase as the store gains experience, in addition to the consistent growth expected in the home improvement category nationwide. 
• Gross Margins:   Building Blocks expects that the Gross Margin can increase in years 2-5, however for this analysis, the gross margin was kept consistent at 42% on inventory sales.  Overall, the rental and other income have driven the gross margin up by 2 points.  Building Blocks expects that Gross Margin on inventory could rise as high as 44%. 
• Operating Expenses:  Operating expenses growth is primarily caused by an increase in salaries as the business gets established, as well as a small percentage increase for COL over the next five years.  Operating expenses are expected to increase at a rate of 6-8% per year. 
• Inventory Turnover:   Hisarlik Hardware  will maintain just-in-time inventory levels.  Building Blocks distribution will help maintain those levels.  Inventory is projected to turn 4.3 times per year.  The goal is to get inventory turns to exceed 5.0, through good purchasing decisions.

8.4 Break-even Analysis

The Break-even Analysis has determined approximate break-even sales as shown below.  There will be a constant monitor on this number in an attempt to lower it.  Once again, it is believed that efficiencies, experience, and knowledge will help in decreasing the break-even number. 

Sales are expected to be well in excess of this number for each month.

8.5 Projected Profit and Loss

The Profit and Loss statement makes it very clear which areas will need attention.  Payroll is by far the largest expense the company incurs (besides cost of goods sold).  Staff will need to be managed and hours regulated so that hours worked correlate to sales.  Emphasis will be placed on minimizing expenses that do not help generate bottom line. 

The company generates a profit as sales revenue gets above the break-even line.  A push on sales will be very important in generating bottom line profits.  Interest expense is also a large line item that diminishes over time, but is a necessary expense on the front end of the business.

8.6 Projected Cash Flow

The company generates a net positive cash flow in its first year.  It is assumed that Accounts Payable will be repaid in 45 days.  Repayment of debt is a significant factor in the amount of cash that gets paid out.  Long-term debt is on a 7-year amortization. 

Dividends are paid in December of each year.  The assumption is that 50% of profits are paid out to shareholders and investors.

8.7 Projected Balance Sheet

The balance sheet is very straight forward.  No significant purchases of assets are expected or anticipated. 

Using Building Blocks’ IAIS, online ordering, and weekly delivery systems allows Hisarlik Hardware  to restock inventory in a just-in-time fashion.  Inventory levels will be maintained with re-orders tied to Cost of Goods Sold.  Additional inventory purchases will be made one month prior to participation in the quarterly Building Blocks nationally advertised Power Event sales. The first Power Event coincides with Hisarlik Hardware’s  Grand Opening.  Inventory will be allowed to drop somewhat at the end of December, after the Holiday purchasing, and for year-end tax accounting purposes.

There is a possibility of rental purchases in the future if the right products are found to add to the current inventory.

8.8 Business Ratios

The Ratio Analysis looks very encouraging.  Industry Profile data is based on Standard Industrial Classification code 5252, Hardware Stores. 

• Gross margin : Increases each year and peaks at 45%.  It is anticipated that after year two, the gross margin percentage could be increased by as much as 2 points.  The Gross Margin is a little high due to the fact that the rental income is included in this calculation with no cost of sales.
• Selling, General and Administrative Expenses : It is encouraging that these expenses as a percentage of sales are decreasing.  These expense will continue to be looked at to find new savings to deliver bottom line.
• Quick Ratio : The Quick Ratio is good staying in the 2 range for the entire first 5 years.
• Net Profit margin : Net profit margin continues to grow.  The goal will be to minimize expenses and get the Net Profit margin in the 15 range.
• Inventory Turnover : Inventory turnover as calculated here is 2.3 to 3.5 times.  The goal will be to get that percentage to exceed 5 times per year.  The calculation is skewed on this table because of rental income being included in sales.

8.9 Long-term Plan

The long term plan is to develop a steady retail hardware business in the downtown Wilusa market.  As discussed, there is currently no competition.  They key will be to establish a solid business to discourage any competition from coming into the market or creating a level of loyalty that will not be fazed by competition. 

After two solid years of performance and establishment of Hisarlik Hardware , there are two areas of potential expansion.  First, look for opportunities in the current market.  What businesses can be combined logically with what has been established that will deliver additional bottom line profit.  Secondly, a second location will be developed in a new part of Wilusa.  An area that will deliver a similar characteristic to the first store that appears to be headed down the road of success.

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How to Start a Profitable Hardware Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a hardware business plan., 3. develop a hardware brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for hardware., 6. open a business bank account and secure funding as needed., 7. set pricing for hardware services., 8. acquire hardware equipment and supplies., 9. obtain business insurance for hardware, if required., 10. begin marketing your hardware services., 11. expand your hardware business..

Beginning a hardware business requires a comprehensive understanding of the market landscape to identify opportunities and challenges. A market analysis will enable you to gauge demand, competition, and potential customer base. Here’s how to proceed:

• Research your target market by collecting data on demographics, spending habits, and needs to understand who your customers are and what they're looking for.
• Analyze local and regional competitors to assess their product offerings, pricing, strengths, and weaknesses to find your unique selling proposition.
• Investigate industry trends and future predictions to align your business strategy with where the market is headed.
• Utilize government and industry reports for statistics and market insights that can help in making informed decisions.
• Conduct surveys, focus groups, or interviews with potential customers to get direct feedback on their preferences and willingness to purchase.
• Assess suppliers and distributors to determine the best partners for your business in terms of quality, cost, and reliability.
• Examine regulatory requirements to ensure compliance with local, state, and federal laws that may affect your business operations.

Are hardware businesses profitable?

Yes, hardware businesses can be highly profitable. When done properly, hardware businesses can earn a significant return on investment with relatively low overhead costs. Successful hardware businesses typically focus on expensive, high-end products with a large market and strong demand, or on niche products with high margins and loyal customers.

Starting a hardware business requires careful planning and a solid business plan. This document will serve as your roadmap, outlining the strategies for success, financial projections, and the structure of your business. Below is a guide to drafting an effective hardware business plan.

• Begin with an executive summary that encapsulates your business goals, target market, and competitive advantages.
• Define your business structure, including ownership, management team, and operational strategy.
• Conduct a market analysis to understand your competition, identify your customer base, and determine market trends.
• Outline your product line, detailing the types of hardware you will offer, your suppliers, and your inventory management system.
• Develop a marketing and sales strategy that includes pricing, promotions, sales channels, and customer service.
• Provide detailed financial projections, including start-up costs, revenue forecasts, profit and loss estimates, and cash flow analysis.
• Address any regulatory requirements, licensing, and insurance needed to operate legally and safely.
• Include an appendix for supporting documents, such as resumes of the management team, legal agreements, and detailed market research data.

How does a hardware business make money?

Hardware businesses make money by selling tools and supplies to their target customers. For example, a hardware business selling supplies and equipment needed for an air duct cleaning business might target professional residential cleaners and commercial building owners. This hardware store could offer a variety of items such as brushes, vacuums, hoses, seals and special chemicals needed for air duct cleaning. With a wide selection of items available at competitive prices, the store would be able to attract customers looking for quality supplies for their air duct cleaning business.

Creating a strong and recognizable hardware brand is crucial for your business success. It's about more than just a logo; it's about building a reputation for quality, reliability, and innovation that resonates with your target audience. Here's how to develop a hardware brand:

• Define Your Unique Selling Proposition: Identify what makes your hardware products stand out from the competition. Emphasize these features in your branding to attract customers.
• Choose a Memorable Name and Logo: Select a brand name and design a logo that is easy to remember, yet reflects the quality and reliability of your hardware products.
• Establish Brand Values and Personality: Decide on the core values and personality of your brand. Are you innovative, eco-friendly, or customer-centric? Let these values guide your interactions and communications.
• Create a Consistent Visual Identity: Use consistent colors, fonts, and design elements across all marketing materials to create a cohesive look that customers will recognize.
• Promote Your Brand Story: Share the story behind your brand, including the inspiration for starting your hardware business and your vision for the future, to create a personal connection with your customers.
• Engage with Your Audience: Build relationships with your customers through social media, customer service, and community engagement to foster brand loyalty.

How to come up with a name for your hardware business?

Coming up with a name for your hardware business can be exciting yet overwhelming. It is important to consider the overall purpose of your business, what type of hardware you intend to offer, and your target audience when selecting a name. Research existing businesses in the industry, as well as potential names to ensure you don't select something that is already in use. When selecting a memorable and catchy name, try to involve a compelling story or feature of the business within it. Lastly, make sure you research potential trademark issues related to the name prior to finalizing it.

Registering your hardware business is a critical step that will legitimize your venture and enable you to operate legally. This process varies depending on your location, but generally involves a few key steps to ensure that your business is compliant with local laws and regulations. Follow these guidelines to formalize your business registration:

• Choose a unique business name and check its availability with your government's business registry to ensure that it's not already in use.
• Decide on a legal structure for your business (sole proprietorship, partnership, LLC, corporation, etc.) as this will determine your liabilities, tax obligations, and the amount of regulatory paperwork required.
• Obtain an Employer Identification Number (EIN) or the equivalent in your country, which is necessary for tax purposes and to open a business bank account.
• Register your business with the local or state government to get a business license or permit, as required for hardware stores. Check for specific hardware business regulations in your area.
• Consider any additional licenses or permits specific to the hardware industry, such as those related to selling certain types of equipment or handling hazardous materials.
• Keep all registered documents and certifications accessible as you may need to present them for various business activities and banking procedures.

Resources to help get you started:

Explore critical resources designed for hardware entrepreneurs looking for market trends, operational best practices, and strategic business growth tips:

• Crunchbase: A comprehensive platform for discovering industry trends and tracking startups and investments. https://www.crunchbase.com
• CB Insights: Offers in-depth reports and analyses on various sectors, including hardware, to understand market dynamics. https://www.cbinsights.com
• Make: Magazine: Provides a blend of hardware project ideas, DIY guides, and business tips for hardware startups. https://makezine.com
• Hackaday: A community and blog for hardware hackers, offering insights on emerging hardware trends, projects, and tips. https://hackaday.com
• Hardware Massive: A global platform and community for hardware startups featuring events, webinars, and networking opportunities. https://hardwaremassive.com
• The Hardware Startup: Building Your Product, Business, and Brand: A book offering strategic advice on launching a hardware startup, from prototyping to scaling. Available on Amazon.

Starting a hardware business involves navigating through various regulations to ensure compliance with local, state, and federal laws. Acquiring the necessary licenses and permits is a critical step to legally operate your business and avoid any potential fines or legal issues. Below is a guide to help you through this process:

• Research local business licenses: Contact your city or county government to determine the specific business licenses required to operate a hardware store in your area.
• Obtain a sales tax permit: If your state collects sales tax, you will need to register for a sales tax permit with your state's Department of Revenue or equivalent authority.
• Check for specialized permits: Depending on the products you sell, you may need additional permits, such as those for selling hazardous materials or operating heavy machinery.
• Apply for an Employer Identification Number (EIN): If you plan to hire employees, you'll need an EIN from the IRS for tax purposes.
• Ensure zoning compliance: Verify that your business location is zoned for retail and specifically hardware sales.
• Comply with environmental regulations: Hardware stores often deal with chemicals and substances that require adherence to environmental safety standards set by the EPA or state agencies.
• Stay informed about renewals: Keep track of when each license or permit expires and the process for renewal to maintain continuous compliance.

What licenses and permits are needed to run a hardware business?

To run a hardware business, you will need to obtain various types of licenses and permits, such as a business license, zoning permit, tax license, special permits for hazardous materials and air quality, building permit, seller's permit, and health and safety permits. Additionally, depending on the type of products being sold, specialty licenses may be required for things like firearms or flammable materials. It is important to research the specific requirements for your area to ensure that your business is in compliance with all local, state and federal regulations.

Starting a hardware business requires careful financial planning and management. A crucial step in this process is opening a business bank account to keep your personal and business finances separate. Additionally, securing the necessary funding to cover your startup costs and operational expenses is vital for the success of your business. Follow these guidelines:

• Research banks that offer business banking services and compare their account options, fees, and features to find the best fit for your hardware business.
• Prepare the required documentation, which typically includes your business registration papers, EIN (Employer Identification Number), and personal identification.
• Open your business bank account by visiting a branch or completing the process online, depending on the bank's offerings.
• Explore various funding options such as small business loans, lines of credit, investor funding, or crowdfunding platforms to raise the capital needed.
• Prepare a solid business plan to present to potential lenders or investors, highlighting your business model, market analysis, financial projections, and how you intend to use the funds.
• Consider the Small Business Administration (SBA) loans or local grants for new businesses, which might offer more favorable terms for startups.

Establishing the right pricing for hardware services is crucial for the success of your hardware business. It's important to find a balance that reflects the value of your services while staying competitive in the market. Consider the following points as you set your pricing:

• Cost-Plus Pricing: Calculate the total cost of providing your service, including parts and labor, and add a markup percentage to ensure a profit.
• Market Rate Comparison: Research what competitors charge for similar services to ensure your prices are in line with the market.
• Value-Based Pricing: Price your services based on the perceived value to the customer, especially if you offer specialized expertise or benefits.
• Volume Discounts: Consider offering discounts to customers who purchase services in bulk or sign long-term contracts, to encourage larger sales.
• Dynamic Pricing: Be open to adjusting your prices based on demand, seasonal trends, or the introduction of new technologies and services.
• Transparent Pricing: Make sure your pricing structure is clear and understandable to avoid confusion and build trust with customers.

What does it cost to start a hardware business?

Initiating a hardware business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $200000 for launching such an business. Please note, not all of these costs may be necessary to start up your hardware business.

Starting a hardware business requires careful consideration when it comes to acquiring equipment and supplies. It's essential to procure high-quality items that meet your customers' needs while also ensuring cost-effectiveness. Below are key points to guide you through this crucial step:

• Research your market to understand the demand for specific hardware products and identify the most sought-after items.
• Choose reliable suppliers with good track records for quality, delivery, and service. Consider establishing partnerships or accounts with wholesalers for better pricing.
• Consider the balance between cost and quality when purchasing inventory. Higher-quality items may offer better long-term value to your customers.
• Invest in a robust inventory management system to track your stock levels, sales patterns, and reorder times.
• Ensure that your storage facilities are adequate to preserve the quality and integrity of your hardware supplies.
• Include essential tools and machinery for demonstrations, repairs, or value-added services you plan to offer.
• Don't forget about office and operational supplies, such as computers, point-of-sale systems, and office furniture.
• Plan for safety equipment to protect your employees and comply with local regulations.

List of software, tools and supplies needed to start a hardware business:

• Hardware equipment (starting from $500 - $10,000 depending on the size of the business and the type of hardware)
• Toolboxes and hand tools (between $50 -$500)
• Workbenches, tables and chairs (around $200-$1000)
• Software for hardware inventory, sales & ordering ($30-$200/month depending on features)
• Computer hardware (between $500 to $3000)
• Software for client management (around $12-$50/month)
• Wireless internet connection ($25-$150/month depending on provider and speed
• POS system with receipt printer, scanner & credit card reader (around $170 - $1000)
• Office supplies & stationery ($50 -$200 depending on quantity)
• Storage solutions (shelves and filing cabinets) ($50 to $500 depending on size and features)

Securing the right business insurance is a crucial step in protecting your hardware business against unforeseen events. It is essential to understand the different types of insurance available and determine which ones are necessary for your specific business needs. Consider the following points when obtaining business insurance:

• Evaluate the risks associated with your hardware business to identify the types of insurance that are most applicable, such as property insurance, liability insurance, or product liability insurance.
• Consult with a licensed insurance agent who specializes in commercial policies to get professional advice tailored to your industry.
• Compare quotes from multiple insurance providers to find the best coverage options at a competitive price.
• Ensure that your policy covers all essential aspects of your business, including inventory, equipment, and potential business interruptions.
• Review and understand the terms and coverage limits of your policy to make sure you are adequately protected against claims or damages.
• Consider additional coverage options such as cyber liability insurance if your business operations involve online transactions or data storage.
• Keep your insurance policies up to date and review them annually or whenever there are significant changes to your business operations.

Now that your hardware services are ready to be offered to the public, it's crucial to get the word out to your target market. Marketing your services effectively will help you build brand awareness, attract customers, and differentiate your offerings from competitors. Here are some strategies to kickstart your marketing efforts:

• Develop a strong online presence by creating a professional website and engaging on social media platforms where your potential customers are active.
• Offer promotions and discounts to first-time customers to encourage them to try your services.
• Network with local businesses and attend industry events to build relationships and gain referrals.
• Invest in search engine optimization (SEO) to improve your visibility on search engines and attract organic traffic.
• Use targeted advertising through Google Ads, social media ads, or local print media to reach potential customers effectively.
• Collect customer testimonials and reviews to build trust and credibility with potential clients.
• Partner with other businesses that offer complementary services to cross-promote each other and expand your customer base.

Expanding a hardware business is a critical step that requires strategic planning and execution. It's an opportunity to build on existing successes and capture new market segments. Here are some key points to consider as you plan to grow your hardware business:

• Assess Market Demand: Research to identify potential new markets and customer needs that your business can fulfill.
• Diversify Product Lines: Explore expanding your product offerings to include complementary goods or services that align with your brand.
• Invest in Technology: Utilize modern inventory management systems and e-commerce platforms to streamline operations and extend your reach.
• Strengthen Supply Chains: Forge strong relationships with suppliers to ensure reliable delivery and competitive pricing.
• Enhance Marketing Efforts: Increase your marketing budget to raise brand awareness and reach a wider audience. Consider online and offline strategies.
• Expand Sales Channels: Look into opening more physical locations or expanding online sales channels to access new customer bases.
• Optimize Operational Efficiency: Review and improve internal processes to reduce costs and improve customer service.

Starting Hardware Store Business Plan (PDF)

Starting a hardware store business is an incredibly lucrative venture, boasting robust profit margins and a constant demand for its products and services. As the backbone of any community’s building and repair needs, hardware stores serve as essential hubs where customers can find a wide range of tools, construction materials, and home improvement supplies. These stores are more than just places to purchase tools, supplies, and building materials—they are hubs of knowledge, expertise, and essential resources for homeowners, contractors, and DIY enthusiasts alike. In an era of rapid urban development and increasing home renovation projects, the hardware store industry remains resilient and holds significant growth potential.

It is projected that the 21 st century will continue to be characterized by concerted construction activities. That stems, in part, from the projected increase in the global population. Plus, regions that have had mostly archaic infrastructure are being upgraded. Governments and the private sector are stepping up property and infrastructure development projects. Overall, residential, commercial, and industrial domains are experiencing a construction boom. For instance, the most sought-after materials right now are concrete, steel, and wood. All these dynamics are creating a huge market for hardware supplies. Thus starting a hardware retail store is bound to be lucrative owing to the ever-expanding market.  This article will outline how to start the hardware store business, and the hardware store business plan – PDF, Word and Excel.

Market Research

Carrying out market research is essential before starting the hardware store business. Market research involves identifying a market for hardware products and services, including important measurable characteristics. Seek to find out the market size for hardware products and services. Whilst doing that find out the popular products or services being offered. Check out up to date hardware industry statistics to help you in those regards. There are usually major players already operating and you should study them. Find out what kind of hardware products and services they offer. Find out about the market shares they own and control. Take time to also evaluate their customer dynamics. All this will help you zone in on a strategic target market. That is why the other area to look into is consumer attributes. What are the general hardware buying habits of consumers in your intended target market? What do they buy, how often, and how much do they spend on average? What are their source of incomes and their average incomes? Whilst you can get ready-made reports on these details, it would be wise to also conduct surveys yourself. You can unearth more details this way. By putting all these together you get a comprehensive understanding of the market. You should ensure that you have a hardware business plan before you venture into this business.

Location And Premises for a Hardware Store

A significant percentage of the demand for hardware products and services stems from the construction industry. So you can identify a location at or near a steadily growing residential area where people are at various stages of constructing their houses. It isn’t enough to only look at the steady growth of such areas alone. These must be people who generally have substantial income levels such that they can afford to buy your products. So that shouldn’t be overlooked because you might regret it later if you don’t find out about it prior.

Your location must be spacious enough to have parking space that adequately accommodates any type of vehicle i.e. for customers and suppliers. The interior of the hardware complex will also have to be spacious with products well arranged in a way that optimizes customers’ buying experience. The road network surrounding or leading to the complex must be well networked and in good shape to promote ease of access for both vehicles and those walking in on foot. Your hardware store business plan should take into account the cost of purchasing or renting premises.

Permits/Licenses, Insurance & Business Bank Account

It depends on where you will be operating from but a hardware store business has to be licensed. In most cases it starts from the basic business or company registration that is mandatory. Then you will usually need a hardware store license. You will also have to be registered with the applicable revenue authority for tax purposes. Other types of permits or licenses might be needed depending on the nature of the hardware products or services you deal with. There are countless risk factors associated with running a hardware store. Your hardware store would need insurance cover for at least general liability, property, crime, and workers. You can get more comprehensive details from reputable insurance providers. In addition to all this you must open a business bank account for your hardware store. Desist from using your personal bank account for your hardware store operations. Having a dedicated business bank account streamlines taxation and bookkeeping. It also presents an authentic brand image. It shields you from business debt liability thus protecting your personal assets. In cases where you need to apply for funding it increases your chances of being considered. Costs of insurance and licenses should be included in your hardware store business plan.

Products for a Hardware Store Business

There’s a very broad range of hardware products that you can sell in your hardware store. Some of the broad categories are agricultural implements, tool sets, protective clothing, building materials, electrical items, plumbing supplies, ironwork materials. So the range of products you can sell is quite diverse e.g. cement, bricks, paint, steel rods (or bars), pipes, adhesives, timber products, door frames, window frames ceramics, various kinds of associated accessories, water reservoirs, glassware, safety shoes, nuts, bolts, nails, screws, work suits, various assortments of hand tools and so on.

Your product range can start relatively small and grow as you add more products informed by recurring customer needs. Earlier we discussed about doing market research because it greatly helps you in knowing what to put in stock. Obviously your hardware store business plan should include money for purchasing the hardware products. Usually as a business person you might be having financial challenges to startup the business so it would be important to know what’s in demand and start off with that.

Inventory Management

Inventory management (or inventory control) refers to the recording and tracking of hardware stock in your store.  Proper inventory management is key to having a profitable hardware store business. The goal is to maintain an optimum number or amount of all inventory items. You should be able to have in stock what a customer seeks. You should be able to detect in good time hardware items that need to be replenished. If this is not properly done it leads to disruptions in sales thus negatively affecting the profitability of your hardware store business. In this day and age you are better off using inventory management software than using manual approaches. The ideal setup is to have an electronic point of sale system or software (EPOS) for your hardware store business. An EPOS with an integrated inventory management function is the best.

Business Model

The business model is the fundamental framework that outlines how a hardware store operates, generates revenue, and creates value for its customers. In the hardware store industry, the most common business model involves the sale of a wide range of tools, building materials, hardware, and related products to both individual consumers and contractors. This model often relies on maintaining an extensive inventory of products to meet the diverse needs of customers. Revenue is primarily generated through the sale of these products, with profit margins varying based on the type of items sold.

To enhance profitability, hardware stores often adopt a mix of strategies. They may offer additional services such as tool rental, key cutting, paint mixing, or even repair services for certain tools and equipment. These supplementary services not only generate additional income but also create a more comprehensive customer experience, making the store a one-stop destination for various hardware-related needs.

In recent years, hardware stores have also embraced digital transformation by establishing an online presence. This allows customers to browse products, check inventory, and place orders online, which can significantly expand the store’s reach and customer base. Some hardware stores may also explore e-commerce as a complementary revenue stream, allowing them to tap into a broader market beyond their physical location. Overall, the hardware store business model continues to evolve to meet the changing needs and preferences of customers while remaining grounded in providing essential products and services for home improvement and construction projects.

Competitive Analysis

Competitive analysis is the assessment of the differences between your hardware store’s performance and that of its competitors. The goal is to detect and examine the factors that cause those differences. In essence you are studying your competition in order to outsmart them. What you unearth from competitive analysis informs your business strategy. Identify who your competitors are and segment them e.g. primary (major focus), secondary, and tertiary. Assess their place or stake in the market. Then do a comparison of what they offer and what you intend to offer. When doing competitive analysis for your hardware store business, you are not just assimilating information. The thrust is to identify market gaps which will be the openings you need. Lacking in skillsets and experience on the current players can be a market gap. You will also get to notice some outstanding pain points consumers still struggle with. Maybe there could be a hardware niche or niches that are underserved – those are market gaps. Regulatory and legislative aspects can also provide insights into market gaps. The marks of a well done competitive analysis will be you identifying market gaps.

Staff And Management

The effective running of a hardware business requires a significant workforce. As a rule of thumb staffing needs are always informed by your intended scale of operations. Some of the key areas in this business are operations management, supply chain management, financial management and inventory management. You’ll need cashiers/till operators, general hands, supervisors, shop attendants and customer attendants as some of the vital components of your operations management team.

The operations team will be central to overseeing the supply chain and inventory management aspects. You must understand that smooth flow of a hardware store business entails consistent monitoring and evaluation of stocks. There’s also a need for a seamless framework for timeous sourcing and receipt of stock from suppliers. Financial accounting is critically important for a hardware business so as to empirically keep track of all transactions.

A hardware shop business also draws more customers when it offers delivery services. Having marketing agents is also strategic because marketing needs serious attention in light of the existence of competitors. As you can see, synching and optimizing all these components together requires a strong and dedicated team. The top management will, depending on scale of operations, constitute of either qualified hired personnel or family members. The hardware business plan should include provisions of salaries for all your workforce.

The major causes of failure of hardware stores include poor financial management resulting in losses. No wonder financial accounting must be thoroughly done when running this business. It’s also encouraged that you conduct stock takes regularly, an exercise that’ll feed into your financial management efforts.

Marketing Plan

Digital marketing must be your biggest focus. Get a website developed for the business to have brand visibility online. Buttress this by setting up active social media accounts on Facebook, LinkedIn, WhatsApp, Instagram and Twitter. Leverage on those platforms’ features such as stories, reels, and status updates to daily send out brand awareness content. Take advantage of print (e.g. fliers, posters, banners) and digital (e.g. e-fliers) media for brand awareness. Aim at exhibiting or being at strategic events such as trade fairs, expos, and the like. Explore options to get featured in strategic publications such as blogs, newspapers, podcasts, radio shows, and so on. Come up with promotionals e.g. discounts. Institute a customer loyalty programme which will be instrumental in boosting word of mouth marketing. Engage social media influencers to tap into large pools of potential customers. Overall, strive to devote at least 5 percent of your revenue towards marketing initiatives. The hardware store business plan should include a proper marketing plan for your business.

Market for Hardware Products

There are several customer sources for a hardware shop. These include building and construction (both new constructing projects and renovations), Do It Yourself (DIY) projects, agriculture industry, electrical and plumbing projects, and maintenance work. Property owners carry out renovations, upgrades, repairs on their properties, and to do that they need hardware products.  Other potential customers for a hardware store business include construction companies, organisations, housing cooperatives, schools, private companies, individuals, farmers and the government.

Keys To Profitability

Starting a hardware store business can be a lucrative venture, but like any other business, success depends on various factors. To ensure profitability in your hardware store, it’s crucial to focus on a few key strategies. First and foremost, effective inventory management is essential. Maintaining the right balance of products, avoiding overstocking or understocking, and regularly reviewing your inventory can help reduce carrying costs and increase your bottom line. Additionally, understanding your target market and offering products that cater to their specific needs and preferences can set you apart from the competition and boost sales. Diversifying your product range is essential. Offering a diverse selection of products, including traditional hardware items, seasonal products, tools, gardening supplies, and home improvement materials, can attract a broader customer base and increase sales opportunities throughout the year. Cost control is another crucial aspect of profitability. Carefully monitor expenses and overhead costs, and regularly review your financial statements to identify areas where you can cut unnecessary spending. Negotiating favorable terms with suppliers, considering bulk purchasing for commonly sold items, can help you secure better pricing on products, increasing your profit margins.

An efficient store layout and visual merchandising are critical. Creating an organized and visually appealing store layout that makes it easy for customers to find what they need can encourage impulse purchases and boost overall sales. Proper signage and strategic product placement can further enhance the shopping experience. Provide exceptional customer service. Customers often return to stores where they receive personalized assistance, expert advice, and a pleasant shopping experience. Well-trained and knowledgeable staff can make a significant difference in customer satisfaction and loyalty. Embracing technology and modernizing your hardware store operations can contribute to profitability. Implementing point-of-sale systems, inventory management software, and an online presence can streamline processes, improve efficiency, and attract a wider customer base. Marketing and promotion are indispensable for drawing customers to your hardware store. Utilize a combination of traditional advertising methods, such as local newspapers and flyers, along with digital marketing techniques like social media, email campaigns, and a user-friendly website. Offering promotions, discounts, and loyalty programs can incentivize repeat business and increase revenue.

Advantages Of A Hardware Store Business

Starting a hardware store business offers several compelling advantages that make it a promising venture in the retail industry. First and foremost, hardware stores benefit from a steady and consistent demand for their products. Whether it’s for routine home maintenance, DIY projects, renovations, or construction work, people rely on hardware stores year-round, providing a reliable customer base that can help stabilize your store’s revenue over time. Providing excellent customer service and a well-stocked inventory can lead to repeat business. Many customers return to hardware stores for ongoing projects, maintenance, or additional supplies. Building a loyal customer base can contribute significantly to long-term success.

Another significant advantage is the diverse product range that hardware stores typically offer. From basic tools and fasteners to power equipment and building materials, these establishments cater to a broad spectrum of customers, including homeowners, contractors, do-it-yourself enthusiasts, and hobbyists. This diversity not only broadens your customer base but also increases sales opportunities, as customers often find a wide array of products under one roof, making their shopping experience more convenient. The business is also very profitable. While individual items may have lower profit margins, hardware stores often make up for it through the volume of sales. High inventory turnover and a consistent flow of customers results in healthy overall profit margins.

Additionally, hardware stores tend to be recession-resistant businesses. During economic downturns, people often prioritize home maintenance and smaller-scale improvement projects, rather than undertaking major renovations or new construction. This inclination toward more modest projects can lead to increased sales for hardware stores, making them relatively resilient in challenging economic times. This stability is a compelling advantage for entrepreneurs looking to invest in a business with long-term sustainability.

Why You Need A Hardware Store Business Plan

A business plan is instrumental in helping you comprehend the profitability of your hardware store business by providing a detailed financial analysis. It outlines the expected revenue streams, including sales projections, pricing strategies, and market demand analysis. Moreover, it delves into the various factors that impact profitability, such as operational costs, volumes sold and markup margins. By quantifying these variables and examining their interplay within the plan, you can gain a comprehensive understanding of the financial landscape, enabling you to make informed decisions, identify potential areas for cost optimization, and ultimately enhance the profitability of your hardware store.

A business plan is also an essential tool for securing funding for your hardware store business. It serves as a detailed blueprint that demonstrates your business’s viability, growth potential, and financial projections to potential investors, lenders, or partners. A well-structured business plan showcases your understanding of the market, competition, and target audience, instilling confidence in financiers about the soundness of your venture. It provides a clear roadmap for how you intend to utilize the funding and achieve your business objectives, giving investors assurance that their investment will be wisely used. In essence, a business plan is your persuasive document that not only attracts financial support but also establishes a sense of trust and credibility, making it a vital tool in securing the funding needed to launch or expand your hardware store.

A comprehensive hardware store business plan is an indispensable asset for those embarking on or expanding their hardware store ventures. It provides clarity of vision, enabling you to define your store’s mission, vision, and objectives clearly. Articulating your business’s purpose and outlining your goals ensures that you and your team are on the same page, working towards a common vision. It also serves as a strategic roadmap, delineating the strategies and tactics essential for your hardware store’s growth and development. This roadmap helps in making informed decisions and acts as a reference point for measuring progress and making necessary adjustments in a dynamic market landscape.

Pre-Written Hardware Store Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements

For an in-depth analysis of the hardware store business, we encourage you to purchase our well-researched and comprehensive hardware business plan. We introduced the business plans after discovering that many were venturing into the hardware business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.

The StartupBiz Global hardware shop business plan will make it easier for you to launch and run your hardware store business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the hardware business.

Uses of the Hardware Business Plan (PDF, Word And Excel)

The hardware shop business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your hardware retail business
• As a hardware store business proposal
• Assessing profitability of the hardware business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the Hardware Store Business Plan (PDF, Word And Excel)

The hardware business plan include, but not limited to:

• Industry Analysis
• Marketing Strategy
• Market Analysis
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in the hardware business fail, so that you can avoid their mistakes
• Ways to raise capital to start your hardware store business

The hardware business plan package consists of 4 files

• Hardware Store Business Plan – PDF file (Comprehensive Version – 70 Pages)
• Hardware Shop Business Plan – Editable Word File (Comprehensive Version – 70 Pages)
• Hardware Store Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 44 pages)
• Hardware Store Business Plan Automated Financial Statements – (Editable Excel File)

The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the percentage markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

Click below to download the Contents Page of the Hardware Store Business Plan (PDF)

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Get the Hardware Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your hardware store business! Check out our collection of business plans  , and more business ideas .

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How to Start a Hardware Store

Starting a hardware store can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful hardware store.

Importantly, a critical step in starting a hardware store is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Hardware Store :

• Choose the Name for Your Hardware Store
• Develop Your Hardware Store Business Plan
• Choose the Legal Structure for Your Hardware Store
• Secure Startup Funding for Your Hardware Store (If Needed)
• Secure a Location for Your Business
• Register Your Hardware Store with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Hardware Store
• Buy or Lease the Right Hardware Store Equipment
• Develop Your Hardware Store Marketing Materials
• Purchase and Setup the Software Needed to Run Your Hardware Store
• Open for Business

1. Choose the Name for Your Hardware Store

The first step to starting a hardware store is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your hardware store:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your hardware store.

2. Develop Your Hardware Store Business Plan

One of the most important steps in starting a hardware store is to develop your business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your hardware store.
• Company Overview – this section tells the reader about the history of your hardware store and what type of hardware store you operate. For example, are you a home improvement store, a specialty hardware store, or a big-box store?
• Industry Analysis – here you will document key information about the hardware industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract a loyal customer base to your hardware store? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your hardware store make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

3. choose the legal structure for your hardware store.

Next you need to choose a legal structure for your hardware store and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the hardware store owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to open a hardware store together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a hardware store include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a hardware store is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your hardware store, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Startup Funding for Your Hardware Store (If Needed)

In developing your hardware store business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a hardware store to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a hardware store that they believe has high potential for growth.

5. Secure a Location for Your Business

There are a few things to consider when looking for a location for your hardware store. 

First, you’ll want to think about the population of the area. You’ll want to be sure there are enough people in the area who will be potential hardware shoppers. 

Additionally, you’ll want to think about the competition. If there are already several independent hardware stores in the area, you’ll need to find a location that offers something different or better than what is already available. 

You’ll also need to find a space that is big enough to fit all of your inventory. Finally, you’ll want to think about your budget and find a location that is affordable.

6. Register Your Hardware Store with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire store personnel, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your hardware store’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your hardware store to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing a small business loan and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

To launch a hardware store, you will need a business license and a tax ID number. You will also need to contact your local zoning commission to find out what restrictions are placed on hardware stores in your area. Depending on the size of your store and how it will be laid out, you may need a building permit.

10. Get Business Insurance for Your Hardware Store

The insurance you need to operate a hardware store may vary depending on your state’s laws and regulations. 

Some common business insurance policies you should consider for your own shop include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Hardware Store Equipment

To run a hardware store, you will need the following equipment: cash register, computer, phone, security cameras, and shelves.

12. Develop Your Hardware Store Marketing Materials

Marketing materials will be required to attract and retain customers to your hardware store.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your hardware store. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional hardware store website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your hardware store.

13. Purchase and Setup the Software Needed to Run Your Hardware Store

To run a hardware store, you will need accounting software and customer relationship management (CRM) software. You will also need software that will help you manage your inventory, track your sales, and create purchase orders. Additionally, you will need a point of sale (POS) system to handle purchases made by customers.

14. Open for Business

You are now ready to open your hardware store. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start a Hardware Store FAQs

Is it hard to start a hardware store.

No, it is fairly easy to launch a hardware store. All you need is an idea of the type of product you want to sell and where you want to sell it. You should also define your business model and plan how you're going to market, promote, maintain, and manage it.

How can I start a hardware store with no experience?

There are a few ways to go about starting a hardware store with no retail and hardware experience. One way would be to research the industry and learn as much as possible about the business. Another option would be to team up with someone who has experience in the industry. Finally, you could take on a consultant to help you get started. Whichever path you choose, make sure you have a clear plan and are prepared to put in the hard work necessary to make your own hardware store a success.

What type of hardware store is most profitable?

Generally speaking, stores that sell higher-priced items such as appliances or tools tend to be more profitable than stores that sell lower-priced items such as plumbing supplies or light bulbs. Additionally, stores that are located in high-traffic areas tend to be more profitable than stores that are located in low-traffic areas.

How much does it cost to start a hardware store?

It can cost a lot of money to open a hardware store. You'll need to invest in inventory, and you'll also need to pay for rent, utilities, and employee salaries.

Some startup costs involved in starting a hardware store include:

• Security system 
• Computer system 
• Purchasing inventory
• Credit card machines
• Building a retail space
• Fixtures and display cases
• Licenses and permits

What are the ongoing expenses for a hardware store?

Ongoing expenses for a hardware store generally include utilities, rent, and inventory. Additional expenses to keep in mind include insurance and wages.

How does a hardware store make money?

Hardware store owner s make money by selling products to repair or improve a home. These products can include tools, building supplies, appliances, and more. The store makes money by selling products and by charging customers for the labor to install hardware or appliances.

Is owning a hardware store profitable?

Owning a hardware store can be a profitable business venture. This is because hardware shops typically have high margins. This means that the store can sell products at a higher price than it paid for them, and thus make a profit. 

Why do hardware stores fail?

Most hardware stores lose a large portion of their clientele due to the internet and the fast-paced shopping experience that comes with it. A lot of people now choose to order online because they can do so from the convenience of their own homes with the click of a mouse. Most often these transactions will be cheaper as well.

Another common reason hardware stores fail is from being in business for too long without changing their offerings with evolving customer preferences. Sometimes they fail because consumers simply need different goods than what the old-fashioned store offers. For instance, key cutting, lawn care booklets, or landscaping materials may not be as in demand as they once were.

Finally, some chain retail hardware stores fail because they are in the wrong location. If the store is in a location that is not easily accessible or visible to passersby, it may not get enough customers to sustain its operations.

Other Helpful Business Plan Articles & Templates

Start a Hardware Store

Building Dreams with Your Own Hardware Store

HARDWARE STORE

Related business ideas, discover your perfect domain, hardware store mini business plan, earnings expectations:, actions to hit those numbers:, not what you had in mind here are more ideas, grab your business website name, step 1: determine if starting a hardware store is right for you, breakdown of startup expenses, breakdown of ongoing expenses, examples of ways to make money, step 2: name the business, step 3: develop a business plan, outline of goals and objectives, market analysis, financial plan, step 4: secure financing, options for financing, tips on securing financing, step 5: choose a location, step 6: obtain necessary licenses and permits, applying for licenses and permits, cost of licenses and permits, renewing licenses and permits, step 7: set up shop, inventory and supplies needed, tips on setting up shop, step 8: market the business, step 9: monitor the business, explore more categories, take the next steps.

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Hardware Store Business Plan and SWOT Analysis

Hardware Store Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Hardware Store Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Hardware Store business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be available for download after your purchase.

Product Specifications (please see images below):

• Bank/Investor Ready!
• Complete Industry Research
• 3 Year Excel Financial Model
• Business Plan (26 to 30 pages)
• Loan Amortization and ROI Tools
• Three SWOT Analysis Templates
• Easy to Use Instructions
• All Documents Delivered in Word, Excel, and PDF Format
• Meets SBA Requirements

Despite the rise in big-box stores, local hardware stores remain popular especially in rural markets. These businesses are able to provide a number of items that are commonly used by people engaging in home repair, or among contractors that need specific parts for specific jobs. The gross margin is generated by a hardware store are considered a moderate and are typically around 50%. The startup costs associated with this type of business is usually around $100,000 to $200,000 depending on the size of the store and the amount of inventory that we carried at the onset of operations. These businesses often thrive when he develop ongoing relationships with area real estate developers and general contractors that need specialty parts on an ongoing basis. This is one of the ways that many smaller hardware stores are able compete with their big-box competitors.

Given the economic stability of these businesses, many banks are willing to provide a strong degree of capital support for the establishment or expansion of a hardware store. In this case, a hardware store business plan is going to be required. This business plan should feature a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. A full-scale competitive analysis should be included within the business plan in order to ensure that the small hardware store is not in a direct competition with a big box retailer. A large-scale demographic profile should be included as well that not only takes a look at people engaging in their own home improvements, but also among real estate developers and general contractors that will use the business on an ongoing basis. If the entrepreneur is seeking capital from the bank then he the substantial analysis of the collateral that will be acquired with the borrowed funds should be included as well.

A hardware store SWOT analysis should also be produced. As it relates to strengths, hardware stores are typically able to remain profitable and cash flow positive in any economic climate, while also having the ability to expand rapidly once they establish a client base, and the barriers to entry are considered a moderate.

For weaknesses, these businesses face constant pressure from large-scale big-box retailers that are able to provide their customers with an expansive selection of general and specialty merchandise. As such, the hardware store must find ways that allows them to differentiate themselves from other competitors in the market.

For opportunities, these businesses can readily expand by simply establishing new locations in markets that do not have a significant number of other hardware stores in operation. Additionally, these businesses can develop specialty service lines that allows them to provide a differentiating factor.

Outside of the ongoing competitive issues associated with a hardware store, there are no known threats that would impact the way that these companies conduct business.

As it relates to the hardware store marketing plan, a full-scale marketing and advertising campaign should be undertaken in order to familiarize area general contractors, roofers, real estate developers, electricians, plumbers, and other trades people with the products and services that are offered to the hardware store. This will ensure an ongoing and predictable stream of revenue from the Onset of operations. Additionally, a large-scale marketing campaign that targets individual homeowners should also be done. This will allow the business to effectively reach an audience of people who are in continual need of specialty hardware products. Additionally, many local hardware stores often focus on the fact that this is a locally owned business and supports an area business person. A substantial online presence should also be included that may or may not feature e-commerce functionality. By listing the entire inventory of the hardware store on this website, which should be mobile friendly, the hardware store can effectively reach a large number of people within a local or regional market. A web development firm can be hired to assist the entrepreneur in developing this type of online platform.

Hardware stores are going to be around forever about the technology that is associated with delivering these products to homeowners as well as contractors has changed significantly. By operating a highly specialized capacity, many entrepreneurs have found that they are able to thrive as a hardware store owner. This is especially true if the hardware store maintains employees that can assist the homeowner with completing a specific project. As such, these businesses can remain profitable despite changes in the economy as well as continued changes in the hardware product marketplace.

• Business Plans Handbook
• Business Plans - Volume 02
• Hardware Store Business Plan

Hardware Store

FICTIONAL BUSINESS PLAN

OSHKOSH HARDWARE, INC.

123 Main St. Oshkosh, WI 54901

The following fictional plan outlines how a small hardware store can survive competition from large discount chains by offering products and providing expert advice in the use of any product it sells. This plan is fictional and has not been used to gain funding from a bank or other lending institution.

EXECUTIVE SUMMARY

The business, goals implementation.

• JOB DESCRIPTION-GENERAL MANAGER

QUARTERLY FORECASTED BALANCE SHEETS

Quarterly forecasted statements of earnings and retained earnings, quarterly forecasted statements of changes in financial position, financial ratio analysis, details for quarterly statements of earnings.

Oshkosh Hardware, Inc. is a new corporation which is going to establish a retail hardware store in a strip mall in Oshkosh, Wisconsin. The store will sell hardware of all kinds, quality tools, paint and housewares. The business will make revenue and a profit by servicing its customers not only with needed hardware but also with expert advice in the use of any product it sells.

Oshkosh Hardware, Inc. will be operated by its sole shareholder, James Smith. The company will have a total of four employees. It will sell its products in the local market. Customers will buy our products because we will provide free advice on the use of all of our products and will also furnish a full refund warranty.

Oshkosh Hardware, Inc. will sell its products in the Oshkosh store staffed by three sales representatives. No additional employees will be needed to achieve its short and long range goals. The primary short range goal is to open the store by October 1, 1994. In order to achieve this goal a lease must be signed by July 1, 1994 and the complete inventory ordered by August 1, 1994.

James Smith will invest $30,000 in the business. In addition the company will have to borrow $ 150,000 during the first year to cover the investment in inventory, accounts receivable, and furniture and equipment. The company will be profitable after six months of operation and should be able to start repayment of the loan in the second year.

The business will sell hardware of all kinds, quality tools, paint, and housewares. We will purchase our products from three large wholesale buying groups.

In general our customers are homeowners who do their own repair and maintenance, hobbyists, and housewives. Our business is unique in that we will have a complete line of all hardware items and will be able to get special orders by overnight delivery. The business makes revenue and profits by servicing our customers not only with needed hardware but also with expert advice in the use of any product we sell. Our major costs for bringing our products to market are cost of merchandise of 36%, salaries of $45,000, and occupancy costs of $60,000.

Oshkosh Hardware, Inc.'s retail outlet will be located at 1524 Frontage Road, which is in a newly developed retail center of Oshkosh. Our location helps facilitate accessibility from all parts of town and reduces our delivery costs. The store will occupy 7500 square feet of space. The major equipment involved in our business is counters and shelving, a computer, a paint mixing machine, and a truck.

Oshkosh Hardware, Inc. will operate in the local market. There are 15,000 potential customers in this market area. We have three competitors who control approximately 98% of the market at present. We feel we can capture 25% of the market within the next four years. Our major reason for believing this is that our staff is technically competent to advise our customers in the correct use of all products we sell.

After a careful market analysis we have determined that approximately 60% of our customers are men and 40% are women. The percentage of customers that fall into the following age categories are:

The reasons our customers prefer our products is our complete knowledge of their use and our full refund warranty.

We get our information about what products our customers want by talking to existing customers. There seems to be an increasing demand for our product. The demand for our product is increasing in size based on the change in population characteristics.

At Oshkosh Hardware, Inc. we will employ three sales people and will not need any additional personnel to achieve our sales goals. These salespeople will need several years experience in home repair and power tool usage. We expect to attract 30% of our customers from newspaper ads, 5% of our customers from local directories, 5% of our customers from the yellow pages, 10% of our customers from family and friends and 50% of our customers from current customers. The most cost-effective source will be current customers. In general, our industry is growing.

We would evaluate the quality of our management staff as being excellent. Our manager is experienced and very motivated to achieve the various sales and quality assurance objectives we have set. We will use a management information system which produces key inventory, quality assurance and sales data on a weekly basis. All data is compared to previously established goals for that week and deviations are the primary focus of the management staff.

The short term goals of our business are:

• Open the store by October 1, 1994
• Reach our breakeven point in two months
• Have sales of $ 100,000 in the first six months

In order to achieve our first short term goal we must:

• Sign the lease by July 1, 1994
• Order a complete inventory by August 1, 1994

In order to achieve our second short term goal we must:

• Advertise extensively in September and October
• Keep expenses to a minimum

In order to achieve our third short term goal we must:

• Promote power tool sales for the Christmas season
• Keep good customer traffic in January and February

The long term goals for our business are:

• Obtain sales volume of $600,000 in three years
• Become the largest hardware dealer in the city
• Open a second store in Fond du Lac

The most important thing we must do in order to achieve the long term goals for our business is to develop a highly profitable business with excellent cash flow.

Oshkosh Hardware, Inc. Faces some potential threats or risks to our business. They are discount house competition. We believe we can avoid or compensate for this by providing quality products complimented by quality advice on the use of every product we sell. The financial projections we have prepared are located at the end of this document.

JOB DESCRIPTION: GENERAL MANAGER

The General Manager of the business of the corporation will be the president of the corporation. He will be responsible for the complete operation of the retail hardware store which is owned by the corporation. A detailed description of his duties and responsibilities is as follows:

Train and supervise the three sales people. Develop programs to motivate and compensate these employees. Coordinate advertising and sales promotion effects to achieve sales totals as outlined in budget. Oversee purchasing function and inventory control procedures to insure adequate merchandise at all times at a reasonable cost.

Prepare monthly and annual budgets. Secure adequate line of credit from local banks. Supervise office personnel to insure timely preparation of records, statements, all government reports, control of receivables and payables and monthly financial statements.

Administration

Perform duties as required in the areas of personnel, building leasing and maintenance, licenses and permits and public relations.

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Starting a Hardware Store Business in South Africa – Business Plan (PDF, Word & Excel)

Posted by BizBolts | All Articles , Business Ideas , Business Plans , Retail Industry

Hardware stores in South Africa provide a variety of goods like building materials, plumbing supplies, electrical products, tools, and hardware equipment. A hardware store is a very lucrative business to start in South Africa, with huge profits. Hardware stores cater for both large and small projects. These projects range from small home improvements to big construction projects. The tools and materials needed to complete these types of projects are available at hardware stores. Setting up a hardware store can be a very rewarding experience. However, it is critical to remember that in order to be successful in the long run, you must constantly expand your business. These days, hardware stores have to offer more than just tools and building supplies. It is important to find ways to differentiate your shop from the competition to draw customers’ attention to your business. This article will outline how to start a hardware store business in South Africa, and the hardware store business plan – PDF, Word and Excel.

Market Research

It’s important that you carry out market research before you start the hardware store business. Important decisions to make include deciding on the location of your business, the products you will offer, your target market and the size of your business. Understand your target market, and what kind of products they want. Assess the competition at your proposed location. You should always carry out a feasibility study, market research and write a business plan before you venture into any business. Do not make the mistake of starting a hardware store business before carrying out research and without a good hardware store business plan.

When setting up a hardware store, you need to understand your customers. If you do not understand your customers, you will have a hard time making informed decisions on where to open your business, where to locate your store, and the right hardware products to sell. You must know who your customers are, and why they would buy from you. When conducting market research, look for common characteristics and interests among the people you intend to target. Gather as much information as you can about your potential clients. Some important factors to consider include their age in terms of generation, where they live, and their spending habits. This will help you understand which geographic areas to target and figure out what hours are most important for your customer service and sales reps to be available. That information will help you schedule your marketing promotions offline and online to ensure the best visibility. Understanding spending power and patterns will help you set competitive prices for your hardware products. You must also learn about your potential clients’ hobbies and interests, especially if they are DIY junkies or only buy hardware products when something is broken. Understanding their interests will also help you find ways to keep your clients engaged.

Hardware store Business Model

A hardware store typically sells hand and power tools, building materials, fasteners, keys, locks, hinges, chains, electrical supplies, plumbing supplies, cleaning products, housewares, utensils, and paint. The products and services your hardware store will offer can range from small nails to power tools. To make more profits, you can earn additional revenue by delivering these products to your customers or by holding DIY tutorials. When looking for customers, consider homeowners, contractors, and DIY consumers. Take advantage of social media marketing by posting videos on TikTok, Instagram, Facebook, and LinkedIn. It is much easier to attract these kinds of customers, who will need to source supplies for their projects. You can also set up trade accounts with local tradesmen to earn consistent business. Making your business more profitable would mean supplementing your main source of income with other services. You can partner with a local carpenter and offer installation services in addition to the carpeting products you sell. You can also do this for windows, doors, roofing, or any other major project.

Location & Premises

Business premises that have a high ceiling are ideal for hardware stores to create ample storage space. The premises also need to be quite spacious in terms of width, you might have to use a forklift to move large and heavy building materials. The space needs to be large enough to fit all your products. Your premises should also be easily accessible by trucks, as this creates convenience when delivering your products from suppliers or when customers are collecting their products.

Location is an important decision to make, and it’s determined by your target market. There are several places when you can locate your hardware store. People are always looking to improve their homes by extending them or renovating them. Residential areas are ideal places to set up shop. A hardware store at a residential area will need you to understand your market so that you can offer exactly what they need. Explore unlikely locations such as rural areas. Houses are expensive and land is also expensive in urban areas some have resorted to building their dream houses at rural areas where land is ample and building is much cheaper. Rural areas that still don’t have electricity and running water have less construction and developments happening compared to rural areas with electricity and running water. There are new development projects that take years to complete due to the amount of construction and the amount of work involved. The work is mostly completed in phases and can take up to 8 years to complete. Opening a hardware store close to a new development project can prove to be lucrative. Your hardware store business plan should cater for the costs of renting or buying premises.

Products for Hardware Store Business

Hardware shops in South Africa sell a variety of products including building materials, plumbing materials, tools, safety materials, agricultural equipment and electrical products. Examples of hardware products include Brickforce , Cement, Door Frames, Window Frames , Doors , Glass, Asbestos , Ceiling Products , Tiles, Abrasives , Adhesives , Brushware, Hinges , Nuts, Bolts, Nails, Screws,  Sockets , Cables, Fencing & Wire , Lawnmowers , Wheelbarrows , Hoses, DIY Hand Tools , Screwdrivers , Spanner Sets , Paint, Water Tanks, Timber Boards, Bathroom Accessories, Toilet Seats , Safety Boots & Shoes, Pipes, Hand tools,  Power tools,  Garden tools etc. The kind of products which you sell will depend on your targeted market and the amount of capital which you have. The products can be sourced from South Africa manufacturers, Distributors and International Suppliers. 

Inventory Management

Taking control of your stock is an important part of running any kind of business that handles inventory. If you do not get that right, it will negatively impact your profit margins. For a hardware store business, you need stock control software that is especially built for your industry. In order to get the best possible results for your business, your stock management software should work seamlessly with both your point of sale and accounting functions. This will help you efficiently and accurately track the movement of stock through your hardware store. Consider an efficient inventory management software for your hardware store that can highlight areas of your business for improvement. Inventory management will help you prevent employee theft and keep track of your inventory. A proper stock management for hardware stores will enable your company to track best-selling versus underperforming products. This way you can analyze your sales and profits and potentially revise any pricing strategies that aren’t generating maximum profit.

Competitive Analysis

When you open a hardware store, you will be competing with a number of other stores, all of whom are vying for the largest market share. In order for you to stand out, you need to conduct a market analysis. You must know who your direct and indirect competitors are, as well as the products and services they offer, and who their customers are. You must find out what your competitor’s strengths and weaknesses are. A competitive analysis will also assist you in figuring out where you fit in the market. There are a number of opportunities that you can take advantage of, which a competitive analysis can help with. You need to figure out where there are gaps within the hardware market. There are various big and small hardware stores in the country that you will compete with, so it is important to conduct a competitive analysis and find your place in the market.

Staff & Management

The number of employees you need will depend on the size of your hardware store business. The is need for finance/accounting personnel who will be responsible for all the day to day transaction accounting for the hardware store business. This will include the tracking of all transactions and the management of cash flow, and ensuring there are enough funds available to meet the day to day payments.

Operations & logistics personnel are responsible for coordinating with suppliers and sourcing all the products which will be sold in the hardware, and arranging delivery of sold products to customers. They are also responsible for inventory control, ensuring that the shop has all the products in stock and in the right quantities, and determining when to place new orders. You also require cashiers and hardware shop assistants. Your hardware shop business plan should cater for the salaries of your employees.

Knowledgeable staff members will add value to your team by helping the customers buy the correct products. There is a wide range of products available at hardware stores, customers often get confused. Anyone can easily find themselves making small blunders such as purchasing wall tiles instead of floor tiles. If you have inexperienced staff members on your team their training program should focus more on learning about the different products sold in the store so they are able to give informed advice to customers.

Sales and Marketing Plan

There are different kinds of hardware stores that sell various products, and then there are stores that specialize in specific types of hardware, such as plumbing supplies or electrical products. One way to stand out is by specializing in a specific type of hardware product. You can make your store more appealing to customers looking for a particular kind of product. This can also make your store more efficient by stocking specific products you need. Another way to make your hardware store business stand out, is by offering products that your customers can’t find at other stores. Providing unique or hard-to-find products can help you set your store apart from the competition and attract new customers looking for specific products. It can also help you create a sense of exclusivity, making your store more appealing to customers. You can also do this by catering to a specific audience. This could be focusing on customers looking for high-end products or catering to a specific demographic, such as do-it-yourselfers or professional contractors. By focusing on a specific audience, you are able to create a more targeted marketing strategy and better understand your customers’ needs. This will help you improve your store’s product selection as well as create a more enjoyable shopping experience for your customers.

A hardware business has multiple sources of customers, these include; building & civil construction, home and business renovations, small DIY projects, agriculture, and maintenance work. All these projects can’t be completed without a hardware store. This type of business has the advantage of offering services to a market that’s totally dependent on it. Having a reliable market makes you feel more secure and confident, you feel less anxious about the possibilities of failure. You already have a reliable market, it’s all up to you to make sure that you are ahead of your competition. Studying what your competitors do with the intention to see what you can do better will help you get ahead.

Many individuals are constructing houses in South Africa, and are always in need of the building materials.   From time to time individuals carry out improvements, repairs and upgrades on their properties, and this requires hardware products. Other potential customers include farmers, organisations, schools, companies, construction companies, housing cooperatives and the government.

PRE-WRITTEN HARDWARE STORE BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS

For an in-depth analysis of the hardware shop business in South Africa, purchase our hardware store business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the hardware business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.

Our business plan will make it easier for you to launch and run a hardware shop business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the hardware shop business plan will lay out all the costs involved in setting up and running the hardware business. The business plan is designed specifically for the South African market.

USES OF THE HARDWARE SHOP BUSINESS PLAN (PDF, WORD AND EXCEL)

The hardware store business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your hardware shop business
• As a hardware store project proposal
• Assessing profitability of the hardware stores business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

CONTENTS OF THE HARDWARE STORE BUSINESS PLAN (PDF, WORD AND EXCEL)

The business plan includes, but not limited to:

• Market Analysis
• Industry Analysis
• 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually),break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
• Marketing Strategy
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some South Africans in the hardware business fail, so that you can avoid their mistakes
• Ways to raise capital to start your hardware store business in South Africa
• Directory (Contact details of hardware products suppliers)

The Hardware Store Business Plan package consist of 4 files

• Hardware Store Business Plan – PDF file (Comprehensive – 83 pages)
• Hardware Store Business Plan – Editable Word File (Comprehensive – 83 pages)
• Hardware Store Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 48 pages)
• Hardware Store Business Plan Automated Financial Statements – (Editable Excel file)

Testimonial 6

It is with excitement and pleasure to inform you that I have been successful in securing a loan from my bank. This would not have been possible if not for the BizBolts Business Plan. Thank you for your help, my dreams are now coming true.

Testimonial 3

The business plan has a highly professional look and feel. The research really helps me look deep into the market that I am targeting, it’s well suited for the South African market. The business plan clearly outlined everything I need to start the business and the costs. It’s now easier to budget and plan. Thank you very much.

Testimonial 4

The business plan was very helpful, you did a great job of taking ideas and putting them into words as well as pointing out other aspects of the business plan I wouldn’t have thought of. I got funding using your business plan and it’s now 4 months since I started my poultry business, and everything is going well.

Testimonial 5

The BizBolts poultry business plan led us down the path from start to finish. Contact details of suppliers of key requirements were included in the business plan. It helped us crystallize our strategy, and the business plan was well received by the bank.

Testimonial 7

Thank you BizBolts for the business plan. I received the business plan immediately after payment, it was money well spent ! I was able to easily edit the business plan. After using the BizBolts business plan, I can wholeheartedly recommend their products and skills.

Testimonial 1

Many thanks to the BizBolts team for putting together a fantastic business plan, I could not have done this business plan on my own. I managed to get funding from investors to start my butchery business using your business plan.

Testimonial 2

I am extremely pleased with the business plan and financial statements. The business plan is very detailed & it meets my requirements. I feel better equipped with tools that can help me secure funding.  I would have no hesitation of recommending your business plans to other people.

GET THE HARDWARE STORE BUSINESS PLAN (PDF, WORD AND EXCEL) - R500 Only.

We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 500 Rand.

We have several payment methods which you can use.

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Click  Buy Now  below to purchase. After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Get instant access to the business plan now!

If you want to purchase multiple business plans at once using Visa Card/MasterCard then  click here: Business Plans Store

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

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Call/Whatsapp us on +27606334830 for the other payment methods. (Whatsapp us by clicking the link https://wa.me/27606334830 ). Email: [email protected] .

About The Author

BizBolts (Pty) Ltd is a business research company based in Johannesburg, South Africa. We sell prewritten business plans for various industries including livestock production, crop farming and retail businesses. BizBolts also publishes articles on business ideas, business news, business tips, personal finance, and entrepreneur profiles.

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Manufacturing Business Plan PDF Example

• May 7, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful manufacturing business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your manufacturing business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a manufacturing business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the manufacturing industry, this guide, complete with a business plan example, lays the groundwork for turning your manufacturing business concept into reality. Let’s dive in!

Our manufacturing business plan covers all essential aspects necessary for a comprehensive strategy. It details operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

• Executive Summary : Provides an overview of the manufacturing company’s business concept, market analysis , management, and financial strategy.
• Facilities & Equipment: Describes the facility’s capabilities, machinery, and technological advancements.
• Operations & Supply: Outlines the production processes, supply chain logistics, and inventory management.
• Key Stats: Offers data on industry size , growth trends, and market positioning.
• Key Trends: Highlights significant trends impacting the industry, such as automation and localization.
• Key Competitors : Analyzes primary competitors and differentiates the company from these rivals.
• SWOT: Analyzes strengths, weaknesses, opportunities, and threats.
• Marketing Plan : Outlines tactics for attracting new contracts and maintaining client relationships.
• Timeline : Sets out key milestones from inception through the first year of operations.
• Management: Information on the management team and their roles within the company.
• Financial Plan: Projects the company’s financial performance over the next five years, detailing revenue, profits, and anticipated expenses.

Manufacturing Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your manufacturing business plan, offering a concise overview of your manufacturing facility and its products. It should detail your market positioning, the range of products manufactured, the production process, its location, size, and an outline of day-to-day operations.

This section should also explore how your manufacturing business will integrate into the local and broader markets, including the number of direct competitors within the area, identifying who they are, along with your business’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the business’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your business’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

Facilities & equipment.

Describe your manufacturing facility. Highlight its design, capacity, and technology. Mention the location, emphasizing accessibility to transport routes. Discuss advantages for efficiency and cost management. Detail essential equipment and its capabilities.

Operations & Supply Chain

Detail product range. Outline your operations strategy for efficiency and scalability. Discuss supply chain management. Highlight sourcing of materials, inventory control, and logistics. Emphasize strong partnerships with suppliers and distributors.

Make sure to cover here _ Facilities & Equipment _ Operations & Supplies

Market Overview

Industry size & growth.

Start by examining the size of the manufacturing industry relevant to your products and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing demand for sustainable manufacturing processes, automation, and advanced materials. For example, highlight the demand for products that utilize eco-friendly materials or energy-efficient production techniques, alongside the rising popularity of smart manufacturing.

Key Competitors

Then, consider the competitive landscape, which includes a range of manufacturers from large-scale enterprises to niche firms. For example, emphasize what makes your business distinctive, whether it’s through advanced technology, superior product quality, or specialization in certain manufacturing niches. This section will help articulate the demand for your products, the competitive environment, and how your business is positioned to thrive within this dynamic market.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

First, conduct a SWOT analysis for your manufacturing business. Highlight Strengths such as advanced production technology and a skilled workforce. Address Weaknesses, including potential supply chain vulnerabilities or high production costs. Identify Opportunities like emerging markets for your products or potential for innovation in production processes. Consider Threats such as global competition or economic downturns that may impact demand for your products.

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, trade shows, digital marketing, and strategic partnerships. Emphasize the importance of showcasing product quality and technological advantages to differentiate your business in the market.

Finally, create a detailed timeline that outlines critical milestones for your manufacturing business’s launch, marketing initiatives, customer acquisition, and expansion goals. Ensure the business progresses with clear direction and purpose, setting specific dates for achieving key operational and sales targets.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the manufacturing business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the manufacturing business toward its financial and operational goals.

For your manufacturing business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your manufacturing business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your manufacturing business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

Privacy Overview

Ace Hardware acquires local franchise Bishop Ace across central Illinois

Three Sangamon County Ace hardware stores are being bought out by Ace Hardware Retail from the longtime local owners, Lucy Stafford and George Preckwinkle.

On May 9, a division of the Ace Hardware corporation announced the agreement to acquire Bishop Ace Hardware , a local 13-store chain in central Illinois which partnered with Ace in 1960.

Bishop Ace owns and operates the Ace Hardware store in Chatham on North Main Street and two Springfield Ace Hardwares on North Walnut Street and Wabash Avenue. The buyout will be completed on July 28 of this year with the transition. 

It is unclear what the fiscal amount for the chain was paid.

These three locations and several more across Illinois will not shut down but instead be transitioned into new ownership while retaining the Ace branding. 

Current product, store setup and store management will not be changed, meaning there will be no layoffs of employees. 

More local: Flower frenzy: Business is booming for Springfield florist shop despite rising costs

“Bishop Ace Hardware has always placed a priority on making sure that customers throughout Illinois are provided with the products, support, and world-class service that is the cornerstone of the Ace brand,” President and CEO of Ace Retail Holdings Joe Jeffries said in a news release. “Their passion for the hardware business has created a tradition of excellence that is truly inspiring.”

The Illinois hardware chain started in 1961 as Bishop Hardware and Supply was founded by George T. and Rosalee Preckwinkle in Springfield, who’s family still operate the location at 214 N. Walnut St.

In central Illinois, the 13 Bishop Ace Hardware stores shifting management to Ace Hardware from local ownership are:

• Carlinville: 111 East 1st North
• Dwight: 104 Watters Drive
• Havana: 207 W. Main St.
• Hillsboro: 300 Springfield
• Jacksonville: 900 W. Morton St.
• Lincoln: 521 North Kickapoo
• Normal: 204 East College
• Pittsfield: 901 W. Fayette St.
• Pontiac: 203 East Livingston
• Taylorville: 1713 Spresser

“We’re not just selling hardware; we’re helping customers improve their lives with advice and quality products. Our connection with our customers is deeper than just sales,” Stafford said in a news release. “As we hand over the reins, we are confident our shared values will help ensure the continuation of the high level of customer service and community involvement we have always strived for as a family business.”

Ace Hardware is the largest retailer-owned hardware cooperative with locally owned franchises. The corporation owns 178 stores across Illinois and over 5,700 hardware stores in 60 countries. 

Claire Grant writes about business, growth and development and other news topics for the State Journal-Register. She can be reached at [email protected]; and on X (Formerly known as Twitter): @Claire_Granted

• Small Business

A beloved family-owned hardware store is closing on the Main Line

At the Hardware Center, a Paoli institution for nearly 73 years, longtime costumers say goodbye to a place they say has felt like home.

Betsy Funkhouser Ryan spotted Steve Scartozzi from across the room. In her hometown hardware store, surrounded by half-full shelves, she waited for Scartozzi to finish chatting with another customer, then asked if they could take a quick selfie, one she would text to her five siblings, all big fans.

Steve Scartozzi isn’t a rock star, politician, or public figure in the traditional sense.

But inside a tri-level hardware store in the middle of a Paoli shopping center, Steve, 73, and his younger brother and co-owner, Greg, 68, have become community fixtures, touching the lives — and helping fix the household problems — of countless families and business owners in Chester County and beyond.

“We grew up coming here,” said Ryan, 69, reminiscing about childhood bike rides to the store to browse its extensive selection of Madame Alexander dolls.

Along with the selfie, she texted her siblings the sad news: After almost 73 years in business, the Hardware Center in Paoli will soon close its doors for good.

“It’s bittersweet,” said Greg Scartozzi, who met his wife, Sue, working in the toy section more than 50 years ago. “So many people come up and ask: ‘Where are you going to go?’”

The answer: into a well-deserved retirement.

The store’s last day, June 3, will be an emotional one for the Scarzottis, whose parents, Cordine “Cordi” and Marie, started the business in a nearby Lancaster Avenue storefront after Cordi returned from World War II. By retiring now, the brothers are fulfilling promises they made to themselves not to spend their entire lives working, as their late father did .

Meanwhile, loyal customers are experiencing a rare and unexpected kind of retail mourning.

One woman had tears running down her cheeks as she talked to the brothers about her memories of the store, they said. When they posted a letter on Facebook in April announcing the closure, the grief was palpable in the comments.

“Saddens me like the loss of a family member,” wrote a former employee.

“I never thought I’d feel truly heartbroken over the loss of a store,” wrote a customer. “Paoli will feel a little less like home.”

Regulars say they doubt they’ll be able to find another place that can fill the void of this one-of-a-kind neighborhood institution.

It is part hardware store, part garden center, part toy store, with a floor dedicated to each. In the summer, they sold vegetables out front (tomatoes from Lancaster County were especially popular). By Halloween, the garden-center basement transformed into an elaborate Christmas shop and winter wonderland display, where kids could sit on Santa’s lap and their parents could find just about any holiday decoration imaginable.

» READ MORE: In an Amazon world, toys and trees still fly out of this family-owned Main Line store. Let us rejoice. | Maria Panaritis

In its upstairs toy section, Big Smile Toys, longtime customers have fond memories of buying presents for their children and their grandchildren, drawn to its large selection, old-fashioned feel, and free gift wrapping.

In that department, “we didn’t want the TV item,” Steve Scartozzi said. Instead, they would go to toy shows in New York, constantly in search of unique toys, games, and educational products.

Ryan, who has been visiting the store since she was a child, came to appreciate the store even more as she got older. It felt like home, she said.

“You get to know the people. The customer service is something you don’t find” at other stores, she said in the parking lot, looking up at the storefront draped with a yellow banner reading “Retirement Sale.” At the Hardware Center, “they know you by name.”

The personal touch of a mom-and-pop hardware store

As other independent hardware stores across the Philadelphia region closed in the past decade, the Hardware Center in Paoli chugged along.

It was propelled by the Scartozzis’ sheer force of will, strong customer allegiance, a wide and ever-changing selection of products, and a bit of good fortune. They never had to worry about rent, for example, because their parents bought their current building when the shopping center opened more than 60 years ago.

The brothers have mulled retirement for a while but kept delaying the decision. For the past three years, they’ve tried in vain to find a buyer who would want to continue the store’s legacy as a hardware store. As of last week, it had yet to be sold.

They certainly aren’t closing because business is slow, Steve Scartozzi said. In fact, he added, the rise of big-box stores and online shopping haven’t seemed to cost them many customers.

“The Home Depots and the Lowe’s never bothered us,” he said, noting that people come into the Paoli Hardware Center for a different experience.

Often, he said, “a person comes into the store with a problem,” and employees immediately work with them to solve it. If more help is needed, he added, an owner is usually on-site to offer advice or help find a specific tool or piece of hardware.

“At a big chain store, I hate it because it’s so overwhelmingly big,” said Guy Vanderlaag, 55, of Malvern, who started shopping at the center a decade ago because his then-boss had a house charge — which allowed employees to pick up items that the boss would pay for later. “As soon as you walk in here, plenty of guys greet you: ‘What do you need?’ They are right there to help you.”

He has kept coming in for personal household needs and for his work as a property manager.

“I just love it,” he added after checking out. “I’m really going to miss it.”

Square Enix to 'aggressively pursue' a new multiplatform business strategy 'designed to win over PC users'

New plan will also include a shift from "quantity to quality".

Final Fantasy developer Square Enix has announced a new business plan in which it states its intent to "aggressively pursue a multiplatform strategy that includes Nintendo platforms, PlayStation , Xbox , and PCs", possibly heralding an end to the publisher's historic prioritization of Sony platforms.

Titled "Square Enix Reboots and Awakens", the plan opens with a frank assessment of the company's previous medium-term business strategy, with which the publisher "did not reach final-year net sales/operating income targets". This plan, which focussed on expanding the company's MMO business and streamlining its portfolios by "divesting some overseas studios and IPs" (read, selling off its entire Western arm including Eidos Montreal and Crystal Dynamics ), struggled due to "cannibalization of our new titles due to launch schedule overlap" and the failure of some games to "live up to profit expectations".

With its new plan, Square Enix says it wants to "build an environment where more customers can enjoy our titles", which essentially means it wants to release its games across more platforms quicker. In particular, Square Enix intends to "pursue initiatives designed to win over PC users, which represent a growth market." One wonders whether Square Enix has been watching Sony's own push toward PC with interest, particularly the concurrent launch of Helldivers 2 on the service, which saw Sony reap huge reward despite doing its utmost to spurn the Helldivers 2 community on PC.

Another intriguing point is the type of game Square Enix wants to make. The plan emphasizes a general "shift from quantity to quality", but within that is a commitment to "be bold in attempting to create new IPs, prioritizing novel forms of excitement." As an aside, I do love it when business folk attempt to describe human feelings like enjoyment. Another pearl of corpspeak in the presentation is the phrase "delivering contents filled with ensured fun".

Nonetheless, this intention of focussing on new projects is fascinating to hear from a big publisher, given how overwhelmingly most companies of this ilk currently prioritize sequels and licenses. It makes one wonder how much confidence Square Enix has in its big franchises like Final Fantasy, especially given the rumours that the current PS5 exclusive Final Fantasy VII: Rebirth did not sell as well as the publisher hoped.

You can read the full plan here , if you're so inclined. In this context, it'll be interesting to see how Final Fantasy 16 performs when it launches on PC, which is due to happen fairly imminently. Last we heard, Square Enix was working on a demo of the PC version so its devs could better gauge the recommended system requirements of the port, which director Yoshi-P suggested would be pretty hefty.

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