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How to Write a Hardware Store Business Plan [Sample Template]

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 .

Why Start a Hardware Store Business?

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 Amin 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

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Hardware Shop Business Plan

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.

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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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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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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.

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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.

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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 Business Plan Template & Guidebook

Being successful in the hardware industry requires careful planning and a well-crafted business plan that lays out the details of your goals and strategies. Writing a business plan can be a daunting task, but with the #1 Hardware Business Plan Template & Guidebook, you can create a comprehensive plan tailored to your specific needs quickly and easily. Learn how to use this powerful tool to ensure the success of your own hardware business.

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• How to Start a Profitable Hardware Business [11 Steps]
• 10+ Best & Profitable Hardware Business Ideas [2023]

How to Write a Hardware Business Plan in 7 Steps:

1. describe the purpose of your hardware business..

The first step to writing your business plan is to describe the purpose of your hardware business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a hardware business:

Our mission is to provide the highest quality hardware products and services to our customers; to foster a safe, welcoming, and inclusive environment where our team can thrive; and to be a leader in thought, innovation, and environmental stewardship in the hardware industry.

2. Products & Services Offered by Your Hardware Business.

The next step is to outline your products and services for your hardware business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your hardware business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your hardware business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your hardware business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a hardware business?

• Accounting software
• Permits to operate a business in the local jurisdiction
• Hardware inventory
• Point of sale system
• Cash register
• Tax permits or certificates
• Shop tools and supplies
• Work tables or benches
• Safety equipment and supplies

5. Management & Organization of Your Hardware Business.

The second part of your hardware business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your hardware business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Hardware Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a hardware business varies based on many different variables, but below are a few different types of startup costs for a hardware business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your hardware business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your hardware business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your hardware business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Hardware Business Plans:

Why do you need a business plan for a hardware business.

A business plan for a hardware business is important to outline the goals and objectives of the business, such as determining the target market, defining product offerings, creating operational plans and setting financial goals. It also provides a roadmap for the future of the business, helping to ensure that decisions are made in line with those plans. Creating a business plan allows potential investors or lenders to assess the viability of the hardware business before committing funds.

Who should you ask for help with your hardware business plan?

You should ask a business consultant, entrepreneur mentor, or relevant industry experts for help with your hardware business plan.

Can you write a hardware business plan yourself?

Writing a business plan for a hardware business is a complex task that requires research, market analysis, and financial planning. Depending on your skill set and knowledge of the industry, you may be able to write your own business plan for a hardware business. If you decide to take on the project yourself, it is important to do thorough research and market analysis to understand the industry, be aware of any potential competition, and understand the key success factors for success in the hardware sector. Additionally, you should also familiarize yourself with writing a basic business plan, as well as use reliable financial projections to create realistic projections for your venture. Ultimately, it is recommended that you at least consult with an experienced business consultant or accountant before finalizing any decisions related to your business plan so that you can rest assured knowing that your plan adheres to best practices.

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Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

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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 March 13, 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

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

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”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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. 

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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

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• 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. 

For your hardware store, the marketing strategy should focus on showcasing the variety and quality of your products, your expertise in home improvement and DIY projects, and your commitment to customer service. Emphasize any unique offerings like specialized tools, local products, or services such as tool rental or repair. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

• Professional Branding : Your branding should convey reliability, quality, and expertise. This includes your store’s signage, logo, staff uniforms, and overall store layout and design.
• Direct Outreach : Network with local contractors, tradespeople, and DIY enthusiasts. Offer workshops or training sessions at your store to draw in these customers.

Digital Presence and Online Marketing

• Professional Website and SEO : Develop a website that lists your products, services, and store information. Use SEO best practices to rank for local searches related to hardware stores, home improvement, and DIY projects.
• Social Media Engagement : Utilize platforms like Facebook, Instagram, and YouTube to showcase your products, share DIY tips, and highlight customer projects.

Content Marketing and Engagement

• DIY Blog or Video Series : Share informative content about home improvement projects, tool usage tips, and DIY ideas. Video content can be particularly engaging and useful for demonstrating how to use certain tools or complete specific projects.
• Email Newsletters : Regular newsletters can inform your customers about new products, upcoming workshops, and special promotions.
• Expert Advice and FAQs : Offer expert advice sections or FAQs on your website to help customers with their DIY queries and position your store as a knowledgeable resource.

Experiential and In-Person Engagements

• In-Store Workshops and Demonstrations : Host regular workshops or live demonstrations on various home improvement topics to attract customers to your store and engage with them directly.
• Community Events : Participate in or sponsor local community events to increase brand visibility and connect with potential customers.

Collaborations and Community

• Partnerships with Local Businesses : Collaborate with local contractors and home service businesses for mutual referrals. Partnering with local craftspeople or manufacturers can also diversify your product offerings.
• Local School and Community Projects : Engage in local school projects or community building projects, providing materials or expertise.

Customer Relationship and Loyalty Programs

• Loyalty Rewards Program : Implement a program offering discounts, points, or special perks to regular customers.
• Contractor and Tradesperson Discounts : Offer special discounts or accounts for professional contractors and tradespeople to encourage repeat business.

Promotions and Advertising

• Targeted Local Advertising : Use local newspapers, radio, community boards, and online platforms to advertise your store and any special promotions or events.
• Seasonal Promotions and Sales : Take advantage of seasonal cycles in home improvement and gardening to offer relevant promotions and sales.

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. You could also consider partnering with local businesses or community organizations, hosting events or workshops, or using targeted advertising to attract new customers and encourage loyalty.

Effective marketing and advertising strategies for promoting your hardware store could include creating a strong online presence through social media and a user-friendly website, offering promotions or discounts to attract new customers and encourage loyalty, hosting events such as DIY workshops or tool demonstrations, using visual merchandising and signage to create an inviting and attractive shopping environment, and offering exceptional customer service to encourage positive word-of-mouth referrals. 

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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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Sample Hardware Store Business Plan

Do you wish to develop a hardware store business plan?

The success of such a great business idea largely rests on a strategy or plan .

The absence of such a plan is bound to affect the business development. As a crucial tool to business success, we’ve provided a template to follow in writing your hardware store business plan.

HARDWARE STORE BUSINESS PLAN SAMPLE

By following the key sections included you’re able to put in place a streamlined plan of action. Of course, your hardware store business plan needs to be implemented in the letter.

Here, we’ll be discussing all of that and more. We welcome you to read on to find such details.

A Good Hardware Store Business Plan Must have these Sections

Before we go any further, it’s pertinent to provide a framework around which the plan will be written. Here, we’re talking about must-have sections that are key to a good plan.

These include the executive summary, company description, and the products & services sections.

Others are the market analysis, strategy & implementation, organization & management team as well as the financial plan & projection sections.

i. Executive Summary

As a brief introduction and summary of your hardware store business plan, this section should be concise enough to grab the attention of your reader.

Here, you want to give them a reason why they should read through your entire plan.

The executive summary clearly defines whether the business idea is viable or not.

More importantly, it provides an implementable plan of action that is systematically followed. To make it quick and easy to read, your executive summary should have an average of one to four pages.

You want your executive summary to make up about 10% of your entire business plan. Within this section are key subsections such as the business name & location as well as the products & services sections.

Others include the mission & vision statements, and the purpose of the plan.

Business Name & Location

What’s the identity of your hardware store business? Of key importance is the name it will go by. Another detail that needs to be included in its location.

With this information, the reader understands your business from very scratch.

Products & Services

Although there’s a product and services section in the wider plan, this must also be included in your executive summary. Now, only the basics need to be captured here.

For a fuller detail of all products and services offered by your hardware store, the reader will need to read the plan.

You’re expected to have worked out all your hardware store products and/or related services well in advance. This may require research on your part. Ensure the basics are captured under this section.

Mission & Vision

This section explains crucial areas of your plan. The mission and vision statements set the performance standards for your hardware store business plan. What more?

They help provide employees with set goals to attain, thus promoting efficiency.

Your mission statement should be action-oriented in nature.

Here, an explanation of your business’s purpose and what benefits it has for clients is provided. It should also include your business’s goals and its core functions.

Your vision statement should give a vivid mental image of your hardware store business. Here, the image of what you intend to be at some point in the future is provided. This is largely based on your goals and aspirations.

Purpose of the Plan

What’s the purpose of your plan? Every business plan has a purpose and yours shouldn’t be any different.

Whatever it is, it must include set strategies and attract investors.

ii. Company Description

The company description section of your hardware store business plan focuses on key areas such as the legal structure, the business’ history, as well as the needs you intend to meet. What more?

Consider including an overview of products and services and also a company growth summary.

Another detail that must be added is your short and long-term business goals. More importantly, you’ll need to show investors your plans for making a profit.

iii. Products & Services

This was earlier discussed as a subsection under the executive summary.

Here, you’ll need to add all the important details like the description of such services and products. Information on the market role of your products as well as its advantages must be stated.

What’s the life cycle of your hardware products? All relevant information on patents, copyright, or trade secrets should be added. Are new products in the works?

Include information on any or other ongoing developmental activities.

iv. Market Analysis

In this section of your plan, you’ll need to show significant industry knowledge.

This level of understanding largely depends on thorough market research. Here, you’ll be providing a representation or sketch of targeted market segments.

A description of the hardware store industry will also be in order. Its outlook, as well as supporting statistics, are also necessary to gain a fuller and more robust understanding of what your business is about.

Also include information on historical, current, and projected marketing data for services and products.

An assessment of your competitors is also in order. Here, you’re looking at their strengths as well as weaknesses.

v. Strategy & Implementation

With the help of an operating plan, you’re able to implement your sales and marketing strategy.

Under this section, you’re looking at costing details, pricing, promotion as well as distribution or logistics. Your strategy and implementation section must also provide promotion details and how your products will enter the market.

How will your hardware store business function? Include details on labor sources as well as the number of employees.

vi. Organization & Management Team

This is the bedrock upon which every business is structured.

Your hardware store business will need an efficient management team in place. Provide details on this by including an organizational chart with key employees highlighted.

There should be additional information on owners, their names, percentage ownership, as well the extent of their involvement. Include a profile of your management team with names, positions, responsibilities, and experience provided.

vii. Financial Plan & Projections

The financial plan and projections section is a crucial component of your hardware store business plan. Here, the help of a financial expert such as a professional accountant is needed.

Details to include are the historical financial data with balance sheets, income statements, and cash flow statements spanning the past three to five years.

There should be realistic prospective financial data. This includes balance sheets, forecasted income statements, cash flow statements, and capital expenditure.

With all of these key sections and details included in your hardware store business plan, your chances for success are greatly improved.

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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.

All of these keys will be combined to drive sales and ultimately the bottom line…net profit.

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

Building Blocks has educational programs which they call Building Blocks University .  Programs have been growing year after year and last year they offered certificate programs for new members.  There are four required courses and four Building Blocks University workshops and seminars.  There is also required course work for any member that is opening a The Tool Room Rentals as part of their program. 

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. 

In order to make Troy Enterprises, Inc.  financially viable, there are three major factors necessary to get the business up and running.  First, a feasible concept.  We have found that with Building Blocks in the downtown Wilusa market.  Second, the business needs someone to manage it.  It needed a professional with a good deal of experience to operate and manage the business.  This manager needs a sound financial background as well as an entrepreneurial spirit.  Third, the business needs financial support.  This support will come from three different sources.  Hector Priamson will invest time and some capital to start the business.  There is a need for investors to help with the initial capital to allow the business to have enough equity to get off the ground.  The final piece of financial support is the faith and commitment of a financial institution to loan the remaining funds that are needed to operate the business.

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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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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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

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.

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Hardware Retail Franchise Business Plan Sample

AUG.09, 2022

Hardware retail franchise business plan for starting your own business

Whether it be a technological thing such as a computer or a purely natural setting such as a garden, hardware installation is a must. In addition to the usage of big hardware tools, smaller ones like miniature screwdrivers are also increasing in demand. And the demand for sophisticated hardware and tools is expected to increase even more.

So, if you are wondering whether or not you should open a hardware store with franchise, you should keep all the worries aside and read this blog. In this business plan we will be listing all the details of Sam Hardware World, a hardware retail franchise in New York City. It will help you in knowing how to set up a hardware business in the United States. 

Moreover, the financial part would give you an insight into the profits you can earn via it. You could also discover whether or not you need to also consult business plan for loan to launch the startup.

Executive Summary

2.1 the business.

Sam Hardware World will be based in New York City. The business will operate in both B2B and B2C modes. The startup aims at providing hardware for setting ranging from technological to household to business offices.

2.2 Management of hardware retail franchise business

To manage hardware retail the first step is to create a business plan for a hardware store . In that business plan you must enlist all the equipment to be procured and personnel you must staff to manage the operations. Since the business activity overlaps with other businesses as well, you will need to consult retail discount store business plan and toy business plan as well besides the hardware retail franchise business plan.

In this sample business plan for a hardware franchise, we’ll explain how Sam conducted and managed his business. Since he underwent the procedure to get a franchise, you can also see this if you need to study a business plan for a franchise .

2.3 Customers of hardware retail franchise business

Knowing the customers before starting a business will help you in understanding their demands, likes, and purchasing power. The customers of the hardware retail franchise business are:

• Construction Enterprises
• Educational Institutes

2.4 Business Target

Sam Hardware World aims at boosting sales at a specified rate after regular intervals that will be mentioned later in this sample. The financial targets for the first three years are given in this graph:

Company Summary

3.1 company owner.

Sam has acquired a degree in management sciences. After working as a business consultant in a tech firm for two years, he decided to capitalize on hardware store franchise opportunities.

3.2 Why the hardware retail franchise business is being started

Sam started the hardware shop business to benefit from the perks of doing one’s own business. He had unique hardware business ideas thus he decided to step only into this type of enterprise.

3.3 How the hardware retail franchise business will be started

Step1: Conduct Research

The first step is to research the types of hardware businesses with a special focus on franchise hardware stores. You must search for hardware store franchises for sale and select the best among them.

Step2: Make Hardware Business Plan

Next, you will have to devise a hardware shop business plan to ensure you systematically carry out the operations of your business. In your business plan for hardware shop, you should enumerate in detail the executive plan, marketing plan, sales strategy, and financial plan.

Step3: Set up the Hardware Store

In the next stage, you must acquire the place where you would be installing your setup. While procuring the equipment, it is equally important to start recruiting talent.

Step4: Market & Establish a Web Presence

To reach your target customers, you will need to exploit the media platforms and websites to get renowned.

Step5: Manage Finance

Last, you will have to create balance sheets for cost analysis and determining prospective profits.

Services of hardware retail franchise business

If you are thinking of starting a hardware business you must want to know are hardware stores profitable? Well, running a store can be extremely profitable provided you have some unique ideas. To get them, you should search for how to start a hardware business or how to start a store, mark your location, and analyze what others in the domain are doing. Your prospects will depend on your research on potential localities and selecting the right one for launching your franchise hardware store.

• Technical Hardware Products

Our major products will be hardware related to technology use such as computers and components, input and output devices, mobile parts and accessories, etc.

• Construction Hardware

The second category of our products will include hardware that is needed during construction projects.

• Garden Décor & Hardware 

We’ll also provide hardware that is generally needed by households and institutions to set up the deck, or do landscaping. 

• General Tools

We’ll also provide hardware tools that are required for minor and major repairs.

Marketing Analysis of hardware retail franchise business

Before you open a hardware store you must undergo a thorough analysis of all the available markets and explore hardware store franchise opportunities related to each market. It is to first, determine your customer groups, and second, identify the market trends and the price you can set provided your financial targets. The rates of your competitors in retail store hardware businesses and purchasing power of your target customers should also be catered to in the analysis.

excellent work

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Considering the importance of accurate marketing analysis in the business plan, you should hire a marketing expert. However, for a rough idea, you can search on your own on how to start a hardware company and the best locations to open a hardware franchise. 

In this hardware shop business plan pdf we are providing the details of Sam Hardware World. 

5.1 Market Trends

According to IBISWorld, nearly 15k hardware stores are running successfully in the United States. If you go through the hardware store financial district and some hardware retailing magazines you can see that the market size has reached $36 billion in the US alone. Therefore, the market trends are going right and you should not worry about the prospects if you completely understand how to start a hardware store and conduct it. Source – https://www.ibisworld.com/united-states/market-research-reports/hardware-stores-industry/#IndustryStatisticsAndTrends

5.2 Marketing Segmentation

In this section, you should divide the whole population into distinct groups of your target customers. Since the customer groups of hardware stores overlap with other businesses, you can take help from business plan for video game store as well as business plan for farmers market .

5.2.1 Construction Enterprises

Our biggest group of customers will belong to the construction enterprise. They are expected to procure our hardware specified for their work as well as the general tools that are needed for generic tasks.

5.2.2 Offices

The second category of our target customers will be the offices. They will avail of our services and products mainly for setting up the office spaces. The products they would need would range from printers and computers to electronics.

5.2.3 Households

The third category of our target customers comprises households who will need all of our products but in a minor number. Their purchases can be related to technological items as well as garden & yard tools.

5.2.4 Educational Institutes

Educational institutes will also be a group of our target customers as they will be needing the same products that are demanded by offices and households.

5.3 Business Target

The business targets of Sam Hardware World are:

• Attaining a CSAT score of more than 90% within a year of our launch
• Expand the product line by the end of the first year

5.4 Product Pricing

For the first year, we aim at keeping our prices lower than that of our competitors. Afterward, we’ll bring them in the same range as theirs.

Marketing Strategy of hardware retail franchise business

If you are looking for a marketing plan, you have landed on the right page. In this business plan sample, we’re providing a detailed business plan for Sam Hardware World.

6.1 Competitive Analysis

• Our location is ideal for a hardware store. It is because we have several colleges, offices, and small businesses in our vicinity. In addition, the residential community is also not far away.
• We will be offering discounts to construction managers so that they procure the hardware from us and come into a long-term partnership.
• Our strategy to keep prices low during the first year will benefit us in reaching out to the target customers.

6.2 Sales Strategy

In this sample business plan for a hardware franchise, we are giving the sales strategy of Sam Hardware World. However, for more ideas you may also want to visit business plan for a stationery and vape shop business plan .

• We will offer small hardware products as gifts with large purchases.
• We will run social media campaigns to get known to a wider audience.
• We will offer a 20% discount to customers who enter into a long-term partnership with us.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan of hardware retail franchise business

If you’re looking for how to start a hardware business , you must know that hiring the right people for the right job is of utmost importance. Owing to its significance, you must include the list of required people along with their job descriptions in a business plan in any format. This will enable you to select the most talented individuals for opening a hardware store with a franchise. 

7.1 Company Staff

Sam will be the CEO. He will need the following people for available positions:

• 2 Sales Managers to manage hardware sales in different domains
• 1 Accountant to maintain financial record
• 1 Social Media Manager to manage online platforms
• 1 Store Operator to manage the inventory
• 1 Customer Care Executive to maintain contracts with long-term customers
• 1 Cleaner to maintain the facility
• 3 Drivers to procure and transport inventory to and from sites

7.2 Average Salary of Employees

Financial plan of hardware retail franchise business.

You may be starting a business out of passion, but you would want to know how much profit can anyone make after they open hardware stores. Practically, hardware stores earn a lot. If the business operations and financial flows are managed then the business can yield immense profit.

To ensure that the finances go as projected, you must make a comprehensive financial plan for your business. That should include the break-even analysis, projected profits on a monthly and yearly basis for at least the first three years, gross margin calculations, balance sheet, and business ratios.

In this retail business plan we are providing the financial plan of Sam Hardware World.

8.1 Important Assumptions

8.2 break-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 business ratios.

How profitable is a hardware store?

As you can see from the financial part of this hardware retail franchise business plan in pdf, the hardware store can be immensely profitable if you provide unique services. If you have competitive advantages, that would be a plus.

How do I start my own hardware business?

If you are looking for how to set up a hardware store you must study at least one sample hardware retail franchise business plan. The first step is doing research and the second is documenting a detailed business plan. 

Is a hardware store a good investment?

Owning a hardware store is the best investment you can make. It is because setting up and running a hardware store is not much difficult. You can make profits right after starting a hardware store.

Download Hardware Retail Franchise Business Plan Sample in pdf

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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!

• 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.

User Contributions:

Comment about this article, ask questions, or add new information about this topic:.

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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!
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• 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.

Hardware Store Business Plan

This is a free, printable business plan outlining the necessary services, organization and market strategies for hardware store owners and those working in the retail sector.

Sample text from Hardware Store Business Plan:

1.0 Executive Summary

[COMPANY NAME] will be a sole proprietorship owned by [NAME]. The Company is a start-up as [NAME] will purchase the rights to the existing location for $75,000. Upon purchase of the rights, the Company will demolish the existing structure and build a new State of the Art hardware store.

[COMPANY NAME] will be a standard general hardware store that offers the parts, material, and advice to tackle any home repair, as well as lawn care. The primary focus will be to satisfy the seasonal needs of the area's customers.

The Company will service the hardware and repair needs of the [COUNTY], [COUNTY], [COUNTY] and [COUNTY] County households. The Company would like to increase sales in all market segments above with a concentration of growth in sales to homeowners who do their own repairs.

The focus of this business plan is to put forth objectives to launch operations, work efficiently and effectively, and expand internal operations giving the Company the opportunity to grow with sales growth in the surrounding County areas. [COMPANY NAME] is ready to elevate to the next step. The Company is seeking grant funding in the amount of $600,000. The grant funding will be used to launch operations including purchasing the existing land & business, construction of a new Building and purchasing equipment and displays for the store. Additionally, the Company will purchase the opening inventory, develop a website and launch an advertising campaign.

1.1 Objectives

[COMPANY NAME] has the following objectives.

1. Obtain Grant funding to purchase an existing hardware store and rebuild the retail space.

2. Customer Service - Give our customers the highest quality product and service at a fair competitive price.

3. To create a safe environment for people in the community to come for their hardware store needs.

4. To provide jobs within the community.

5. To successfully manage a hardware store.

1.2 Mission

The mission of [COMPANY NAME] is to offer quality hardware products in a customer-friendly shopping environment. Our customers will get assistance quickly and will leave the store prepared to get the job done right the first time. [COMPANY NAME] will also focus on anticipating the seasonal needs of its customers and providing the best products at competitive prices.

1.3 Keys to Success

The keys to success for [COMPANY NAME] are:

1. Location: [COMPANY NAME] will be assuming ownership of an existing hardware store. The Company plans to demolish the existing building and build a new State of the Art hardware store. We will have an existing base of customers.

2. Seasonal Products: Each season has it own unique demand on a homeowner. [COMPANY NAME] will focus on this pattern and bring in local customers by marketing these items at competitive prices.

3. Repair/Project Resource Area: The first section customers will find when they enter is a repair/project resource area that they can use to plan repairs or projects. There will be a repair/project resource person to answer questions and direct them to the section of store where the needed products are.

4. In-Store Expertise: Store employees will be knowledgeable in home repairs/projects. In addition, the repair/project resource area will be used to conduct short trainings and demonstrations in home repair and home projects.

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

By alex ryzhkov, resources on computer & hardware store.

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

Are you considering starting a Computer IT Hardware store? You've come to the right place. Technology is constantly evolving and advancing, making the IT industry a lucrative one. According to Statista , the global IT market size was valued at $1.2 trillion in 2019 and is expected to grow to $1.9 trillion by 2025. There is no better time than now to create a successful IT hardware store.

To ensure your success, a well-written business plan is essential. In this post, we outline nine crucial steps to help you create a comprehensive and effective business plan for your Computer IT Hardware store. From conducting market research to creating a team and management structure, we cover everything you need to consider before opening your doors.

Let's dive in and get your business started on the right foot.

Conduct Market Research

Market research is an important step before starting any business, and it becomes even more crucial when you're opening an IT hardware store. It is essential to understand your market, analyze competition, and identify your target audience before making any significant investment.

Begin by researching the IT hardware industry trends, including the latest products, devices, and services. Look for articles, reports, and publications that specialize in the IT hardware industry and understand the different components involved. This research will help you to identify the most popular computer brands, the latest technologies, and the customer requirements for the hardware they need.

• Use online forums to get opinions from existing customers in the IT hardware industry.
• Look for industry reports from your national and local government to identify potential business opportunities.
• Attend industry trade shows, workshops, and conferences to meet industry experts and find new suppliers.

Demographics research is also important to identify the audience for your IT hardware store. You need to understand the target market, including their ages, incomes, genders, and education levels. By doing this, you can tailor the services and products to meet their specific needs and preferences. Identify market gaps that can help you position yourself ahead of your competition.

Analyzing competition is another crucial aspect of market research, which involves understanding the strengths and weaknesses of your competitors. Identifying gaps in their services and products can help you to set competitive prices, target unique customer needs and create innovative offers.

• Visit the websites of your competitors and analyze their products, services, prices, and other value propositions.
• Visit the competitors' physical store locations, observe how they are managing the store, and converse with their staff to identify any critical gaps.

Overall, conducting market research is critical for identifying market opportunities, understanding your business's potential, and setting realistic benchmarks for your IT hardware store in the industry.

Identify Target Customers

When it comes to starting a successful computer IT hardware store, identifying your target customers is essential. Without a clear understanding of who your ideal customer is, your marketing efforts and product offerings could fall flat. Here are some tips for identifying your target customers:

• Start by analyzing the demographics of your area. Look at factors like age, income, and occupation to get an idea of who your potential customers are.
• Consider the types of products and services you will be offering. Are you targeting individual consumers or businesses? Will you focus on a specific industry or niche, such as gamers or graphic designers?
• Think about the pain points your target customers may experience. What problems can you solve for them with your products and services?
• Research competitors in your area and see who their customers are. Are there any gaps in the market that you can fill by targeting a different segment of customers?

Once you have a clear understanding of who your target customers are, create customer personas to represent different segments of your audience. These personas should include information like age, gender, occupation, interests, pain points, and buying habits.

By identifying your target customers and creating personas, you can tailor your marketing efforts and product offerings to meet their specific needs and preferences. This will help you build a loyal customer base and differentiate yourself from competitors in the market.

Analyze Competition

It is essential to know about your competitors in the market so you can understand their strengths, weaknesses, and pricing strategies. By analyzing your competitors, you can get an idea of what your target customers want and how you can offer them better products and services. Here are some crucial steps to analyze your competition:

• Identify Competitors: You need to know who your competition is and where they are located. Identify companies that sell similar IT hardware and services in your area and compare their offerings.
• Compare Pricing: Check the prices of your competitors and see how they compare to yours. Make sure that you are not overcharging or undercharging for your products and services. You need to find a balance between affordability and profitability.
• Assess Quality: Analyze the quality of products and services offered by your competitors. Identify areas where they excel and where they fall short. Use this information to improve the quality of your offerings.
• Examine Marketing Strategies: Check out the marketing strategies used by your competitors in promoting their products and services. Evaluate the channels they use to reach their customers and the messages they convey. Use this information to enhance your marketing strategy.
• Consider Online Presence: Analyze the online presence of your competitors. Check their website, social media accounts, and online reviews. Consider creating an online presence for your business as well to expand your customer base.
• Use Google search to find your competitors.
• Visit your competitor's physical stores to see the products and services they offer.
• Ask customers who have used your competitor's products or services about their experience.
• Join local business groups or associations to learn more about the market and your competition.

By analyzing your competition, you can make informed decisions about your business strategy and offerings. It can help you identify gaps in the market and gain a competitive advantage.

Determine Startup Costs

Before starting your computer IT hardware store, you need to have a clear idea of the amount of money that will be required to get the business up and running. Determining startup costs is crucial in order to properly allocate financial resources and to have a realistic understanding of the financial requirements of your new venture.

Startup costs refer to the one-time expenses that are essential to start your business. These include expenses such as equipment, rent, inventory, licenses, legal fees, marketing, and other costs:

• Equipment: You will need to purchase computer hardware and other IT equipment.
• Rent: You will need to rent a space where you can operate your computer IT hardware store.
• Inventory: You will need to purchase inventory for your store. This should include a variety of computers, laptops, tablets, and other IT-related hardware.
• Licenses: You will need to obtain the necessary licenses from state and local governments to operate your business.
• Legal fees: You may need to consult with a lawyer to help you with the legal aspects of starting a business, such as drafting of contracts and filing necessary documents.
• Marketing: You will need to create a marketing campaign to attract customers.
• Other costs: Other costs may include insurance, utilities, and office supplies.
• Keep a detailed record of startup costs. As you go through the process of starting your business, keep track of all the expenses you incur. This will help you better understand your finances and make informed decisions regarding your budget.
• Consider finding a business mentor who has experience opening a computer IT hardware store. You can learn a lot from someone who has already gone through the process, including what expenses you may have overlooked.

Determining the startup costs for your computer IT hardware store can be a daunting task, but understanding the financial requirements of your new business venture is essential to its success. By accurately estimating your startup costs, you will be better prepared to make informed financial decisions and ensure that your business is financially sustainable in the long run.

Determine Funding Sources

Starting an IT hardware store business requires a significant amount of initial capital to cover expenses, such as purchasing inventory, equipment, and office rent. Therefore, identifying the right funding source is crucial to ensure that you have enough resources to get your business off the ground. Here are some of the most common funding sources that you can consider:

• Personal Savings: Starting a business with personal savings is the safest and most straightforward way to fund your startup. You can use any savings you have or tap into your retirement accounts to support your business.
• Friends and Family: Reach out to friends and family members who may be interested in investing in your business. Consider offering them equity in your venture in exchange for financial support.
• Small Business Administration (SBA) Loans: The SBA offers different loan programs for small business owners. You can apply for a loan through their network of lenders to help finance start-up costs, equipment purchases, and working capital.
• Crowdfunding: With the advent of online platforms like Kickstarter, Indiegogo, and GoFundMe, you can seek individual contributions from people who are interested in your business idea. Crowdfunding is a popular funding option for entrepreneurs who want to test the market and raise capital at the same time.
• Angel Investors and Venture Capitalists: You can pitch your business idea to angel investors or venture capitalists who are interested in funding innovative startups. These investors typically invest in high-risk, high-growth potential businesses and expect a substantial return on their investment.
• Choose a funding source that aligns with your business goals and long-term plans.
• Prepare a compelling business plan that outlines your business model, target audience, and financial projections to attract investors.
• Research on different funding options to explore all the possible sources of funding and choose the one that suits your business needs best.

Before you select a funding source, it's important to determine your start-up costs to identify the amount of capital you need to get your business off the ground. Keeping track of your expenses, maintaining a healthy cash flow, and minimizing unnecessary costs can help ensure the success of your IT hardware store business.

Identify Location

Choosing the right location for your computer IT hardware store is crucial for the success of your business. You need to consider certain factors, such as accessibility, visibility, competition, and cost, before deciding on the location.

Accessibility: Make sure that your store is easily accessible to your target customers. Consider the proximity to major transportation hubs, such as airports, train stations, and bus depots. Also, evaluate the availability of parking spaces and accessibility for disabled customers.

Visibility: Your store should be visible to a large number of potential customers. Consider selecting a location that has high foot traffic and is located in a busy commercial area that is frequented by your target customers.

• Consider opening your store in a shopping mall or near a major retail store, as they attract a considerable amount of foot traffic.
• Choose a location that is easily recognizable and memorable.

Competition: Evaluate your competition in the area. Make sure that you are not opening your store near similar establishments that offer the same products and services. Consider the competitiveness of the market, and make sure that your store has something unique to offer.

• Research the demographics of the area to ensure that there is a need for your products and services.
• Consider conducting a SWOT analysis to identify the strengths, weaknesses, opportunities, and threats of your business and your competitors.

Cost: Consider the cost of renting or purchasing a store in the area. Make sure that the location is within your budget without compromising the quality of the location.

• Consider leasing a storefront instead of purchasing a property if you have limited capital.
• Make sure that the location is in line with the projected revenue of your business.

Overall, identifying the right location for your computer IT hardware store requires in-depth research, analysis, and planning. Take your time to make an informed decision and select a location that offers the best opportunity for your business to succeed.

Create A Business Structure

When it comes to starting a computer IT hardware store, it is important to have a clear idea of the business structure that will work best for your needs. Whether you are starting your business alone or with a group of co-founders, taking the time to create a solid structure will help ensure that everyone on the team knows their roles and responsibilities.

The most common types of business structures include sole proprietorship, partnership, limited liability company (LLC), and corporation. The choice you make will depend on factors such as the number of co-founders, your personal liability preferences, and tax considerations. Consulting with a legal or financial professional can help you decide which business structure will work best for your specific situation.

• Consider registering your business with the state or obtaining necessary licenses and permits
• Develop a business plan to help guide your decision-making process
• Choose a name that accurately reflects your brand and is legally available for use

Once you have chosen your business structure, it is important to create a partnership agreement or operating agreement that outlines the roles and responsibilities of each team member, as well as important aspects such as ownership percentages and profit distributions. This document can serve as a valuable reference point and conflict resolution tool in the event that disagreements arise in the future.

It is also important to register your business with the appropriate federal and state agencies, obtain necessary tax IDs and permits, and open a business bank account to help keep your personal and business finances separate.

• Take into account any legal or financial implications of each business structure
• Consider consulting with a legal or financial professional for guidance
• Set up clear policies and procedures for business operations, such as inventory management and customer service

Overall, creating a solid business structure is an essential step in setting up your computer IT hardware store for success. Taking the time to outline roles and responsibilities, register your business, and consult with professionals can help you create a strong foundation for growth and sustainability.

Develop A Marketing And Sales Plan

Now that you have a business structure and team in place, it's time to develop your marketing and sales plan to attract customers to your computer IT hardware store . A well-designed plan can help you build your brand, reach your target audience, and drive sales. Here are some key steps to develop a marketing and sales plan.

• Define Your Unique Selling Proposition (USP): Clearly define what sets your computer IT hardware store apart from others in the market. Identify your strengths and unique offerings that will appeal to your target customers.
• Identify Your Target Audience: Identify your ideal customer demographic that will benefit from your computer IT hardware store. Identify their needs and wants and tailor your marketing strategies accordingly.
• Create a Content Strategy: Develop a content strategy that aligns with your USP and target audience. This is an excellent way to build your brand and establish yourself as a thought leader in the industry. The content could be in the form of blog posts, videos, social media posts, and more.
• Use Social Media: Utilize various social media platforms such as Facebook, Twitter, Instagram, and Linkedin to connect with your target audience. Share your content and promote your offers on these platforms to build followers and attract potential customers.
• Partner with Complementary Businesses: Identify businesses that complement your hardware store, such as software companies or other tech-related businesses, and partner with them to offer joint promotions and discounts.
• Use Paid Advertising: Consider using paid advertising to reach a larger audience. You can use Google Ads, Facebook Ads, Instagram Ads, and more to boost your reach and promote your products and services to your target audience.
• Make sure your website is user-friendly and contains all the necessary information about your products and services.
• Offer promotions and discounts to attract new customers and incentivize them to make a purchase.
• Organize events and workshops that showcase your products and services and help educate customers about IT-related topics.

By following these steps, you can develop an effective marketing and sales plan for your computer IT hardware store that will help you attract customers and build a loyal following. Remember to regularly evaluate and adjust your plan based on market changes and customer feedback to ensure your business stays competitive.

Create A Team And Management Structure

Creating a team and management structure is a crucial aspect of starting a business. As the owner of your Computer IT Hardware Store, you should have a team to help manage your daily operations and ensure that all tasks are being completed efficiently and effectively.

Identify the Roles: Begin by identifying the roles that your business requires. Depending on the size and complexity of your operation, you may need to hire individuals for positions such as sales representatives, service technicians, customer service representatives, and marketing specialists. Clearly defining each role will help you determine what skills and experience you require from potential employees.

Recruit and Hire: The next step is to recruit and hire your team members. You can post job listings on recruitment websites, social media platforms, or industry-specific job boards. Be clear about the qualifications required for each position, and conduct thorough interviews to assess the candidate's skills, experience, and fit for the position. It is also essential to provide competitive compensation packages to attract top talent.

Train and Develop: Once you have hired your team, focus on training and developing their skills to ensure that they can deliver excellent customer service and maintain your high standards. Conduct regular training sessions and provide opportunities for continuing education and development to stay up-to-date with the latest industry trends and best practices.

Create a Management Structure: Establish a management structure to ensure that your team is functioning smoothly and effectively. Define the roles and responsibilities of your managers and supervisors, and establish communication channels to ensure that everyone is aligned with the company's goals and objectives.

• Delegate responsibilities and tasks to your team members to avoid micromanaging.
• Set clear performance metrics to evaluate the progress of your team members.
• Implement regular team-building exercises to build strong relationships and foster a positive work environment.

Writing a business plan for a computer IT hardware store requires a thorough analysis of the market, competition, and funding sources. By following the nine steps in this checklist, you can create a successful business that offers quality hardware, technical support, and excellent customer service to your target audience. Investing in a sound marketing and management plan, as well as a talented team, can help in taking your business to new heights.

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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.