Introduction
I can't think of a hook for this post so let's just pretend you just read something enlightening and skip right to the meat of the article.
Scenario
Location: Chinatown, San Francisco
Business: Ladies' clothing
Size: 750 square feet
Traffic: Medium high
Demographics: Low-to-medium income
The Chinatown neighborhood is a high traffic area with a mix of tourists and everyday shoppers.
Costs
Given the above setup, here is our startup costs in order by amount:
Lease
The biggest cost was getting the store location. In an existing popular shopping district, the rules of the game are slightly different. There are no empty storefronts waiting for businesses to fill them. Instead, the only way to get in is to keep a lookout for the few shopkeepers moving on and outbid competitors to get the old lease transfered to you. In effect, the lease has a monetary value beyond what a business in it produces -- and the value may go up or down depending on economic cycles and inflation.
Remodeling
In the costs there is a line item for remodeling "supplies" but zilch for remodeling "labor". Remodeling is one of the few startup costs that can be negotiated away using design, lighting, paint and sweat. We had a handy crew of friends do all the work over a weekend -- total costs were: $100 for lunch, $500 for a celebratory dinner and a mental bill for future repayment of favors. Counting up the people plus the time spent, professional contractors would have been an extra $20,000 out of pocket. (A friend opened up a similar-sized store, paid $40,000 for their remodeling and the contractors took their sweet time in finishing the work.)
Here are our before and after photos:
Before
After
A dramatic transformation on just $1,750. A big eyesore in the before photos is the counter display -- looks more in place with the wood floors and yellow color scheme.
Conclusions
Blah, no conclusions either.
I can't think of a hook for this post so let's just pretend you just read something enlightening and skip right to the meat of the article.
Scenario
Location: Chinatown, San Francisco
Business: Ladies' clothing
Size: 750 square feet
Traffic: Medium high
Demographics: Low-to-medium income
The Chinatown neighborhood is a high traffic area with a mix of tourists and everyday shoppers.
Costs
Given the above setup, here is our startup costs in order by amount:
| $25,000 | lease buyout from previous store owner | |
| $8,500 | security deposit and 1st month rent | |
| $7,500 | inventory | |
| $1,000 | remodeling supplies | |
| $750 | store fixtures | |
| $250 | various licenses | |
| $43,000 | total |
Lease
The biggest cost was getting the store location. In an existing popular shopping district, the rules of the game are slightly different. There are no empty storefronts waiting for businesses to fill them. Instead, the only way to get in is to keep a lookout for the few shopkeepers moving on and outbid competitors to get the old lease transfered to you. In effect, the lease has a monetary value beyond what a business in it produces -- and the value may go up or down depending on economic cycles and inflation.
Remodeling
In the costs there is a line item for remodeling "supplies" but zilch for remodeling "labor". Remodeling is one of the few startup costs that can be negotiated away using design, lighting, paint and sweat. We had a handy crew of friends do all the work over a weekend -- total costs were: $100 for lunch, $500 for a celebratory dinner and a mental bill for future repayment of favors. Counting up the people plus the time spent, professional contractors would have been an extra $20,000 out of pocket. (A friend opened up a similar-sized store, paid $40,000 for their remodeling and the contractors took their sweet time in finishing the work.)
Here are our before and after photos:
Before
 |
 |
After
 |
 |
A dramatic transformation on just $1,750. A big eyesore in the before photos is the counter display -- looks more in place with the wood floors and yellow color scheme.
Conclusions
Blah, no conclusions either.
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