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How Much Does it Cost to Open a Retail Store?

How much does it cost to open a retail store?

Failing to budget is one of the biggest missteps that first-time business owners make when opening a retail store. While the actual cost of opening a retail store depends on a handful of factors, it’s not hard to get a ballpark figure if you know where to look.

POS Nation has helped thousands of first-time business owners launch and manage their retail shops. And with a better understanding of some of the associated costs of opening a retail store, you can scale your business to incredible heights!

How Much Does it Cost to Open a Retail Store?

To identify how much money you really need to start a retail business, we recommend building a bulletproof business plan. Use the business plan as an opportunity to calculate overall startup costs and monthly operating expenses.

To open a retail store, it is recommended that you budget between $50,000 to $100,000. Costs will fluctuate based on your store's size and location.

Be sure to plan for an investment in a modern point of sale (POS) system.

POS Nation offers a retail-specific POS system built with the exact features you need to drive sales and create repeat business. Over the years, we’ve worked with thousands of high-growth retail shops, and the results have been amazing! 

Beyond investing in a POS system, here are a few other expenditures that you’ll need to plan for as you open your new retail store. 

1. Base Rate

Before we begin, it’s important to note that every business is different. As such, the base rate or total startup cost will differ from one business to the next. Most experts recommend having anywhere from six months to a year’s worth of expenses covered.

However, for a better estimate of the total cash balance required to open your own retail store, we recommend consulting the U.S. Small Business Association’s Startup Costs Worksheet. Use this template to calculate your own business expenses.

We recommend allocating, at minimum, $100,000 to get started. 

RELATED READING: What is the Average Cost of a Point of Sale System?

2. Rent and Utilities

The total cost of rent and utilities will differ depending on your unique location. For example, the average cost of rent in New York City is massive compared to the average cost of rent in Amarillo, Texas.

“It’s time to put location at the top of your to-do list,'' recommends Forbes contributor Karen E. Spaeder. “If you’re preparing to open a food or retail business with a storefront, putting your business in the proper location might be the single most important thing you do at startup. Of course, you need a winning product, too, but how will anyone know about that product unless you get them through the door.”

We recommend allocating anywhere between $500 to $4,000 for monthly rent/utilities.

RELATED READING: 9 Apps All Small Business Retailers Should be Using

Retail POS System Buyers Guide

3. Permits, Licenses, and Insurance

Again, the required permits, licenses, and insurance for your business will vary depending on your unique business location. Additionally, licensing will vary dramatically based on your unique business type.

For example, all liquor store business owners are required to obtain a liquor license. To make matters more complex, the total quantity of liquor licenses available is super limited. In some instances, you may have to wait months (or years) for a liquor license.

RELATED READING: How to Apply for a Liquor License in 5 Easy Steps

4. Inventory

Finally, be sure to allocate an appropriate budget for inventory.

“From an accounting perspective, this cost can help you determine how much profit this inventory can bring you, along with how much of your business’ capital will be tied up in the inventory and for how long,” says Intuit contributor Crystal Gilliam.

Intuit offers a convenient and easy-to-use inventory cost calculator. Use this calculator to better understand the true cost of your inventory and where you can make adjustments to boost internal efficiency and revenue.

RELATED READING: 3 Best Inventory Counting Methods for Small Businesses

POS Nation Powers Retail Businesses Nationwide

How does your point of sale system stack up against the industry’s best?

When it comes to attracting and retaining paying customers, investing in a modern POS system is one of the most important things you can do for your business. Unfortunately, most POS system vendors overcharge and underdeliver.

We’ve seen this scenario play out time and time again.

You’ve invested in an “industry-leading” point of sale system, but within a few months of use, you’re frustrated. The system just doesn’t offer the features you really need. Before long, you’ve invested in a thousand different “add-ons and upgrades.”

There has to be a better way, right?


To find the very best POS system for your growing retail organization, we recommend downloading our free guide: The Retail POS System Buyers’ Guide.

Retail POS System Buyers Guide


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