28.03.2024

How to open a building store?

Before opening your building store, it is worthwhile to monitor the region and see how much the area of ​​construction is developed in it. This information is easy to find on the Internet. Based on the extent to which construction is developed, it is possible to determine whether the construction market is developed, whether it has the potential for growth and whether you have many competitors.

The easiest way to open a building store is to buy a franchise «Krepyzh» .

But if you still want to do it yourself – we offer you step-by-step instructions from the expert of the company «Krepyzh» Mikhail Butusov .

A building store is one of the most popular and profitable businesses, which is not surprising. Construction works are almost always carried out by people: when there is enough finance, they start a new construction, when the crisis is in the yard – they repair what has already been built. So they always need a tool, fasteners and other products.

And the store will be in demand regardless of whether in a small or large city you plan to open it. And yet, in order not to lose, to start a business it is necessary to approach with the mind.

Personal experience
Before opening a store in a new city, our company makes detailed monitoring of the region. We also estimate the place where it is planned to open. All this helps to answer themselves to the question of whether it makes sense to open a franchise division.

Having found out the address on which it is planned to open a new store, marketers of our company make a detailed analysis of who lives around, what is the target audience. We also pay attention to the traffic-forming enterprises – industrial zones, recreational zones, etc. In addition, traffic flows are estimated – which key arteries are nearby, who travel by them.
The target audience of the building store usually includes several groups of potential consumers. The first of these is retail buyers, 60% of which are men.

The portrait of our retail buyer is a man aged from 23 to 65 years, active, having a stable source of earnings. He usually has a car, as well as a site on which he works – either a country house or a cottage.

Another group of our customers are corporate clients. Among them there are various assembly and construction brigades, companies engaged in the installation of plastic windows or the installation of stretch ceilings. Contracts are concluded with them and work is underway on the system of invoicing.

Another segment of potential buyers is Internet users. They, in essence, can also be divided into retail and corporate clients, but still it is a separate group. As a rule, through the Internet the purchase is made, if you need to order large-sized goods, or if the buyer knows exactly what product he needs.

For example, a professional needs self-cutters of a certain pattern. In order not to waste time and not to go behind them to the store, he makes an order on the Internet, prepares the delivery, and everything he needs immediately brings him to the point where he works.

Investment size

How to open a building store?

The amount of investment in the building store will depend on the format in which you open. It can be as a relatively small department, and a whole shopping center up to 3 thousand square meters. The amount of investment in such different formats can differ at times.

For example, take the medium format store with an area of ​​150 sq.m. To open such, it will be necessary 3,5-4,5 million rubles depending on what the assortment will be. If you focus on a tool for professionals, you will have to spend much more to purchase goods, and this, in turn, will increase the amount of investments.

If you open franchising, the first investment item will be a lump-sum contribution. In our case, it is 190 thousand rubles.

The second item is the rent of the premises. Here, the figures may vary depending on the city, location, condition of the premises.

The third item is trade equipment. It is possible to purchase completely standard shelving, but they should be quality and durable. The fourth is the purchase of office equipment: computers, cash registers, bar code scanners, barcode printer. In both cases, the numbers again may differ depending on many factors.

The biggest expense item is the creation of a stock of goods. The first filling of the goods takes place on a 100% prepayment, the cost is from 14 to 25 thousand rubles per 1 sq. M. area.
The fifth item of expenses is the design of the store, both internal and external (repairs, signs, etc.). Plus a small marketing budget, which is necessary at the start – about 150-200 thousand rubles.

Step-by-step instruction

Studying the location of your store and the target audience should help you with the further organization of your business. In particular, from where the store is located, its assortment will depend.

It is worth mentioning that it is better to make a bet not on a narrow specialization of the store, but on a broader one. This will mitigate the influence of seasonality and will positively affect the number of additional sales.

We have a certain basic commodity matrix, which is delivered to all stores. Plus, based on the analysis of a particular outlet, we load the goods that will be most in demand.

If the store is open in the industrial zone, there will go more goods for professionals – fasteners and expensive high-quality tools that can be used daily without fear of breakage. If the store is open in the area of ​​single-story buildings and private buildings, there will be more goods for household plots – lawn mowers, snow-harvesters, trimmers, etc. If the store is located on the outskirts of the city or next to the recreational zone, the emphasis should be on tourism products – tents, boats, motors, sleeping bags, coal.

Correct selection of the assortment will also help to bypass competitors, which in this market a lot. At the same time, it will be necessary to «fight» with small single economic stores, as well as with large international networks like OBI and Leroy Merlin. The question of competition with them is now quite relevant, so it’s worth to focus on it separately.

How to compete with international networks?

Choosing in favor of a wide product range, prepare to the fact that it will certainly intersect with what is sold from large retailers. We win from them in that we have a lot of goods for professionals. It’s worth betting on.

Just keep in mind that a professional tool is quite complicated to use, and therefore often there is a need for advice on its operation. Competent advice can also become your competitive advantage.

Another advantage of small building stores in front of networkers is a convenient location for customers. Large shopping centers are usually located outside the city or on the outskirts of the city, which is not always convenient. A small building stores are better located in walking distance to customers.

And finally, it is necessary to create the most comfortable conditions for corporate clients. For example, we can write an invoice for a product to a corporate customer, rather than demand payment from it at the checkout. It will be difficult to do in large retailers.

The next step is the acquisition of commercial equipment. As a rule, there is nothing complicated here. Suppliers should choose between the «price-quality» ratio. In order to save money, you can buy used commercial equipment.

Also, even before the launch, it is worth considering the issue of promoting your store. In our network, the promotion of each particular outlet is discussed individually. At the preparatory stage, we conduct an analysis of advertising channels, which are most effective at one or another point where the store opens. At us in Tyumen the best effect was shown by outdoor advertising, radio and the Internet. As for opening franchisees, we are scrupulously studying the effectiveness of advertising channels, choose the most effective and try not to be dispersed.

How to work with staff?

The requirements for personnel in the building store are generally the same as in any other outlet. For a store with an area of ​​150 square meters there will be enough five employees – one head and four vendors-cashiers. The last in our network work 5 days a week for 8 hours a day. In the morning at 9 o’clock the shop is opened by the first employee, after two hours a second one is connected to it. Usually in the store there are 3 employees at the same time, while people alternate.

In our company, salespeople perform a wide range of functions: they can work at the cash register, and in the hall can provide some help, advice, help choose the goods, bring it to the car. Our sellers are also warehouse employees, packers and cleaners.

We have launched a payment system that effectively motivates employees.

Employees are paid once a week. This allows you to have several control points within a month, monitor problems in the sales system and promptly eliminate them. In addition, employees are not lazy at the beginning of the month, because at the end of the previous attempted to implement the plan, laying out for all 100-150%. They work steadily to achieve indicators every week.

Often, the salaries of the sellers are made up of the salary and the percentage of sales. We have three-part payment. The first part – a constant salary, the second – premiums for the quality performance of direct duties. Every day, the employee, together with the manager, completes the check list. In it there are such items as compliance with labor discipline, regulations in appearance, the presence of price tags on all products, cleanliness of the hall, work with customers, the absence of smoke breaks. For execution of each of these points the employee receives a certain amount of money.

The third part – the percentage of sales – is automatically considered. The employee receives a certain percentage of each sold product. Plus there is a seasonality factor – if the employee sells summer goods in winter, he gets a little more for this.

An important issue for the store is the time of its work, since one must be ready to receive visitors at peak hours. Each of our divisions shows that the flow of customers grows at a certain time.

Usually, in small towns life after 2-3 hours of the day freezes, and buyers in stores can not be found. In large cities, the consumer flow is already nearer in the evening, and also in the morning hours. That in the middle of the day in the trading room was not completely empty, we arrange «happy hours», during which the buyer, when they come to the store, can get a discount.

All this concerns retail buyers, but professionals in the construction industry can look to us almost at any time of the day. By the way, the structure of demand changes with the course of the week. For example, on weekends people often come for goods for tourism.

A place

The choice of location is 70% successful for any outlet, so it’s important to take this issue seriously.

We try not to build building shops in the center. People usually come there to rest or buy goods not related to construction. Plus, renting in the center is quite expensive. Therefore, building stores are located on the outskirts of the city or in places where such stores have already accumulated.

Personal experience
Our first store was a large shopping center in the center of Tyumen. He has been working for more than 14 years, his customers know him well and continue to come. But most of our shops are still located on the outskirts of the city, or in industrial zones.

Recently, in Tyumen, construction has developed, and we are opening stores in areas where multi-storey buildings are being built. Construction brigades work there, and people make repairs. Also, our network stores sometimes open in small towns and villages. Plus there are shops that open up in private areas where people live on their land.

The room can be located either in a separate building or in a shopping center. Required convenient parking, because most customers come for the goods on their machines.

You also need to have the ability to lay out the streets. Thanks to it, buyers immediately see us, they understand that this is a store of a construction tool, because this tool is located in front of the entrance. They immediately define us, and this increases the client flow.

If you can place your store near the base or a store that sells materials for construction (gypsum board, wood, boards), it definitely should be used. When a neighbor offers construction materials, and you – a tool to work with them, the flow of buyers increases in both of you.

As for the room itself, the store should look good. The more comfortable it is, the lighter and warmer, the more attractive it is for the buyer. But in the building shop usually come the same builders in overalls, and they do not really need expensive or refined repairs. It is enough that the trading room is neat.

For the store it is advisable to choose a room of rectangular or square shape without excess bends and snacks. This will make it more convenient to arrange the goods. There should also be enough high ceilings (from 2.7 m), two entrances for visitors and loading of goods, and the possibility to place a sign on the facade and good lighting.

Documentation

The opening of a building store in terms of processing documents does not differ from the opening of any other retail store. To begin with, an entrepreneur will need to register a legal entity.

Usually, when our franchisees only open, they always register IP. The registration procedure in this case is easier, plus you can work on a simplified taxation system. It is more economically profitable.

But since a significant part of our customers are corporate clients, we need LLC to work with them. Therefore, we recommend registering both PI and LLC to separate wholesale and retail destinations.

The code of OKVED for the building store is 51.5.

You will also need to obtain permission to trade. To do this, you need to contact the local administration, SES, fire inspection, tax and mining.

SES should approve the list of goods that you are going to trade. The fire inspection will confirm the presence of the alarm system and the compliance of the premises with fire safety requirements.

Also, contracts for removal of solid waste, disinfestation and deratization of premises will be needed.

Check-list of opening

  • Analysis of the development of construction in the region,
  • Market analysis,
  • Analysis of competitors (assortment, prices, etc.),
  • Search for a room,
  • Estimation of a place of rent, calculation of the traffic, a choice of the optimum variant,
  • Analysis of the target audience,
  • Conclusion of the lease agreement,
  • Registration of IP or LLC, registration with the tax inspection,
  • Credit arrangement,
  • Measuring the room to create a design project,
  • Search for suppliers of trade equipment,
  • Order of commercial equipment,
  • Selection of assortment,
  • Order of goods,
  • Development of an advertising campaign for the opening,
  • Development and coordination of the signboard, its installation,
  • Development of shares, discounts and other marketing activities,
  • Staff search,
  • Interviewing, selection of candidates,
  • Scheduling shifts,
  • Festive opening.

Is it profitable to open

The business of a building store is attractive primarily for its stability. In the last three years, which are considered to be crisis, in most areas of retail trade, consumer traffic and revenue declined. In our own sphere, this decrease turned out to be minimal.

Working with a franchisee, we usually promise that in the second month of work they will come out on operating profit. But as a rule, it becomes sufficient to cover all costs from the first month of work.

Return on investment occurs in 16-20 months. Its term depends to a large extent on the extra charge you place in your store. The average mark-up is 55%. But if the store is in a remote area, then it can be much higher.

The profitability of the store is 30-32%.

As for seasonality, in winter the consumer flow is much less. We have a group of goods – hardware (nails, screws, washers, screws, etc.) – which are about the same year round demand. But sales of power tools for the New Year and immediately after it are reduced at times. In the winter, work clothes, equipment for snow removal, thermal equipment come to the fore. As can be seen from this example, the demand for different groups of goods during the year varies in different ways. Therefore, the range is worth doing.

The average check of the building store is 450-1000 rubles. And it’s not about the price of the goods. On the contrary, in our assortment there are such positions, the price of which is not high. But due to the large number of commodity directions, the conversion and the average check grow. For example, a person enters the shop behind a puncher, but passing through the departments he additionally buys screws, coal, etc.

In addition to selling additional positions, you can increase profits and attract customers to your store by holding various promotions and giving discounts. For example, in August we developed special offers on prices for the opening of the hunting season – reduced the cost of those goods that will be useful during recreation or hunting (tents, boats, sleeping bags, etc.).

Another way to create a shopping hype is to hold various contests. In 2014-2015 we realized a project in the framework of which everyone who bought goods in our stores for 3 thousand or more rubles received an opportunity to take part in the competition, the main prize in which is a car. Such actions allow not only to increase the flow of customers to stores and increase the average check, but also work well for brand recognition.

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