Trade in construction materials as a business. Difficulties of business selling building materials. Economic feasibility of business
In any locality in Russia there is and will always be a need for the construction of facilities for various purposes. And over time they deteriorate and require repairs. This means that we cannot do without construction and finishing materials in our lives. Hence the conclusion - the sale of such goods is a popular and profitable business.
Reconomica today I will share with you, dear readers, the experience of a successful entrepreneur who combined production building materials with the sale of not only our own, but also similar products from other companies.
The main tool for the development of this business was the organization of an office to receive orders from consumers for similar goods. You will learn about the positive and negative aspects, the benefits received and the prospects of the specified business.
Greetings. My name is Mark. I am 37 years old. I'm from Astrakhan. Now I am selling tiles, tiles, decorative mosaic and many more related products for construction, repair and decoration of premises.
I don’t have a store, but an office for receiving orders. Trade turnover ranges from one and a half to two million rubles per month, from March to November inclusive.
Sales begin with the onset of the construction season and until its end. I’ll briefly tell you how I came to this type of activity.
My first steps in the construction business
It all started with the production of paving slabs; I organized this business in 2014.
Production of paving slabs.
Things weren't going well with production. There was only enough money to rent premises, pay staff and pay taxes.
At first I worked with virtually no profit. There were orders constantly, but it was almost impossible to make money on them.
There was a need to increase production volumes and reach serious clients. This step required huge investments in production. There were no such opportunities.
Choosing the direction of further development of the business
The further path of business development was vague. It was necessary to either urgently decide something or stop business activities.
How the idea came
An acquaintance of mine worked at that time in a managerial position, in production company, which specialized in making bricks and concrete products. He suggested ways for further development.
Finding ways to promote your business
I thought that production was built first, and then the goods produced were sold, and the business flourished. Maybe this happens on paper, in fantastic business plans, but not in reality. First, you need to trade someone else’s goods and replenish your customer base, and when stable demand arises, you can open your own production if it is profitable.
Opening without market knowledge and experience is a path to failure.
Proof of this is the many small businesses that opened and closed, accumulating large debts.
First mistakes
I was like that too. I read an amateurish business plan in some social network. Everything seemed easy and simple. But in fact, he had almost said goodbye to the invested money and was ready to sell his car to pay off the accumulated debts.
Business is a science and a way of life. This craft can be mastered. The main thing is to set the goal correctly and find a short path to it.
Initially I wanted to try something I was unfamiliar with. Business does not tolerate amateurism. Especially in the manufacturing sector. It took a long and difficult time to get out of the current situation. It’s very good that there was an experienced person who told me what to do next.
Stages of opening and developing a sales office
Choosing a retail location and its purpose
Even if there is no one to sit there, the sales office should be in order to:
- receive clients;
- present products;
- conclude contracts.
Conditions for renting premises
On the territory where I rented manufacturing facility, there was a free room. Its area was 150 m², the rental cost was 15 thousand rubles. per month, without utilities. The total amount of payments was approximately 18 thousand rubles. per month. I reluctantly took this step.
Equipping the office with everything you need
For full-fledged trading you will need:
- furniture;
- racks;
- computer;
- Printer;
- various stationery items.
I spent 70 thousand rubles on furnishings and equipment for the office.
The furniture was the cheapest. The printer was also included in this price; the computer had to be brought from home. The retail space was large, but there were no other options.
Setting up a full-fledged office is expensive.
Later, the space of this office became insufficient.
Methods for displaying products on the sales floor
The first thing I did was exhibit my products. Since there was a lot of space, paving slabs laid out in all sorts of ways. Combined two, and even four different colors tiles of one model, which could be laid in different colors.
Showing samples of paving slabs is a necessary sales attribute.
Thus, I could not show my products in a workshop environment.
Expansion of the range of building materials
So I became a representative of a mini-factory for the production of building materials.
In the sales area, he displayed the bricks they had made, and placed catalogs of the rest of the products, which, due to their large dimensions, could not be placed in the office.
Display of samples of bricks and other products in the sales office.
Samples of floor slabs and foundation block I placed it near the gate of my workshop.
Product promotion activities
The next question concerned information support for trade - marketing.
The office was located on the roadway. The administration allowed advertising banners to be placed on the building. I made two banners measuring 1 by 4 meters to hang on different sides of the building. Their cost was 8 thousand rubles.
And they also made a remote stand, which was located in front of the entrance to the building. Its price was 2 thousand rubles.
From 4 thousand to 7 thousand rubles were spent on promoting products in Avito, newspapers, making leaflets and business cards. per month.
How to make money selling construction products from third-party companies
As a result of the increased demand for their products and the inability to satisfy the needs of consumers with the available production capacities, it was necessary to urgently make some decision.
Reasons for turning to other manufacturers
There was no money to expand production, and I didn’t really want to increase it.
IN warm time year, rent could still be paid, but in winter, when there are almost no orders, and production room You need to heat, the rental cost was significantly unaffordable.
The solution was to negotiate the sale of tiles from other manufacturers .
My advantages when choosing a partner
In the modern market, the problem of any manufacturer is the sale of products. In such an environment, with fierce competition, manufacturers who do not have their own sales channels become hostage to sellers.
If I have a good client, then the company provides a minimum wholesale price for the products.
The commodity producer always has a need for Money ah - these are debts on wages, rent, debts for supplied raw materials, or simply a person has a loan from the bank.
The manufacturer is always happy to sell, even with minimal markup on the product. I took advantage of this situation.
Very often he earned more from sales than the manufacturer.
Positive changes in business provide impetus for further growth
When organizing any business, constant movement forward is necessary. Otherwise - stagnation.
Significant progress in trade after the conclusion of the partnership agreement
Finding a manufacturer to collaborate with turned out to be easy. An agreement was signed with him. The list of products presented far exceeded my product output. A quarter of the room was occupied by an exhibition of their products.
I started searching for suppliers who can provide exhibition samples, stands, catalogs and other promotional products for free.
Finding new ways to increase sales
And a certain style of work in such auctions also emerged. It was necessary for the manufacturer or wholesaler whose products I represent to release the goods from the warehouse at the sales price in their office.
Not everyone agreed to such cooperation, but still there were entrepreneurs who wanted to expand. They also had conditions - if I represent their assortment, then I no longer work with anyone.
Samples of reinforced concrete products in an open area.
Optimization of retail space
The trading floor began to fill with samples of various goods. Then he divided the trading zones. On the production site he placed the largest specimens - reinforced concrete products.
Roofing samples.
They were joined by samples of timber, roofing, mesh, metal products - everything related to construction.
Samples of rolled metal.
I divided the office space into three parts - an office and two halls. The first hall served to display products for construction and landscaping, the second hall presented materials for finishing rooms and bathrooms.
Sales area with samples of finishing materials.
I filled empty spaces in the trading floors with goods that fit the theme. For example, the sales floor was replenished with two stands - one with LED lighting, the second representing manufacturers of swimming pools for personal plots, saunas, and baths.
Temporary setbacks are inevitable
Not all positions were profitable. Some goods or services were never sold. For example, I have never accepted an order to make a pool or fountain. Mosaics for bathrooms sold very poorly and took up a lot of space, but bright and beautiful stands with such samples had a positive influence on buyers.
Not everything is on sale, but some products create a good atmosphere on the sales floor.
How much does trade in construction materials bring?
I’ll tell you briefly about the profit received from the sale of construction and finishing materials.
Amounts of allowances for goods
I marked up the goods sold by 10 to 30%. The highest markup is for paving slabs and building materials.
Tiles, porcelain tiles, tiles and countertops from natural stone. The average markup was 20%.
What does income depend on?
If the turnover passing through my office amounted to 1 million rubles, then I have approximately 200 thousand rubles left in profit.
From there, taxes, deductions, rent, advertising expenses and the salary of the seller and accountant are deducted.
Half of this amount remains. If at the height of the season you manage to sell 2–3 million rubles, then the costs are the same, and the profit increases. I wrote my turnover above. It’s not difficult to calculate how much the business brings me in net.
But don’t forget that January and February are months with almost no revenue. However, money must be paid for rent, and employees of the enterprise must be paid wages. And for this you need to work hard during the busy season.
My trading method
Some, after reading the article, may think that I am an ordinary speculator, and buyers do not receive anything when purchasing goods through my sales office. If that were the case, then customers wouldn't come here.
Consulting customers on products
I made a point of advising consumers regarding the characteristics of the building materials they purchased. In addition, he did not accept low-quality goods for sale.
Consumers did not need to run after sellers and beg for illiterate advice about the product I was selling, since I knew everything and could answer clients’ questions.
Application of the software
He also mastered computer 3D modeling, and made room renovation projects for free, calculating the materials used.
For example, the program calculated the quantity of tiles for a bathroom accurately, and customers did not have to purchase extra material, such as tiles and glue.
Design service
My salesperson also provided design services and helped buyers decide on colors, sizes, and finishing options.
It's very hard work.
An impeccable reputation of a businessman is an important component of a successful business.
Another advantage is reputation. In three years of work I have not let anyone down, so wholesale consumers have established business relationships with me.
It would seem that construction companies can go to manufacturing plants themselves and purchase goods in large quantities.
But, apparently, there are problems that prevent such actions.
When words do not differ from deeds, this is a reputation that also pays off.
In addition to the above, it is very important that the ordered goods are correctly processed, counted, checked and delivered on time.
Future plans
Now I am planning to open a wholesale office-warehouse that works on the same principle. There are many manufacturers who want to sell their goods. Now I want to negotiate with large companies throughout the European part of Russia. I am sure that success will definitely come.
- Capital investments: 800,000 rubles,
- Average monthly revenue: 450,000 rubles,
- Net profit: 65,414 rubles,
- Payback: 12.3 months!
According to a study conducted by ABARUS Market Research, the Russian retail trade market for building materials, compared to the West, is at an early stage of development. At the same time, the annual growth rate is 20%. In 2007, the volume of the retail trade market for household goods and repairs was more than $14 billion in Russia. In 2011, the market volume was about 17 billion dollars, and by 2020 the market volume will be about 30-35 billion dollars. (expert opinion).
About 80-90% of the volume construction market falls on large network companies(both Russian and foreign), and the remaining part of the market is divided between single stores and small retail chains (regional). Taking into account the fact that several new foreign players are planning to enter the Russian market, as well as taking into account plans to expand existing federal chains, the market share of “single stores” will decrease.
In connection with the above, small stores cannot compete with federal retail retailers either in prices or in the range of products offered.
But if you want to start a business in the retail trade segment of building materials, you can try to open a small retail outlet in the “Near-Home” format.
This type of store has the following advantages:
- The opportunity to open a store in an area where federal chains will not enter due to the impossibility of obtaining large turnover.
- A special range of products presented and an individual approach to the buyer.
1. Organization of retail trade in building materials
1.1. Room
The premises in which it is planned to open a retail hardware store in the convenience store format must meet the following criteria:
- Area 30-50 sq.m.
- The premises should be located in a residential area, within walking distance for buyers.
- Lack of other stores selling building materials in the immediate vicinity.
1.2. Equipment
The choice of equipment can be approached quite freely, so to reduce the cost of purchasing equipment, some of the racks and shelves for goods can be made with your own hands, and some of the equipment can be bought used
1.3. Staff
The store must be open 7 days a week, operating hours from 9.00 to 20.00. For these purposes, it is necessary to have 2 sellers on staff. (work in shifts, two after two)
1.4. Range
During repairs, it often happens that there is not enough wallpaper glue, the hacksaw blade for metal is broken, there are not enough nails, the glue has disappeared somewhere, the neighbor took the screwdriver and did not return it. The buyer is not interested in going to a construction hypermarket for such small things; he is ready to buy all this close to home, even at a higher price; therefore, all this should be presented in an assortment.
Approximate assortment of the store:
- Consumables for tools
- Assembly adhesive
- Wallpaper glue
- Nails, dowels, bolts, etc.
- Building tools
- other related products.
For optimal performance the range of products sold should be about 300 items.
1.5. Suppliers
The choice of suppliers must be made from wholesale companies operating in the region. These companies themselves deliver products to the store; if you work with them for a long time, it is possible to provide a deferred payment.
Replenishment of inventory and assortment must be carried out on a weekly basis.
2. Technical and economic calculations
2.1. Opening capital costs
To maintain assortment and uninterrupted trade inventory should be at least two monthly revenues (at purchase prices), and the optimal balance is 2.5-3 monthly revenues.
2.2. Revenue
The revenue of a small (up to 50 sq.m.) hardware store in the “At home” format, located in a densely populated residential area, with a well-chosen assortment, and also in the absence of competitors in the immediate vicinity, is about 400 -500 rubles. per month.
To calculate payback and profitability, the monthly revenue was taken as 400 thousand rubles.
2.3. Cost price
The markup on products sold is 50-80% depending on the product; for calculations we took an average markup of 60%
2.4. General expenses
2.5. Calculating the profitability of a building materials store
2.6. Payback calculation
3. Organizational issues
3.1. Organizational form
The optimal organizational and legal form is an individual entrepreneur.
3.2. Tax system
If you believe experienced entrepreneurs, opening a small retail outlet in this area will bring its owner more losses than profits. The reason for this conclusion lies in the fact that the costs of renting a trading area and warehouse, wages, taxes and public utilities, take away almost all profits and do not give the business the opportunity to develop.
Is it really possible for an entrepreneur who wants to open a small building materials store without significant investments to create profitable business is unavailable? Let's figure it out.
Usually, in search of materials for repair and construction, a potential buyer is inclined to go to a large construction center, the area of which can be 1000 or even 2000 sq.m. The reason for this is several factors: the ability to purchase everything you need in one place, a wide range, and receiving a free consultation with a specialist if questions arise.
But there are also cases in which the buyer is more likely to go to a small construction pavilion: collecting materials that have run out during renovations, purchasing a small amount of building materials for cosmetic repairs, the location is close to home.
The moment that determines the profitability of a business is the choice of an advantageous location for sales. While large sellers are forced to sell their goods on the outskirts of the city, you can expand your business in a residential building, shopping center or local market.
How to choose and prepare the right premises for a store
Where to start to get building materials from scratch? To open a profitable point for selling construction and finishing materials, experts recommend paying attention to the first floor of a residential building near new buildings, or a construction market located within the city.
When opening such a business in a residential building, make sure there is an emergency exit in the premises - this will be needed to pass the inspection fire safety. If the apartment is located in a residential building, in order to process documents and legally carry out trade, you will need to remove it from the housing stock.
The profitability of your business will increase significantly if trade area will be your property, however, entrepreneurs do not recommend rushing into this and working for the first 2 years in rented premises.
If soon after opening, you discover that this place is not profitable month after month, then it will not be difficult for you to simply leave this outlet, without the need for subsequent sale of real estate.
If you choose a construction market, before purchasing products and renting premises, walk through the pavilions, study what your future competitors are selling and at what price.
Remember: you will be of greatest interest to the buyer only if you offer a unique product that is not on the market, or the same one, but at a more attractive price.
Decoration of a building materials store
When preparing a trade and warehouse area, there is no need for expensive finishing materials. The finished room should be bright, clean and dry. Make it inexpensive redecorating and make sure there is good ventilation. This is all that is required from the premises for successful sales of your business. To prepare the premises you will need an average of $6,000 – $9,000.
Equipment for a building materials store
To trade building materials, you will need to purchase a cash register, as well as counters, display cases and shelving that will help in displaying finishing materials. Organize the lighting on the shelves in such a way as to create an opportunity to clearly see the products on offer.
If your business sells power tools, be sure to equip your display cases with several outlets.
Registration of a business selling building materials
The sale of building materials, like any business, requires pre-registration with the tax and pension authorities. For a small pavilion, registering as an individual entrepreneur is sufficient; this will help significantly save on taxes.
OKVED codes To register such activities, they present an impressive list, depending on the presence or absence of a trading platform on the Internet, courier delivery and other specifics. The main code that you will need when registering is 47.52 Retail trade in hardware, paints and varnishes and glass in specialized stores.
What documents are needed to open a building materials store?
Construction materials cannot be obtained without passing inspections and paperwork. You will need to obtain a permit and patent to trade. What is needed to obtain a permit: the following documents must be submitted to the trade department of the city administration:
- Conclusion from the fire inspection and SES;
- A certified copy of documents confirming your registration as a legal entity or individual entrepreneur;
- Lease agreement or documents confirming ownership of retail and warehouse premises;
- Certificate of registration in tax office;
- Document on the qualifications or education of the founder;
- Information about the operating mode of the enterprise.
As for the trade patent, it can be obtained from the tax office. When applying for a patent, you will go through the registration procedure cash register. All these activities can take from two weeks to several months, and the cost of registration and preparation of all documents necessary to start activities will be about $300.
Construction store assortment
When choosing an assortment for your organization, it is very important to provide the buyer with products of various price categories. As a rule, at least two thirds of products are presented in the middle price segment and one third remains for cheap and expensive representatives.
The assortment of the trading platform may consist of the following construction goods:
- Paints, varnishes;
- Cement;
- Tile;
- Wallpaper;
- Skirting boards;
- Hand power tools;
- Construction accessories;
- Gypsum;
- Parquet, linoleum, laminate;
- Self-leveling floors;
- Various primers;
- Spatulas, brushes, rollers, etc.;
- Drywall;
- Glue;
- Construction mixtures, etc.
Construction materials store staff
To open a building materials store, owners usually limit themselves to hiring one salesperson, or, in order to save money, stand behind the counter themselves.
A seller working as a single person must have sufficient knowledge in the field of construction, design and architecture, as well as a good knowledge of the range, purpose and features of each item of goods.
If there is an experienced and experienced person behind the counter knowledgeable person, your organization's sales will be 30% higher than otherwise, so it is recommended to take this moment with great responsibility and attention.
Profitability of a hardware store
Let's calculate the profitability and find out how much it costs to open building materials with an area of about 100 sq.m.
Investments:
- Purchase of goods for sale – $10,000;
- Registration, inspections and paperwork – $300;
- Cosmetic repairs, preparation of the trade and warehouse area for work – $8,000;
- Purchase of shelving and cash register – $7,000.
Total: $25,300.
Monthly expenses:
- Rent, utilities – $560;
- Replenishment of goods - $4,000;
- Salary to the salesperson – $280;
- Accounting – $80;
- Taxes – $130.
Total: $5,050.
Profit:
We will take into account the profit based on the trade margin - 45%.
The cost of sold building materials for the month is $4,000.
Profit for the month – $5,800.
Gross profit – $750.
Thus, with regular sales of at least 40% of the total stock of goods monthly, the investments made will pay off in 3 - 3.5 years of operation.
Talking about how to open hardware store from scratch and make it profitable, it is useful to know a few from experienced entrepreneurs:
- Group products. Location matters a lot. It is important here that the buyer can familiarize himself with all products of one category in one place. Also distribute the products according to their intended purpose. Let brushes and rollers lie next to paint products, and screws and keys next to screwdrivers;
- Samples. Each product that has wide choose colors and textures, there should be a catalog of samples that can be properly examined and touched. Place samples by color scheme and indicate the article number for each item;
- Access. Give customers the opportunity to turn on and see how a drill or any other power tool works. Open access to your products;
- Don't stop at one outlet. One small pavilion will not be able to generate a sufficiently high and stable income. By developing and opening new points, you can protect your business from sudden surges in demand and significantly increase your income.
- Something that the buyer may forget about. Small consumables, such as light bulbs and batteries, are best placed near the cash register. The buyer will definitely remember that he wanted to purchase them while waiting for payment or his turn.
In this article we have given recommendations regarding building materials. Calculations and experience of entrepreneurs in this area have shown that, under certain circumstances, this enterprise can be truly profitable and effective.
Research on the construction business market has shown that even despite some recession in the economy, the construction market is growing every year by 15-20%. This means that building materials are in growing demand.
Drawing up a business plan
Before starting any business, you need to draw up a competent business plan in order to understand the size of future investments. So, let's draw up a business plan for a hardware store.
Upcoming opening costs:
- equipment from 80 thousand rubles;
- registration of documents from 10 thousand rubles;
- rent for the first and last month from 60 thousand rubles;
- purchase of goods from 600 thousand rubles.
So, it is clear that the initial costs will range from 750 thousand rubles. In addition, there are monthly expenses:
- employee salary from 50 thousand rubles per month;
- rent of premises for a store from 30 thousand rubles per month;
- taxes from 10 thousand rubles per month (depending on the form of ownership);
- advertising from 20 thousand rubles per month.
Monthly expenses will be at least 110 thousand rubles.
When setting a markup on a product, you should take into account competitors' prices and ensure that your prices are beneficial to customers. As a rule, the markup is about 45-65%.
Taking into account the markup, the profit should be at least 450 thousand rubles per month. But keep in mind that in the first months the flow of clients will be small - they don’t know you yet. But with good advertising and favorable pricing policies, the flow of customers will grow steadily. Payback for the store should be expected no earlier than after a year of successful operation.
Selection of premises
The right location for your store is at least half the battle.
Therefore, in order to open a building materials store from scratch, you need to know the basic criteria that you should focus on when choosing the location of your future store.
An excellent choice would be the area of new buildings. It is worth paying attention to the lack of competitors nearby, but at the same time, a location near the construction market would be a good place. Having parking in the immediate vicinity of the store will significantly increase your popularity among customers, because building materials often have significant weight. Therefore, not only parking is needed, but also good access roads for large vehicles. Nice place There will be a place in the nearest suburb, next to large shopping centers.
Read also: Selling clothes online: where to start, how to find a supplier
There are no specific requirements for the premises for a hardware store. The only condition is the removal of the premises from the housing stock. It is advisable that the area of the premises be at least 150 square meters, because a store with a smaller area will most likely become unprofitable.
It will not require any special investments in the renovation of premises for the sale of building materials. It is enough that the room corresponds to the basic sanitary requirements, it was dry and clean.
Required Documentation
To legally conduct any business, it is necessary to formalize everything permits. The most important issue is the issue of registration of ownership.
You can register as an individual entrepreneurship (IP) or a legal entity - a limited liability company (LLC).
The choice will depend, first of all, on the scope of the future business. If you are planning to open one small store, then an individual entrepreneur will be enough, but if you are planning to open a construction hypermarket or even a chain of stores, then it is better to choose an LLC.
Having chosen the form of ownership, you need to select a code for the all-Russian classification of species economic activity(OKVED). For a hardware store, OKVED should choose from section 47.52 - retail sale of hardware, paints and varnishes and glass in specialized stores. There you can select one or more codes that suit the specifics of your store.
Selection of equipment and purchase of goods
What equipment to choose and what do you need to open a hardware store? If the store format is small, then inexpensive display cases, racks and shelves will be enough.
When purchasing goods for your store, you should focus on the main product groups:
- wallpaper and glue;
- dry mixes;
- varnishes and paints;
- floor covering;
- plumbing;
- doors;
- construction tools;
- electrical equipment.
But if your store is small, then it is better to choose one of the product groups and present it as widely as possible.
Actually, the choice of equipment and product range directly depends on the format of the future store.
Advertising
Before opening a hardware store from scratch, you need to think through an advertising campaign. It is worth allocating a sufficient amount so that potential customers learn about the upcoming opening, so you need to start advertising your hardware store in advance, even before it opens.
You need to think through a loyalty program in advance for regular customers, order discount cards. You can schedule a free distribution of loyalty cards to coincide with the opening of the store, and then issue them after a purchase for a certain amount.
The global economic crisis has had a negative impact on the construction industry. However, despite a significant reduction in construction volumes, there is a stable demand for building materials and related products. In order to identify the relevance of this area, a businessman needs to carefully analyze Current state market. Only after the nature of consumer desires has been determined and competitors have been assessed can one begin to develop a business model for a future enterprise. Below, we propose to discuss the issue of how to open a hardware store from scratch.
The hardware store is one of the most popular and profitable types business
Relevance of the construction business
A detailed analysis of the selected market segment allows an entrepreneur to assess the level of demand for his idea. According to statistics, today there is a high growth rate in this area. The increased demand for building materials is explained by the growing number of new buildings, shopping complexes and other construction projects. Based on this fact, we can conclude that this direction is practically not tied to economic conditions
. To create a successful business, an entrepreneur needs to take care of forming an initial customer base and product range. Particular attention should be paid to various organizational issues related to opening a retail outlet. At the preparation stage, the future businessman needs to decide on the trading format. By making an early decision, the entrepreneur gets the opportunity to study in advance all the intricacies of future activities. If there is a lack of funds to open a large retail outlet, it is recommended to start with a highly specialized store. This choice will allow you to develop a main customer base, which will serve as a kind of advertising for the store. In order to receive positive reviews and reputation, an entrepreneur only needs to choose
quality materials
to form a product line. This factor contributes to the launch of “word of mouth”, the effectiveness of which exceeds the effectiveness of many classical marketing tools.
It is important to understand that people who want to purchase building materials are not limited in their choice of stores. In order for a potential client to choose the entrepreneur’s store, you will have to develop several different methods to combat competitors. You can attract customers only through low prices, high-quality goods or exclusive products, which are not available from other merchants. Before starting to create a business, the future store owner needs to carefully study the specifics of his city. Choosing a location where several companies already operate in a similar direction requires the development of a special marketing strategy based on
It is recommended to evaluate the work of competitors taking into account the chosen concept and format. Today there are three main directions, each of which has unique specifics. Let's look at the features of each format:
- Wholesale and retail sales. This business format is more attractive for those entrepreneurs who have own production. The presence of a workshop allows you to significantly reduce the size of the initial investment. As a rule, such points are located near central markets. To implement this project, real estate with large area, where various products will be displayed. The markup on the assortment varies from fifteen to forty percent. The main advantage of this direction is the ability to interact with both ordinary clients and construction companies that will purchase goods in large quantities.
- Highly specialized store. According to marketing experts, this trading format has lost its relevance. As a rule, such stores specialize in two or three product groups, in the form various types cement, primer or paint. It is important to note that this format of commercial activity has a high risk of unprofitability.
- General store. The assortment presented in such stores includes several hundred product items. One of the advantages of this format is the relatively low threshold for entering the business. Even with a small amount of money, a competent businessman can organize a profitable and successful project.
Construction works people do this almost always: when there is enough finance, they start new construction; when there is a crisis, they repair what has already been built Business plan for opening a building materials store
When drawing up a business plan for a hardware store, it is very important to pay special attention to small details. This applies to both determining the organizational status of the future business and forming an assortment. Attention to detail will significantly reduce organizational costs and speed up the pace of project implementation.
Registration procedure
At this stage, the future businessman needs to make a choice between the status of a legal entity and a private entrepreneur.
When making this choice, you should take into account the format and scale of the business being created. If you want to open a small retail store, you just need to register as an individual entrepreneur. To open a retail chain or large supermarket, you will need to create a limited liability company. One of the important aspects of the registration procedure is the choice of economic activity codes. In the case of a hardware store, it is recommended to choose code “47.52”. Using this code allows an entrepreneur to engage in retail sales paint and varnish materials
, hardware and glass. As additional codes, it is recommended to select those values that correspond to the specifics of the selected format.
Choosing a suitable room Before starting to search for real estate, an entrepreneur needs to carefully study a number of basic parameters that are used to select specific objects. The most optimal location is the construction market. In addition, you can choose one of the areas where new residential buildings are being actively built. When choosing a specific point, you need to take into account both the location of competitors and the availability of parking spaces. These actions will help to significantly increase the influx of customers who will buy building materials in large quantities. It is very important that cargo vans and cars can drive to the selected location.
Typically, such properties can be found closer to the city outskirts.
It should also be noted that there are no strict requirements for the premises itself. The only requirement of the control authorities is the removal of real estate from the housing stock. To organize an average store you will need an area of more than one hundred and fifty square meters. Another advantage of this direction is the possibility of refusing to carry out repair work. In order to start work, it is enough to bring the premises into compliance with SES standards. The store will be in demand regardless of whether it is small or big city are you planning to open it
Store equipment is important. Not every buyer will want to purchase goods at those points where it is difficult to independently find the products of interest. From this we can conclude that the presence of commercial equipment intended for displaying goods is one of the mandatory requirements. To get started, you will need to purchase several demonstration podiums and tables, racks and shelves.
The business plan for a finishing materials store must contain information about the total cost of purchasing commercial equipment. To purchase all of the above equipment you will need to spend from one hundred to one hundred and fifty thousand. The rest of the necessary equipment can be purchased after opening the point and making adjustments to the product line.
Product range
To organize a general store, you will need to enter into agreements with several sales offices that will be able to provide all the necessary products.
It is very important to find suppliers who can handle large volumes. You also need to understand that not all companies will want to cooperate with newcomers. The initial assortment should include about five hundred different products. At this stage, it is recommended to select exclusively in-demand product groups. Attempts to experiment with the assortment may lead to the first losses. The initial product line must include paint and varnish products , adhesive and Decoration Materials , as well as fastening elements. In addition, you will need to purchase Consumables
(sandpaper, grout, etc.), as well as construction equipment. Product display also plays a significant role. Each product group should be visible from anywhere on the sales floor. Many experts in this area recommend using the widest possible range.
During the first months of work, the entrepreneur must carefully study consumer demand to identify in-demand products. It is very important that each product group is represented by several products from different price categories. This step will allow you to interact with both highly solvent clients and those people who want to purchase budget products. Before opening your own hardware store, it is worth monitoring the region and seeing how developed the construction industry is in it
Hiring Quality of service is one of those advantages that allows you to win in. First-class service allows us to form a large customer base. Each person hired as a salesperson must know all the characteristics of the goods presented and have knowledge of construction industry. The issue related to the construction of a work schedule deserves special attention. Typically, hardware stores are open twelve hours, seven days a week. To work in such a mode, several salespeople working in shifts will be required.
To improve trading efficiency, it is necessary to introduce a bonus payment system. A certain percentage of total sales must be added to the established salary amount. This approach guarantees decency, accuracy and precise execution of your job responsibilities on the part of hired workers.
Marketing and advertising
When developing a marketing strategy, it is necessary to decide in advance what advertising tools will be used to promote the project . It is necessary to start an advertising campaign several months before the opening of the outlet. The best results are achieved by advertising banners placed along busy streets. In addition, you can order advertising on cars. The use of the media is relevant only for large cities. In the provinces, this advertising tool will not bring the desired result.
It is very important to first develop a program of bonuses and discounts for regular customers. The distribution of discount cards can be organized on the opening day of the outlet. In addition to the initial advertising costs, you should consider the monthly costs aimed at maintaining the results obtained.
The financial analysis
When conducting financial analysis It is very important to consider the store format and its placement. The costs of completing the registration procedure vary from ten to twenty thousand rubles. You should also take into account the costs of purchasing commercial equipment and starting assortment. The amount of this article can reach two hundred thousand rubles. Another fifty thousand will be required for repairs and preparation of the premises.
The largest monthly cost item is rental property. The cost of a monthly rental of a room that meets all necessary requirements, is about thirty thousand rubles. You should also take into account the costs of creating a salary fund, paying taxes and replenishing the assortment. The total monthly costs can reach three hundred thousand rubles.
In order to calculate the profitability of a given enterprise, it is necessary to take into account the value of the product margin. Setting a forty-five percent markup allows you to receive revenue in the amount of three hundred and fifty thousand rubles. In this case, the entrepreneur’s net income will be only fifty thousand. Based on these calculations, we can conclude that the payback period of the project will be about three years. However, in practice, there is much more high level profit, which allows you to recoup the capital within eighteen months.
The target audience construction store, as a rule, includes several groups of potential consumers at once Taxation
In order to determine optimal shape taxation, should be taken into account as specific trading activities, and legal status.
Individual entrepreneurs are recommended to use a single tax on imputed income. Using this regime can significantly reduce the impact of the tax burden on a developing business.
In the case of an LLC, it is more advisable to use the simplified taxation regime under the “income minus expenses” system. Selecting this mode allows you to calculate the tax base based on net income.
What is the markup for building materials? As we noted above, the level of commodity markup on building materials varies from fifteen to fifty percent. However, when developing a pricing policy, it is very important to take into account several nuances. One of these nuances is economic features
region. You need to understand that luxury products intended for people with high incomes will remain unclaimed in small provinces. One more important factor
is the cost of goods from competitors. In order to lure their customers, it is necessary to set prices several percent lower than in the stores of opponents.
What to do with competitors When creating a general-purpose hardware store, an entrepreneur needs to be prepared to compete with large retail chains. The only way to get large customer traffic is to have niche products.
Another important advantage of small stores is their convenient location. Many large shopping centers are located closer to the outskirts of the city, which may be inconvenient for most customers. Another way to win the competition is cooperation with large clients in the form of construction companies. Concluding such contracts can significantly increase the profitability of a business.
The amount of investment in a hardware store will depend on the format in which you open Conclusions (+ video)
In this article, we looked at the question of how to open a building materials store from scratch. In order to master this market, an entrepreneur needs a well-developed business plan, built taking into account all the subtleties and nuances of this area. Availability step by step guide significantly simplifies the implementation of the project and prevents the emergence of possible risks.
