Be Realistic About the Numbers when Starting a Dollar Store

Between all of the positive news in the media and the hype of some within the industry, it is hard for those thinking about starting a dollar store  not to get overly excited about the prospects of instantly becoming a retail success just as soon as they open for business.  Yet as with all business opportunities, a better approach is to carefully examine the opportunities associated with a dollar store business.  You should seek the help of trusted experts, and then re-examine every aspect of the business opportunity before you carefully make your decision.  Only then should you actually make a commitment to move forward. 

In this article I cover some of the important considerations for those thinking of starting a dollar store.  Use these as a place to start developing your own list of actions to be completed before making your final decision about a dollar store business.

    Be realistic in your estimates. 

Look into the actual performance of existing dollar stores similar to your proposed store.  Focus on performance during their first year of operation.   Look at important information such as store startup and ongoing operational costs, sales, and profits.  Try to locate multiple existing stores for this data.  Do not make any assumptions about your own income potential such as being able to generate higher sales, or reach profitability sooner, or being able to operate for significantly less investment – use the real life data from these businesses. 

    Have a plan of attack should you decide to move forward.

Know the specific steps you will be taking and the costs associated with each.  Be sure you have them in the order they must occur during your dollar store business startup.  Include actions to occur during preparation, the grand opening, and on into the future.  Use this plan of attack to understand when actions must be taken, the specific details of major actions, and even costs and expected returns.  Be very detailed in your plan of attack during the first year of operation.  Do not stop there, however.  Think ahead to the second through fifth year of operation.  Include fewer details, but be sure to document the major actions and expectations. 

    Do not fool yourself into thinking starting a dollar store is a sure bet winner.  You must know the costs, risks and potential rewards.  If you do move forward thinking you can be a success with your dollar store business even though you have inadequate funding or are missing any of the other critical ingredients you are really adding great risk.