How to Start a Holiday Store Business

Part 1 - How to start a Holiday Store business - Background

Do you hesitate to take down the Christmas tree or put away Halloween decorations for weeks or months after the occasion? If so, consider opening a holiday shop. This retail business gives you the opportunity to make every day feel like the holidays. The stores sell items such as ornaments, masks, gifts, and greeting cards throughout the year. You can focus on a single holiday or many different celebrations.

Our guide is in 3 parts:

• Part 1 - How to start a Holiday Store business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a Holiday Store Business?

You’ll have to acquire a considerable amount of equipment. These items include racks, tables, shelving, baskets, signs, cleaning tools, and a point-of-sale terminal. If you want to save money by purchasing used fixtures, consider visiting a store-closing sale in its final days. You will also need supplies and inventory. Established retailers’ holiday clearance sales may provide a source of inexpensive merchandise to resell. After you pay for permits and licenses, your initial costs will likely exceed $2,500.

What are the ongoing expenses for a Holiday Store Business?

You must rent or own commercial space to run a retail shop. The cost varies tremendously depending on a unit’s location and size. Rent prices have fallen as online shopping increases. The Balance reports that stores spend around $17 for each square foot on average. Many retail renters need to pay part or all of the property taxes as well. Common-area maintenance fees, wholesale products, advertising, and employee wages contribute to additional ongoing costs. Processing fees take a small percentage of all non-cash payments. The average retail store spends about $500 on liability insurance every year.

Who is the target market?

While these shops draw a variety of customers, they attract middle-aged and older women in the largest numbers. Proprietors often talk about meeting shoppers who feel nostalgic. Chain Store Age reports that seniors set aside the most money for holiday gifts while young Americans buy the least.

How does a Holiday Store Business make money?

Basically, a shop buys goods in bulk and resells them individually at higher prices. You can charge the highest amounts and sell the most items during the weeks before major holidays. However, this isn’t the only lucrative time of year. According to the Chicago Tribune, around two out of five Americans start their Christmas shopping in October or earlier.

How much can you charge customers?

Sellers of holiday and party products face rising competition. You’ll have to compete with department, discount, and drug stores in the months before each major celebration. Fortunately, holiday shops tend to have better selections. They typically charge more than general merchandise stores. Prices differ based on each product’s brand, quality, and features. As numerous stores begin clearance sales after a holiday, the value of merchandise drops rapidly.

How much profit can a Holiday Store Business make?

These shops are usually small private companies that don’t release detailed financial data. The Tinseltown Christmas Emporium in Ontario has eight employees and reports annual revenue of $1 million, but it doesn’t disclose expenses. Nonetheless, this is clearly a lucrative business for proprietors who control expenses and consistently attract customers. The products have higher profit margins than many retail items, such as groceries and office supplies.

How can you make your business more profitable?

You could expand shelf or storage space so that you can buy goods in greater quantities at lower per-unit prices. More room also allows you to keep non-perishable items until next year — you won’t have to sell them in clearance sales after the holidays.

• Ensure that all products remain easy for customers to see and reach.

• Batteries have high margins; offer them if you carry any electronics.

• Sell convenient beverages such as coffee, soda, and bottled water.

Day-to-Day and Growth

What happens during a typical day at a Holiday Store Business?

After you arrive in the morning, you’ll need to boot up the point-of-sale system, turn on lights, and put out the “open” flag. Some tasks become easier when the shop is closed or has few customers. They include stocking shelves, inspecting equipment, cleaning, reordering merchandise, applying price stickers, and handling any online orders. If the store becomes busy, you’ll probably have to focus on answering questions and processing sales.

What are some skills and experiences that will help you build a successful Holiday Store Business?

Any type of customer service experience could help you succeed. However, a cashier job probably won’t prepare you for complex management responsibilities. Edx.org offers a free four-week Retail Fundamentals course with lessons on these tasks. It tells students how to manage inventory, price merchandise, and decide what products to order.

What is the growth potential for a Holiday Store Business?

Your shop could grow by moving to a larger location or opening additional stores. For example, the well-known chain Christmas Tree Shops began as a small holiday retailer in Massachusetts and now has 80+ locations. Another option is to expand by selling online or publishing a catalog. You can also create a franchise like Everything Christmas.

What are some insider tips for jump starting a Holiday Store Business?

Find ways to cut costs and boost revenue during the months with few holidays, such as May and August. You can generate steadier income by introducing a subscription box or membership with a monthly fee. Members could receive discounts, additional services, and extra time for returns. An alternative is to publicize lesser-known occasions like National Hot Tea Day as a way to sell leftover tea or kettles). Slow months also provide opportunities to perform building repairs and install new equipment.

When you decide to buy or rent a point of sale (POS) system, keep in mind that renting results in a lower upfront cost and lets you upgrade more easily. On the other hand, buying reduces the total long-term expense. It also eliminates rental restrictions and requirements. Buying might make sense if your store becomes profitable and appears likely to stay in business for years to come.

Remember to order merchandise long before each holiday. Every year, stores stock their shelves with seasonal goods earlier than before. Items could become unavailable or arrive late if you wait too long. Try to carry products that people use for multiple celebrations or purposes. For instance, candles come in handy throughout the year, and shoppers might be interested in Mardi Gras items or Halloween merchandise.

After-holiday returns take time and put a big dent in profits. You can reduce them by avoiding low-quality or overly complicated merchandise. Clearly state a time limit on returns, and suggest product exchanges if possible. Many shoppers will choose to keep items when offered partial refunds, according to a PYMNTS survey.

Part 2 - Is a Holiday Store business the right fit for you?

Part 3 - Action plan to launch your Holiday Store business in 90 days