LHS Owners: What did it take?

[Guest Muck]

Just curious how much capital it took to get your store up and running. If I were an entrepreneur how difficult would it be to get one functional? Purely for conversational purposes.

[analog999 0]

LHS owners will probably not tell you...

I imagine startup costs would be between $100k and $200k depending on how much equipment you are going to stock your store with. Then you have fixtures, cash register/POS, etc. It may or may not be that some of the vendors will let you floor their inventory, meaning you don't have to come up with the cash from the get go, but usually that is on big ticket items (my grandparents used to run an appliance/furniture store).

[jimmy 194]

Capital is one thing, cash flow is another. It's all about cash flow. When you consider all monthly recurring expenses, it's not cheap to run a store. Here's an example:

- Rent: $10 per square foot for retail space, more for prime space.

-Insurance, on stock and liability

-Security monitoring

-Water

-electric

-heat

-cooling

-telephone lines (2-3)

-credit card processing fees (these are huge)

-Phone book listing in all surrounding cities $130 per book per yr, Yellow Pages, Talking phone book, Yellow book, you have to be in all of them.

-High speed Internet access

-web page hosting (optional)

- advertising, newspaper, radio, hockey magazines, business cards, flyers

- donations...all the orgs want them!

- Office supplies, paper, ink, pens, trash bags, toilet paper, etc, etc

- repairs, light bulbs, carpet cleaning.

- employee salaries, unemployment, social security.

- auto expenses

- shipping and mail expenses

- monthly interest payments on business loans and lines of credit. Usually 9%.

- loan payments

- accountant fees

- landscaping and snow plowing

- trash removal

- bank acct fees (not free like personal accts)

- cable TV

-

Ok, so we have all the above bills each month and we don't even have anything in the store yet. Now, let's do a generic start up costs, not including actual hockey equipment inventory:

- Rent, 1st, last and security deposit

- Storefront sign

- Roadside sign

- Fixtures to hold equipment

- Reception area fixtures

- glass display cases

- Computer and printer

- Point of sale System (Inventory software, cash register, bar scanners, receipt printers, label printers

- credit card machines

- telephones

- fax machine

- chairs

- Rug vacuum

- fitting tooks like Brannocks, etc

- Fitting bench

- Skate sharpening machines (3 head minimum)

- Dust collection system

- Work benches

- rivit machine

- Skate Oven

- Boot Stretcher

- Boot puncher

- Hand tools, drills, bits, knives, wrenches, screwdrivers and more

- stockroom shelving

- Alarm installation

- phone installation

- internet installation

- cable installation

- gas and electric turn on fees and deposits

- city permits

- state permits

- Trade Name fees

- Incorporation fees

- Lawyer fees

- Bank fees (like checks)

- open/closed neon signs and indoor signage

- wastebarrels, paper schreders, brooms, cleaning supplies.

OK, we have all that, now we can buy inventory. Of course, amount depends on size of store and your goals among other things. But to put things in perspective, let just look at the capital needed to stock just ONE individual composite stick: I'm talking just getting one of each configuration. Let's see, left and rights, 5 different flex combos and 7 different blade patterns. That's 70 sticks, one of each. Assuming the stick costs $100, that's $7000 needed just to have one each of one model stick. Most manufacturers have 3-4 models of ops, so you are looking at $30,000 just to get a line in, and that was 1 of each combination. Some manufacturers make you buy a minimum of 6. I guess you see the point, you need a lot of capital, especially if you want a good variety. In they hypothetical example I used, we spent $30k just stocking 4 models of OPS. And we wonder why when we go into our LHS, they don't have the one you are looking for. Shall me move onto stocking skates...... you get the picture. :) Many entrepreneurs have to take big loans, second mortgages, and use life savings to get a store going. Now we go back to cash flow. When you open, it takes quite a while for the profits to start coming in. You have little profits but lots of bills. So when Joe Shifty comes into your store, tries on your shin pads, gloves, and has you size him for skates. Then leaves and buys everything online to save a few dollars, you make no money. Soon you have no money to pay all those monthly bills, then you go out of business.

for entertainment purposes only. :o

[Guest Muck]

Wow, if that doesn't put several things into perspective I don't know what would. Makes you really want to support your LHS.

[tuzzifan44 0]

thats was very in depth jimmy, owning your own buisness is much harder than it sounds.

[supermanly 0]

Capital is one thing, cash flow is another. It's all about cash flow. When you consider all monthly recurring expenses, it's not cheap to run a store. Here's an example:

- Rent: $10 per square foot for retail space, more for prime space.

-Insurance, on stock and liability

-Security monitoring

-Water

-electric

-heat

-cooling

-telephone lines (2-3)

-credit card processing fees (these are huge)

-Phone book listing in all surrounding cities $130 per book per yr, Yellow Pages, Talking phone book, Yellow book, you have to be in all of them.

-High speed Internet access

-web page hosting (optional)

- advertising, newspaper, radio, hockey magazines, business cards, flyers

- donations...all the orgs want them!

- Office supplies, paper, ink, pens, trash bags, toilet paper, etc, etc

- repairs, light bulbs, carpet cleaning.

- employee salaries, unemployment, social security.

- auto expenses

- shipping and mail expenses

- monthly interest payments on business loans and lines of credit. Usually 9%.

- loan payments

- accountant fees

- landscaping and snow plowing

- trash removal

- bank acct fees (not free like personal accts)

- cable TV

-

Ok, so we have all the above bills each month and we don't even have anything in the store yet. Now, let's do a generic start up costs, not including actual hockey equipment inventory:

- Rent, 1st, last and security deposit

- Storefront sign

- Roadside sign

- Fixtures to hold equipment

- Reception area fixtures

- glass display cases

- Computer and printer

- Point of sale System (Inventory software, cash register, bar scanners, receipt printers, label printers

- credit card machines

- telephones

- fax machine

- chairs

- Rug vacuum

- fitting tooks like Brannocks, etc

- Fitting bench

- Skate sharpening machines (3 head minimum)

- Dust collection system

- Work benches

- rivit machine

- Skate Oven

- Boot Stretcher

- Boot puncher

- Hand tools, drills, bits, knives, wrenches, screwdrivers and more

- stockroom shelving

- Alarm installation

- phone installation

- internet installation

- cable installation

- gas and electric turn on fees and deposits

- city permits

- state permits

- Trade Name fees

- Incorporation fees

- Lawyer fees

- Bank fees (like checks)

- open/closed neon signs and indoor signage

- wastebarrels, paper schreders, brooms, cleaning supplies.

OK, we have all that, now we can buy inventory. Of course, amount depends on size of store and your goals among other things. But to put things in perspective, let just look at the capital needed to stock just ONE individual composite stick: I'm talking just getting one of each configuration. Let's see, left and rights, 5 different flex combos and 7 different blade patterns. That's 70 sticks, one of each. Assuming the stick costs $100, that's $7000 needed just to have one each of one model stick. Most manufacturers have 3-4 models of ops, so you are looking at $30,000 just to get a line in, and that was 1 of each combination. Some manufacturers make you buy a minimum of 6. I guess you see the point, you need a lot of capital, especially if you want a good variety. In they hypothetical example I used, we spent $30k just stocking 4 models of OPS. And we wonder why when we go into our LHS, they don't have the one you are looking for. Shall me move onto stocking skates...... you get the picture. :) Many entrepreneurs have to take big loans, second mortgages, and use life savings to get a store going. Now we go back to cash flow. When you open, it takes quite a while for the profits to start coming in. You have little profits but lots of bills. So when Joe Shifty comes into your store, tries on your shin pads, gloves, and has you size him for skates. Then leaves and buys everything online to save a few dollars, you make no money. Soon you have no money to pay all those monthly bills, then you go out of business.

for entertainment purposes only. :o

yea lol, put this on any thread that talks about buying on the net or people who complain about LHS's. this was fun to quote cause of how much stuff too.

[prenny207 1]

i have been saying it since this site started... support you LHS or you won't have one to go to. that means nowhere to get your skates sharpened, let alone pick up new equipment. and to the people that go into the LHS and get fitted and then buy online... SHAME ON YOU!!! and it happens all to often. if nothing else, you may start seeing stores charging a fitting price, then if you buy, it's put towards the purchase. some of you may get pissed about that, but you are taking the employees time, which means the owners money, so you can then go buy it online for $10 less then the store.

[Chadd 916]

One problem is if sales are down at all, people will generally not want to lose money again and will order a little less. That means they get less of a discount on their order and either make less money or the price goes up. Customers see that and get offended and go elsewhere. It's a vicious cycle and the lockout really hurt most shops. That year is also reflected in reduced number of new hockey players registered and that will be felt for the next decade.

[sogaduch 0]

when my dad first opened up shop he started in a small litlle hockey arena back in the 70's. it took him quite alot of years and alot of hours to get to where hes gotten