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 A hardware store typically sells hand and power tools, building materials, fasteners, keys, locks, hinges, chains,electrical supplies, plumbing supplies, cleaning products, housewares, utensils, and paint. They’re designed for DIY consumers and handymen (as well as tradesmen) who need a place to source supplies for projects.

  Who is this business right for? This type of business is usually attractive to handymen, tradesmen, and those who enjoy home improvement activities. The owner should be able to advise customers on purchases and have experience with the products being sold in the store.  Long hours aren’t always necessary, but weekends might be. Having a flexible schedule helps, especially during the first few years of operation.  

What happens during a typical day at a hardware store? Day-to-day activities include meeting with customers on the floor and helping them source materials for their DIY projects. Checking inventory, making purchases from suppliers, and managing staff are also essential aspects of the job.  What is the target market? The business makes money by charging customers for tools and supplies. Usually the price is a fixed price for the item. In the case of items like rope or chain, the store may sell an item by the foot or priced by the yard.  

Most customers pay by credit or cash. It’s important to offer customers a variety of ways to pay you as some volume customers may require credit terms in order to do business with you. Volume orders/clients also allow you to include finance charges or terms in your purchase price. It’s not uncommon for a hardware store to offer terms of 30 days to 60 days for a well-established client. However, these terms can be extended with or without interest. Most customers expect 30 days no interest.  You can establish a policy of charging interest after 30 days to collect more money from customers who need more time to pay.  

How does a hardware store make money? Ideal customers are usually DIY customers or handymen. However, a hardware store can set up trade accounts with local tradesmen to earn consistent business. For example, a store might contract with a professional carpenter to offer supplies for his business on an ongoing basis.  Clients are typically local. Advertising for a hardware store can be done one of several ways, including billboards, Yellow Page ads, pay-per-click local online ads, fliers, and email marketing to an existing customer list.  Email marketing is an underutilized strategy in this industry because most hardware stores rely on word of mouth and foot traffic. However, by emailing your existing customers on a regular basis, you can generate significantly higher revenues than relying on people randomly coming into your store when they need something.  A targeted email campaign would also allow you to better predict revenue and profit. Offer sales around holidays, for example, when business is typically slow. Entice customers with value, not discounts. Show them your own personality. Don’t make the mistake of running a discount-driven business as this only cultivates fairweather customers.

  What is the growth potential for a hardware store? Hardware stores can be run as a small family-run or local shop or as a chain store. For example, Lowes, Home Depot, and other similar stores are large chain stores that operate all over the U.S. A small “mom and pop shop” may only have one location. 

 GETTING STARTED What are some skills and experiences that will help you build a successful hardware store? Running a hardware store requires a strong business sense, but no specific degree or licensing other than local business or state licensing, if required in your state. Most hardware store owners, however, do have experience working for a hardware store, are former construction workers, contractors, handymen, or tradesmen.

  What are the costs involved in opening a hardware store? A small hardware store can be started for less than php. 700,000. Costs include rent for the building, start-up inventory, display setup, and cash reserve for staffing and labor costs. You’ll also want insurance.  Start-up inventory will likely run between 560,000 and 1,322,221. Rent, insurance, and other related costs will vary depending on your locale.  In general, you should not spend more than 20% to 30% of your total revenue on rent. Insurance should cover liability as well as loss of your inventory. Premiums for that insurance should make up no more than 5% to 10% of the total value of your business.  

What are the steps to start a hardware store? Once you're ready to start your hardware store, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:  Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even. Form a legal entity. Establishing a legal business

  How to promote & market a hardware store Getting new customers usually involves networking with existing contacts and spreading the word through local advertising. A hardware store is highly dependent on local business from the community. So, partnering with other businesses and advertising your hardware store might help spread the word faster. For example, ask local restaurants, and other retail stores, if you can advertise in their store in exchange for a discount on products in your store.  Not only does this build goodwill in your local community, the advertising can be positioned more as a referral from the existing local business rather than paid advertising in a neutral medium, like radio or television. 

  Recommended: Get started with local advertising for your business with a $300 credit from Yelp.  How to keep customers coming back Specialization and company culture are the best ways to differentiate yourself from the competition. Another way to stand out in the crowd is to set up a website, capture the names and email addresses of your customers, and send them daily DIY tips. These tips can (and probably should) come from your own personal experiences. They don’t have to be long emails, but something to keep you in the forefront of your customer’s minds so that when they need something you sell, they think of you first.  

How and when to build a team Unless you are confident in your abilities to run a one-person shop, you’ll probably have to open your business with a small staff of at least 3 people. Ideally, you’ll want a person who can man the floor and help customers, someone to do bookkeeping, and a manager.  LEGAL CONSIDERATIONS State & Local Business Licensing Requirements In most states, it is necessary to obtain a Hardware Store license. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. 

 How much can you charge customers? Hardware stores charge per inventory item. As such, there is no set price for all items in the store. When figuring out how much you should sell your items for, check your local competition or give yourself a gross margin on COGS of at least 40% (which is the industry average).  What are the ongoing expenses for a hardware store? Ongoing expenses for this type of business include supplies, rent, utilities, and insurance. All of these costs will vary significantly depending on your location. 

 How much profit can a hardware store make? Typical operating profit is between 25%-300%  with a net profit before taxes of between 25%and 40%.  

How can you make your business more profitable? Making the business more profitable would involve supplementing your main source of income with other related services. For example, if you sell carpeting or tools and supplies for carpeting, you might partner with a local carpenter and offer installation services. You could do the same for window, door, roofing, or other major project.  Another way to make the business more profitable is to offer related products like planting or gardening supplies, which can be a supplemental source of revenue to your main product lines. 

This is a long form text area designed for your content that you can fill up with as many words as your heart desires. You can write articles, long mission statements, company policies, executive profiles, company awards/distinctions, office locations, shareholder reports, whitepapers, media mentions and other pieces of content that don’t fit into a shorter, more succinct space.

Articles – Good topics for articles include anything related to your company – recent changes to operations, the latest company softball game – or the industry you’re in. General business trends (think national and even international) are great article fodder, too.

Mission statements – You can tell a lot about a company by its mission statement. Don’t have one? Now might be a good time to create one and post it here. A good mission statement tells you what drives a company to do what it does.

Company policies – Are there company policies that are particularly important to your business? Perhaps your unlimited paternity/maternity leave policy has endeared you to employees across the company. This is a good place to talk about that.

Executive profiles – A company is only as strong as its executive leadership. This is a good place to show off who’s occupying the corner offices. Write a nice bio about each executive that includes what they do, how long they’ve been at it, and what got them to where they are.