You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your flea market. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a flea market?
The cost of starting a flea market can range from a few hundred dollars for just licensing and permits to tens or even hundreds of thousands of dollars for a permanent indoor market.
Most new flea market owners begin by renting vacant land or a parking lot by the day or hour. Depending on the size and location rents range in price from less than a hundred dollars to thousands. Schools gymnasiums are also usually available on the weekends and when school is not in session for an inexpensive fee. No matter the location, it needs to be legal to hold a flea market on the property.
Flea markets often provide or rent tables and tents to vendors. Owners who want to offer these amenities can either purchase them outright if they have the budget and space to store them or contract with an outside rental business.
Permits for flea markets frequently require access to restrooms, particularly if food is available. This means you must provide porta potties if there are no permanent facilities. A single porta potty can run $300 to rent for a weekend.
What are the ongoing expenses for a flea market?
Most of the expenses for a flea market business are ongoing unless the operator owns the location, tents, and tables. Nevertheless, the cost of labor, marketing, and promotion are ongoing.
Who is the target market?
Since there are so many kinds of flea markets, there is no ideal customer across the board. Many older customers are interested in antiques and nostalgic items from their childhoods while younger shoppers are looking for vintage and off-beat items. The one characteristic common among all customers at a flea market is that they are looking for a deal.
How does a flea market make money?
The owner of a flea market can make money in a few ways. Almost every flea market charges vendors rent to set up and sell at the event. Besides collecting rent, some flea markets charge customers an admission charge and require a payment for parking on the site.
How much can you charge customers?
Flea markets charge vendors between $3 and $10 dollars per square foot per day. That means a single 10 X 10 space will cost between $300 - $1000 dollars daily. Exclusive flea markets can charge customers $5 or more for admission and reserved parking can cost $10.
How much profit can a flea market make?
Since owners know their operational costs, it is easy to plan for a healthy profit margin by adjusting vendor rents. Another great aspect of the flea market business is operators who do not have long-term leases can change locations if the first one doesn't work out.
How can you make your business more profitable?
Adding rides and games to a flea market is an easy way to increase profits and attract more customers. Holding drive-in movies after the flea market closes for the evening is another great revenue source.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your flea market is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a flea market business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A flea market business is generally run out of a large piece of land. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a flea market business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your flea market business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a flea market
Offering heavily discounted rents for vendors is a good way to convince vendors to take the chance on a new flea market. Once vendors commit to selling, it is easier to promote the flea market to customers online and through local media. Adding a special event to a flea market, like a concert or a contest is a great way to get people to come out for the day.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Quality still matters. Operators should maintain high standards for vendors. Once a flea market gets a reputation for selling junk, it is hard to attract business. Owners should focus on providing great service and building trust between the vendors, the customers, and the owners.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Flea Market In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
People able to operate flea markets successfully usually have experience as flea market or craft show vendors or have extensive retail management experience. While most flea markets are only open for a few days per week, owners of a large flea market need to be able to devote enough time to operating the business, at least during the months the market is running.
What happens during a typical day at a flea market?
Running a flea market is more complex than owning a strip mall or renting out other retail spaces because of the temporary nature of the business. At the start of each new season, the owner needs to go through the process of hiring, training, and overseeing numerous part-time employees. Owners will also need to apply for relevant permits and meet the ever-changing regulations. Marketing requires a good portion of the owner's time.
What are some skills and experiences that will help you build a successful flea market?
Promotion and marketing are two skills which are invaluable when overcoming the obstacle of creating a two-sided market made up of vendors and buyers. It is difficult to convince vendors to pay to sell items when they don't know if anyone will show up to buy. It is hard to pull buyers away from established markets to shop at a brand new one.
Owners of flea markets who have an established relationship with the local government may have an easier time getting the permits and other licenses necessary to start their new venture.
What is the growth potential for a flea market?
The popularity of swap meets and flea markets continue to grow, but the problem is there is only a certain number of vendors and shoppers within in driving distance. When multiple flea markets operate close to one another, the profitability of all of the flea markets in the area decreases.
But there is good news. There are still opportunities to make money by opening a flea market in an under-served area or by specializing in marketings catering to a particular niche. What works in one area will not work in another, so it is critical to research before opening. Organizers of even well-established flea markets, like the Brooklyn Flea, have had to look to new and different concepts to find success.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a flea market?
Potential flea market owners need to learn as much as they can about their future competition which already exists in the area. Starting small allows new flea market owners to test both the local area and the market's niche before spending too much money on a concept or location which will never work.
How and when to build a team
A good team is an important part of building a successful flea market business straight from the start. Older people and college students are great employees because they will work a few of days a week to earn extra spending money.