How to Start a Holiday Store Business

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.

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Learn how to start your own Holiday Store Business and whether it is the right fit for you.


Start a Holiday Store Business by following these 10 steps:

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 guide to starting your Holiday Store Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Check out our How to Start a Business page.

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:

Luckily we have done a lot of this research for you.

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.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. 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.

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STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Holiday Store Business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

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!

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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?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

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.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

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Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!

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 holiday store 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:

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

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.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

How to promote & market a Holiday Store Business

Spend the majority of your advertising budget near major holidays. During this time, your business has the greatest potential to attract customers and produce a decent return on marketing investments. Don't forget to emphasize how your shop differs from conventional stores. Like other retailers, this business may use sales and coupons to create a sense of urgency. You can also employ free promotional techniques, such as posting some interesting holiday trivia on social media.

How to keep customers coming back

Achieve a competitive advantage by selling local or hard-to-find merchandise in a store with a charming atmosphere. When people visit the shop, they should enjoy a pleasant experience that revives the holiday spirit at any time of year. To keep existing patrons, create a loyalty program. You could reward repeat customers with store credits that expire relatively soon; this encourages people to return before the expiration date.

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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

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Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.

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Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.

Start A Holiday Store Business In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

This opportunity may appeal to someone who feels enthusiastic about holidays and looks forward to them. Successful proprietors are approachable and easily get along with different kinds of people. You also need a willingness to stand and walk for several hours each day.

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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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.

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Take the Next Step

Find a business mentor

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.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

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.

Next Steps

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