How to Start a Holiday Store Business

Start a Holiday Store Business by following these 10 steps:

1. Plan your Holiday Store Business
2. Form your Holiday Store Business into a Legal Entity
3. Register your Holiday Store Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Holiday Store Business
6. Get the Necessary Permits & Licenses for your Holiday Store Business
7. Get Holiday Store Business Insurance
8. Define your Holiday Store Business Brand
9. Create your Holiday Store Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

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

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.

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.

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.

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

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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.

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.