How to Start a Kitchen and Bath Store

Start a kitchen and bath store by following these 10 steps:

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

We have put together this simple guide to starting your kitchen and bath store. 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 kitchen and bath store?

Retail stores may cost up to $50,000 to open, depending on your location and chosen stock of inventory. You’ll need to account for not only the cost of the mortgage/lease and products, but also staff salaries, liability insurance, and technology (e.g., cash registers, payment processors, etc.)

What are the ongoing expenses for a kitchen and bath store?

Owners will need to factor in the following expenses

• Raw cost of new products
• Mortgage/lease of store
• Liability insurance
• Staff salaries
• Upkeep/maintenance

Who is the target market?

The target market can be anyone with a kitchen and bathroom they need to stock. While big chain stores and websites may have much of the market cornered, there are still ways for independent stores to reach different segments of the population.

How does a kitchen and bath store make money?

Kitchen and bath stores make money by charging a markup on most or all of their products. Owners may sometimes use loss-leading products to attract people into their stores. Once they're in, they have an opportunity to discover higher ticket products that will bring more profit to the owner.

How much can you charge customers?

Home chefs and decorators are willing to spend big for the most coveted of cooking tools or latest bamboo bathroom caddy. A five-piece set of soap and lotion containers can cost as much as $80 or more. High-end pots and pans can cost well over $1,000 for a 10-piece set.

How much profit can a kitchen and bath store make?

The average profit of a Bed Bath & Beyond is around 35%, but profit percentages will vary greatly based on what you sell and how you sell it. If you can’t check the prices of your direct competitors because you’re selling something truly unique, base your prices on the materials of the product, skill it took to make, and current demand.

How can you make your business more profitable?

Consider selling interior decorating services in conjunction with your products. Offering interior decorating services not only helps bewildered homeowners plan the look and functionality of their home, it can also promote a variety of stock to those who could use it the most.

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 kitchen and bath store 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.

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 business is perfect for someone who understands the true functionality of a kitchen and bathroom. Far from just being a place to cook dinner or take a shower, these rooms can ultimately define the tone of a home. In fact, new home buyers or apartment renters are more influenced by the appearance and amenities of the kitchen and bathroom than any other feature of the home.

What happens during a typical day at a kitchen and bath store?

Most days will be spent selling supplies, stocking new inventory, and analyzing sale patterns and traffic. Owners may also need to train and manage their employees, handle customer conflicts or emergencies, or devise a strategy to best promote their business.

What are some skills and experiences that will help you build a successful kitchen and bath store?

It’s going to take someone with a lot of innate business savvy to open a kitchen and bath store. Having some experience working in the industry plus an MBA or general business degree is a great place to start.

What is the growth potential for a kitchen and bath store?

Big box stores, such as Wal-Mart and Target, have made it much more difficult for smaller businesses to penetrate this particular market. To make matters more complicated, owners are also competing with online shopping behemoths like Amazon. However, a business that taps into the different needs of a community or population can still stand to grow. For example, selling goods at near wholesale prices or offering unique, custom pieces for wealthy customers can be a successful strategy.