Start an office supply store by following these 9 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 step guide to starting your office supply store. 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 an office supply store?
Office supply stores do have a high amount of overhead. Not only will you need to purchase all products first, but also rent a space, buy POS devices, and buy advertising to get started. Depending on where you choose to open, you’ll likely need at least $20,000 to $50,000 to even get started. Franchising opportunities are available, but they are fairly limited. You can reduce your costs significantly should you choose to be the sole operator of the office supply store, and only operate online. In this case, you can get started with just the cost of the software (likely around a few thousand dollars), because you’ll be selling wholesale products at a profit only after they’ve been purchased.
What are the ongoing expenses for an office supply store?
Owners should budget in the following expenses for their office supply store:
- Stocking wholesale products
- Paying salaries
- Rent/licensing costs
- Advertising costs
- Building maintenance costs
- Market research
Who is the target market?
The best customers are those with steady office supply needs who know the staff as well as the staff knows them. There will always be a need for supplies as companies expand their services or employee base. You don't necessarily need to target the big-name companies, but you should plan around your ideal target base. Should you choose to offer high-end, top-of-the-line equipment, you’ll need to ensure your customers are willing to pay the premium for your selection.
How does an office supply store make money?
Supply stores make money by purchasing goods at wholesale prices, and then selling those items for a profit. This can be done either in a brick-and-mortar establishment or through an online store.
How much can you charge customers?
When it comes to the profit margins of office supplies, they tend to be fairly low. Some may only be for a few pennies higher than the wholesale costs, up to a dollar or two at the most. You can charge more for in-demand equipment though. The money made in this business will be mainly based on high volume sales.
How much profit can an office supply store make?
As mentioned, profit is made by volume of sales. At an average profit of $.75 an item, owners can make $3,000 a month if you sell 4,000 items.
How can you make your business more profitable?
The best way to make your business more profitable is to add more demographics as time goes by. You may want to have an entire section devoted to stationary and calligraphy supplies, or design a ‘fun’ section of the store that appeals to young students who want to be organized. If you sell online, consider adding a deal a day section that singles out one incredible product at an equally incredible discount.
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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your office supply store 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 an office supply store. 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
An office supply store is generally run out of a storefront. 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 an office supply store.
- 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 office supply store 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 an office supply store
You’re trying to appeal to people who want to get more done with less time. Decide if you want to target a certain demographic (e.g., young and hungry entrepreneurs, established businessmen, etc.), and then work on getting out the message. For example, you may want to point out that the printers and copiers you provide allow users to get more advertising power with less effort and money. Promote yourself as a business that's only successful if your customers are successful.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Online advertising will likely be your best bet whether you sell online or not. Advertise your best products, and call attention to what makes your business difference. You may even want to go door-to-door so people can see the quality of your supplies.Whether it’s knowledgeable employees, friendly attitudes, or innovative solutions and office packages, you’ll retain customers once you have a solid branding strategy.
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 An Office Supply Store In Your State
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 business is good for someone who can get in the head of a busy entrepreneur. Start-up companies and established conglomerates alike need a store they can rely on, whether their needs are large or small. Owners should also be organized, and have some experience with how most offices function.
What happens during a typical day at an office supply store?
Office supply store owners should be familiar with the following action items:
- Finding suppliers
- Networking with distributors
- Ordering and restocking products
- Researching new office equipment
- Hiring and scheduling employees
- Developing relationships with local businesses
What are some skills and experiences that will help you build a successful office supply store?
Understanding people will be a huge plus, but so will understanding how offices get bigger and better. Advertising will have to rely on convincing people that the adage of spending money to make money is unquestionably true. Owners should also be organized enough to hire and coordinate a staff, and have a knack for determining which new products will prove to be big money-makers before they’re popular. For example, one major concern plaguing office workers today is how much time is spent sitting. They're looking for innovative equipment that will mitigate the effects of immobility.
What is the growth potential for an office supply store?
Growth potential can be high for those who understand the trajectory of the market. Major stores like Staples and Office Depot relied for years on the big box design, only to be surprised when sales dropped due to online purchases. However, the constant need for office supplies (and the increase of new start-ups every year) essentially guarantees that the demand will always be high.
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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.
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:
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 an office supply store?
It may take some time be ready for your business to become profitable as you're working in a saturated market right now. If you’re planning to operate in a small town with a strong business economy, you should consider opening a regular storefront. You can do delivery options for your long-term clients who order in bulk. However, if you’re planning to operate in a city where rents are high and loyalty is low, you should consider selling online.
Should you choose to sell online, plan to invest in your software. Choosing the wrong type of shopping cart can open you up to hackers, or it may just annoy your customers if it's not user friendly. If you have a storefront, highlight what makes your business different, and why it makes more business sense to purchase supplies that you can see, touch, and use rather than taking a chance online.
How and when to build a team
If you have a very small store to start or you begin online, you won’t need to build a team. Should you aim for something bigger, look for those have experience with office equipment that can fill in the knowledge gaps you may have. For example, you may have a good eye for understanding the supplies, but perhaps you need help with your organization skills.