Start a vintage toy 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 vintage toy 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 a vintage toy store?
You can potentially start this business for about $42,000 dollars. This assumes about $5,000 to pay the security deposit, utilities deposit, and first month's rent on a lease, though business lease prices in your area will vary. It may cost up to $8,000 to improve the location, including customizing the space, obtaining necessary store fixtures, and hiring a handyman as need be. The amount of stock you buy at the beginning may vary based on the space you have, but it is good to allocate $10,000 to start with a good variety of toys. Allocate about $2,000 for operating expenses, including liability insurance, association fees, and online accounting software payments. You should allocate about $6,000 for various technology costs, including having a professional website designed and hosted, installing telephone and internet, the purchase of a new computer, the purchase of any special POS software needed, and the services of an IT consultant. Allocate about $9,000 for marketing, which includes the design of a logo, production of signage, creation of large signs, and the purchase of various business cards, fliers, and coupons. Finally, you may want to allocate about $2,000 for a grand opening event, which includes catering, special signage, and special advertising.
What are the ongoing expenses for a vintage toy store?
Your ongoing expenses primarily include rent, utilities, buying merchandise, and paying employees. Using our numbers from previously, your rent and utilities each month would be about $2,177. The cost of buying new products will vary (some months, you will buy more than others), but this will typically be $1,000 or less (especially since much of what you find will be very low-price items from garage sales). How much you pay your employees is up to you, as is how many employees you hire: a team of four people that work twenty-five hours a week for ten dollars an hour, for instance, will cost $1,000 a month.
Who is the target market?
While there are collectors of all stripes, some of your best clients will be men in their 30's. This is because properties from the 80's and 90's are currently experiencing a renaissance of remakes (such as Transformers, Power Rangers, Star Wars, and so on), and this demographic is the perfect age to feel nostalgic about such properties.
How does a vintage toy store make money?
A vintage toy store makes money by selling customers older toys and collectibles.
How much can you charge customers?
The exact price of your vintage toys will vary greatly. You may sell an old, opened action figure for five dollars, but you may sell rare video games and game systems for hundreds of dollars. This is why it is important to know the market value of what you are selling.
How much profit can a vintage toy store make?
The exact profit of a vintage toy store can vary greatly. As an industry, hobby and game stores experience a 41.3% gross profit margin on average. As a vintage store, you may have an even greater margin because your model involves buying toys for a very cheap price and then upselling them accordingly.
How can you make your business more profitable?
When you acquire really rare items, consider selling them online via eBay. While fees for eBay and Paypal will cut into your profit, a bidding war can help you net a solid pay day. Consider branching out and selling certain modern hobby supplies such as Magic: The Gathering cards. These are regular hot sellers and give you an opportunity to host local tournaments that bring more customers to your store. Finally, consider letting local collectors sell their items through your ship via a consignment model: this gives you more things to sell while also helping you network with fellow collectors.
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 vintage toy 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, and it's easy enough to form by yourself, or check out the top business formation services.
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 vintage toy 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:
- 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 vintage toy store business 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 a vintage toy store 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 vintage toy store 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 vintage toy store
As mentioned above, be sure to use traditional advertising such as fliers, coupons, and business cards. Money permitting, you may consider advertising via your local newspaper and radio as well. However, be sure your website is up to date and that you promote your store and services via social media, which is a great way to increase brand awareness and your own accessibility. Don't be afraid to employ classic retail tricks such as coupons, special sales days, and other events designed to generate word-of-mouth and get customers in the store.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
If your local area has any “Comicon” style conventions, rent a booth and sell some of your items there: many of the visitors will be your ideal customers, and it's a great way to build awareness of your store.Be sure to ask existing customers to enroll in an email mailing list, which lets you keep your store on their minds and make them aware of new developments they may be interested in. Finally, if you have the space, consider holding various special events such as screening retro movies, holding retro video game tournaments, and so on. This helps situate your business as one that brings your community together.
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 Vintage Toy 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 perfect for someone who is already a collector of vintage toys. Such a person should have extensive skills in finding and re-selling toys from sources such as thrift shops and eBay. The ultimate goal is to find toys at the lowest prices possible and sell them at rates that net you a profit but do not driver customers away.
What happens during a typical day at a vintage toy store?
In terms of finding toys, you may spend a lot of time visiting area thrift shops and garage sales as well as browsing for deals online. Regarding your store, you will spend time receiving deliveries, stocking shelves, and making everything look clean and presentable. Some type should be allocated to working on your traditional advertising as well as online advertising. Finally, time will be spent helping customers find the items they are looking for.
What are some skills and experiences that will help you build a successful vintage toy store?
As mentioned above, having prior skills in finding good deals on rare toys and re-selling them is highly important. It is also important to know the value of these items, which you can learn by studying the market each week or consulting professional guides to toy values. Finally, having an interest in a diverse array of retro toys and collectibles can allow you to have more options for clients (such as selling video games in addition to toys).
What is the growth potential for a vintage toy store?
The growth potential for this business is modest. As an industry, toy stores have experienced a steady decline in the last decade that can primarily be attributed to the rise of online ordering through venues such as Amazon. However, most of the businesses affected are “big box” toy stores of major chains, and there is a lot of room for smaller, niche stores to thrive within your community.
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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 a vintage toy store?
Don't be afraid to have an online component: sell some of your stock through your website, and consider selling through Facebook and advertising on craigslist as a way of increasing your brand awareness. Capitalize on pop culture trends whenever possible: make sure you have a lot of retro Transformers toys when another Transformers movie comes out, for example, as people are likelier to buy. Finally, consider using some of the rare items from your existing collection to help you get things started while keeping costs down.
How and when to build a team
You will likely want to build a small team right away unless your venue is very small. This means that you can keep your store open longer and more often without giving up on sleep. During busy times, it also ensures that at least one person can stay behind the register while another person helps customers on the sales floor.