As a potential new music shop owner, you have many questions about what you need to start. This article will cover the common topics that can help you figure you how to start a music store. Below are the steps to remember when setting up your music shop.
The starting point of any successful business is a reliable income stream. To determine whether your music shop business idea is viable, you must calculate its potential costs. Suppose your business has considerable expenses compared to the income you project. These are problems you need to find solutions for. Below are a few business expenses you will want to consider when deciding how to start a music shop:
Suppose you plan on building, buying, renting, or leasing a commercial property space to sell products. In that case, you will want to determine how much your building expenses will cost. The cost to rent or purchase a commercial building will depend on your area and the building size you think you need. For example, a well-off neighborhood in a major city may go for $35 per square foot, while less ideal areas may go for $10 or $11 per square foot.
Another expense is the cost of any equipment you need to run your music shop. An average store may carry about $50,000 to $100,000 of musical equipment. You want to have various music equipment available to give customers various choices. This investment can be offset by manufacturers willing to loan you instruments on consignment so you can get an initial seed of inventory for customers to choose from.
You must consider the costs of paying employees working at your music shop. According to the Bureau of Labor Statistics, the average wage of a retail worker in the US is $16.70 per hour. You will need employees to help stock product shelves, unbox new inventory, run the cash register, assist customers with questions, and provide services.
You want to invest in your music shop's marketing at the beginning of your business to determine what your customers will respond to. According to Indeed, classic billboards can cost as low as $250 per month for advertising. In contrast, digital billboards cost between $1,200 and $15,000 per month, depending on the location.
Your music shop business will incur various expenses during a day-to-day business you want to keep track of. These include utility bills for electricity, running water, and retail supplies. For example, US News & World Report found that the average American spends $117 monthly on electricity. This number is higher for small businesses, which collectively spend more than $60 billion a year on energy, according to Energy Star, a program run by the US Environmental Protection Agency.
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Funding methods are important when thinking of how to start a musical instrument store. One of the best ways to secure funding for a new music shop business is through a loan from the Small Business Administration (SBA). One option they provide is called an SBA Standard 7(a) loan. This can guarantee a maximum loan amount of $5 million and an express loan maximum of $500,000. The interest rate for this loan will be between the negotiated base rate plus between 2.25% and 4.75% based on the amount and length of the loan.
Other methods to secure funding for a new music store business include:
Get loans from friends or family
Use credit cards to fund initial business purchases
Raise money through a crowdfunding site
Get a bank loan
Present your idea to an investor
When figuring out how to start a music store business, one of the more critical things to consider is what you will be selling. You want to choose items with reasonable profit margins but are also popular enough to get sold. Below is a breakdown of some musical products at the estimated prices you can sell them for and the profit you will make:
|Product||Estimated Cost to Purchase for Customer||Estimated Profit per Purchase||Why it’s popular|
|Electric guitars||$100-$1,000||$30-$400||It is a versatile musical instrument that is a popular choice in rock bands|
|Keyboards||$100-$1,000||$30-$400||Lightweight, portable, and inexpensive|
|Trumpets||$400-$1,200||$120-$480||Important for bands and orchestras|
|Audio amplifiers||$80-$400||$32-$240||Needed to increase the volume of some instruments|
|Sheet music||$2-$3 per song||20-80 cents per song||Helps musicians study music and learn to play songs from popular genres|
|Violins||$100-$1,000 or more||$30-$400||A critical instrument for orchestras and can play many different music styles|
|Headphones||$20-$500||$3-$300||Lets you listen to music in private spaces|
|Drum sets||$300-$10,000||$60-$4,000||An essential instrument in many forms of popular music|
|Microphones||$10-$5,000||$1-$2,000||Helps musicians record music|
|Lighting sets||$50-$400||$5-$160||Musicians use these to light the stage they are performing or set the mood at a performance.|
Your physical location is critical when forming a music shop. Your location can influence the products you want to carry. Customers in one area may have different preferences than another area. Below are a few places that make sense to start a music shop.
An at-home music business can be a good choice if you plan to sell music equipment online. You can save on costs like renting a building and paying employees to staff the music shop all day. However, you will miss out on the benefits of being available to the public, like getting discovered by passers-by and building a rapport with customers.
Another option for your music business is setting up a shop in an urban area. This allows you to access increased foot traffic, which will tempt customers to enter your shop and look around. However, downtown and highly urbanized areas typically have higher crime rates, like vandalism and theft. You will want to take precautions like increased security for your store and deter theft attempts by installing cameras.
A music store near a school can conveniently get students their musical instruments and music equipment for band class. Depending on the size of the school, many students in multiple grades can use instruments throughout the year. A downside of being near a school is that the traffic around your shop may be difficult to navigate when school is over.
Setting up a music store in a tourist area near an airport or popular tourist attraction can be an excellent way to start. You will have access to a wide demographic of potential customers from multiple parts of the world. A downside of relying on tourist customers is that sometimes tourist seasons may be lackluster, and you will have less access to customers.
Shopping malls are another great spot to set up a shop. They have a natural traffic of customers visiting to buy products. Your store benefits from the mall's traffic just by being there. A downside of shopping malls is that rental rates for a store can be competitive because many people might also want to set up a store in that location.
An ideal building for a music shop is a manageable size. You will want enough space to store all your inventory, but you don’t want it to be so big that you cannot keep track of customers in the store. Music customers often need help with their purchases, and you want you and your staff to be available to answer questions in a personalized atmosphere.
Another feature of an ideal music store is big windows to display products. You want to be able to put shiny and alluring musical instruments and products in your store window to attract eyes to your music shop.
You will want to decide whether to build, lease, rent, or purchase a building. Renting gives the option to pick up and go with less investment in the short term. However, building or buying a structure allows you greater freedom in designing exactly how you want it to be.
The most important thing to nail down when figuring out how to start your own music store is what your business plan is. A business plan is a strategy you will develop that maps out how to succeed as a music business. To figure out your business plan, you will want to follow a process that includes the following:
Detail and personalize the goals of your music shop–You will want to plan out the short-term and long-term achievements that you can use to mark your success. Your music shop goals may include achieving a certain number of customers, drawing a certain amount of revenue. reaching a certain level of brand recognition, and so on
Create a mission statement–You will create a formal summary of your music shop company's values. These will help your workers and customers understand the direction your music shop is heading
Implement an intelligent market plan–Discover your target market, the price points customers will accept, and how you can best draw new clients into your music shop. As a music shop owner, please pay attention to the types of music the local community consumes and decide which products would do well with them
Decide what services and products your music shop sell–You will want to think about which music items will sell well with the customers you want to market to. Try to determine product and business trends by commissioning market research and experimenting with products
Take an inventory of your assets–Figure out what assets you already have that will give you an edge on starting your music shop
Make a financial projection–This will help you determine your business's viability over time based on projected profits versus expenses
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When starting a retail music store business, you must consider the permits and licenses you need to operate your business and how much they will cost.
|Business Permit||$50-$300 or higher, depending on the size of your business|
|Music license||$200-$700 per year|
|Sales tax license||$0-$60|
Financial losses can happen when you least expect them in the business world. You may encounter a lawsuit from a disgruntled customer or a string of thefts that causes you financial harm. When operating a business, you must invest in a good music shop insurance policy that combines essential coverage. Below are a few recommended types of insurance for music stores.
General liability insurance protects your music shop business against third-party liability claims resulting from personal injuries, bodily injuries, and property damage. You would use this insurance for claims of copyright infringement, customer injury, and more. Consider getting one from NEXT now.
Commercial property insurance is a policy that helps you pay for damage to your business building and related business property when damage occurs due to a physical event. Covered events would be incidents related to theft, crime, storms, and fire damage. We recommend CoverWallet for this.
Workers' compensation is an often legally required insurance policy that pays benefits to injured employees you have. If your employee gets sick or injured on the job, they are entitled to benefits that help them make up for lost income and pay for medical treatments they made require. The Hartford is a renowned option for workers compensation insurance.
In the digital age, you may ask yourself how to start an online music store. After all, an online music store can reduce your business's overhead costs since you need less space and employees. Below are a few suggestions for starting an online music store:
An Amazon store is easy to set up. All you need is an Amazon account and to purchase a selling plan. An individual plan will cost you 99 cents every time you sell an item, while a professional plan costs $39.99 monthly, no matter how much you sell. A downside of relying on Amazon is that they can shut your account down anytime, giving you little recourse. This can happen due to things like:
An influx of negative reviews or bad customer service reports
Violating Amazon’s terms of service
Amazon doesn't like the performance metrics of your store
Building your music store website is an excellent way to exercise control over your online presence. While you will lack the natural customer base of a big corporation like Amazon, you can slowly build your customer base through discovery on Google, word of mouth, and advertising.
Web domains can cost as low as $5-$50 per year. If you have some experience with web design, you can also buy or build a website based on a template reasonably quickly. There are even free services that can help you make your website.
To sell musical items on eBay, you will want to follow several steps, which include:
Create an eBay account and set up your digital storefront
Create an item listing
Add videos and photos of the product
Write a product description and specify the condition of the musical equipment you intend to sell on eBay
Set the pricing structure for the music equipment and accessories you will sell
Set up the shipping details and selling preferences of the products you are listing
Make your listing a promoted listing attract more buyers
eBay is an easy-to-use platform that both buyers and sellers highly trust. This service lets you list up to 150 products per month for free and have excellent SEO results to help people find your products on Google.
A downside of using eBay is that it is harder to develop a relationship between buyers and sellers because of the barrier created by shopping online.
K-pop is an increasingly popular music genre. As a music store owner, you may also ask yourself how to start a Kpop store to capitalize on this potential revenue stream. Below we have listed a few steps that you can take to help get the foundation laid for your Kpop store:
Find Suppliers–Find K-pop music and merchandise that come from high-quality sources. You will want to find products you can sell at a markup easily that your customers will accept
Conduct market research–Figure out which items your customers will likely be interested in by running surveys and testing the market with a few products at first
Find a platform to spread awareness of your brand–You will want to advertise your K-pop products through avenues like social media, a website, and K-pop community blogs to generate buzz and reach potential customers
Decide how you will sell your music equipment and related products–Will you ship to international customers or open a physical store to cater to local clients? Deciding your business's location and how you will primarily be interacting with customers will influence the direction of your K-pop business
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