How to Open a Record Store

Start a record store by following these 10 steps:

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

We have put together this simple guide to starting your record store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out othersmall 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 important and challenging. If you don’t already have a name in mind, visit ourHow to Name a Businessguide or get help brainstorming a name with ourRecord Store Name Generator

If you operate asole proprietorship, you might want to operate under a business name other than your own name. Visit ourDBAguide to learn more.

Whenregistering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a record store?

By far the largest expense when getting started is investment in inventory. In order to have a nice selection, the investment in inventory is around $100,000. Some store owners use their own personal collection of items acquired over decades and open a record store in order to liquidate their personal collection.

Equipment needed is a cash register(s), bins to hold items for sale, appropriate lighting, and decorations to make the store attractive. The other thing needed is exterior signage. These add up to an additional $10,000 to the startup costs.

最后,一个存款往往需要签署一个经度g-term lease. The deposit amount depends on the monthly rent and the size of the retail location.

What are the ongoing expenses for a record store?

The main expenses are rent, electricity, and staff costs. To succeed, these need to be as low as possible. For example, renting a high-traffic location in a high-priced shopping mall is completely the wrong idea. The rent needs to be very low and the location can be in a very odd place or even out of the way. The attraction is the inventory and store-owner knowledge, not necessarily the location of the store.

Who is the target market?

People who love listening to music and collecting it are the ones attracted to this business. Another customer type is a DJ looking for extended play or dance mix albums to use in clubs.

How does a record store make money?

Records sell at retail prices with sales tax. For online sales, shipping and handling charges are additional.

How much can you charge customers?

Retail sales average around $24 per buying customer. Extremely rare collectibles can sell for many thousands of dollars.

How much profit can a record store make?

There may be low sales during any particular week. Then, a regular collector may come in and buy a significant amount of items. A small record store might make $800 to $1,000 per week in average sales or $41,600 to $52,000 in sales per year. Approximately 25% of the sales are profits, which equals $8,350 to $10,500 per year.

How can you make your business more profitable?

Great strategies to improve profitability of a record store business include:

• Acquire entire collections at bargain prices from estate sales.
• Find valuable old records in second-hand stores and at garage sales at low prices.
• Take rare items in on consignment.
• Sell both from the shop and online.
• Sell CDs and DVDs in addition to records.
• Featurein-store performances.

STEP 2: Form a legal entity

The most commonbusiness structuretypes are thesole proprietorship,partnership,118bet金博宝 , andcorporation.

Establishing a legal business entity such as anLLCorcorporationprotects you from being held personally liable if your record store is sued.

You can金宝搏188是什么公司yourself and pay only the minimal stateLLC costsor hire one of the118金宝app 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 aboutstate sales taxand 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 aspiercing 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 abusiness credit cardhelps 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 ourLLC 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 open a record store. Learn more about licensing requirements in your state by visitingSBA’s reference to state licenses and permits.

Music Licensing

In order to play music in a business setting, permission must be acquired from the composer or license holder. Typically, it is possible to obtain “blanket” license allowing a businesses to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from Performance Rights Organizations, such as ASCAP and BMI.

• Learn more about music licensing requirements

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully.Business Insuranceprotects 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 withGeneral 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 isWorkers’ 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?

Do you like listening to music? People attracted to this business love listening to music. They enjoy understanding the detailed history of music (“musicology”). They know how the creation of a music style happened, who performed it, and how popular a style became. They enjoy serving as an authority/guide for others as a curator for specific styles. Independent record stores are not particularly lucrative and are best suited for music lovers, who are content with marginal profits.

What happens during a typical day at a record store?

The daily activities for the staff or owner of a record store include:

• Marketing efforts to find customers- A combination of selling online with a physical retail presence is most effective. The physical retail store may be very modest. In fact, it should be. However, profits do exist from managing vast catalogs of acquired materials and selling them both online and offline. The marketing budget is usually limited to free postings online such as offerings on Craigslist or eBay. Posting flyers around town and at music events or collector conventions is also helpful.
• Closing out the accounting for daily sales and updating inventory records– Every day, enter the sales from the day before in the accounting system and update inventory records to reflect the sales.
• Order fulfillment– Process any sales that need shipment and prepare the packages for pickup by the shipping company.
• Cash management– Count cash in the register(s) to verify the correct amount exists according to the transactions made. Note any discrepancies. Make change from the register proceeds for large cash bills to make sure the change is available for cash-paying customers. Deposit any excess over the baseline cash requirements into the business banking account.
• Clean the store– This includes making sure to clean all areas of the store according to a posted daily schedule. Additionally, check the bins for vinyl records for proper alphabetization and artist/genre categories to make sure the correct product, offered for sale, is in the correct place.
• Promotional materials– Put up and keep current the display of promotional materials.

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

You have to love listening to music. The best ones in this business love learning the detailed trivia about the music, including information about its creation, who performed it, and why a particular record is significant.

What is the growth potential for a record store?

There are no significant franchise opportunities. The trend with record stores is that they are largely independent. This is a very niche area where there are no longer many retail chains. There is less possibility for expansion when starting with one store. Some of the best independent record stores closed down, so this industry sector is reducing not expanding.