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How to Start a Music Business: Opening a Record Store
These three areas must be dealt with prior to new record store.
One of the primary costs of your initial launch may be to obtain your inventory of thousands of CDs from suppliers to fill your store before opening. Suppliers probably want you to succeed and may help to finance your inventory by allowing you a thirty or even sixty day payment period after receiving the products. This period of time may buy you the ability to sell some inventory and generate some revenues. However, you will probably have to cover a large part of the inventory cost with your startup capital and estimating this number is a key consideration for your business plan.
To keep your doors open, you will need a clerk or clerks at all times to complete sales transactions and provide customer service, as well as other employees to at least occasionally stock shelves, maintain the store, and order new products. You may choose to make one of these employees yourself in the early days of the store, but you must have the ability to hand off this work as time goes on. Your value to the store will be in strategic thinking about marketing, branding, and operations systems, and not in ringing up customer after customer.
Your store can be successful if accessible only by car as well as if it is just reachable on foot. If accessible by car, see if you can place promotional signs along the road on the approach the store and not just at the store itself. The earlier that drivers read your sign, the more time they have to consider changing their plan and stopping. This is not necessary for a walk-up location where passersby have ample time to think about stopping in.
The more difficult your store is to reach by your customers overall, the more they will be encouraged to shop for music online or at a closer competitor’s store. Furthermore, if big box retailers can beat you on prices, you may need to be extremely close to customers to make shopping at your store make sense for them from a purely financial perspective.
Want more tips? Here's a related article: Music Industry Business Plan
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