Whats it take to start a hardware store?

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Chris142

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None in my area. We have lowes and Home depo home improvement stores. We also have what was a western auto. The lady that runs that store is only selling off whats left over from when they stopped being a western auto 25 years ago. Only thing left in there are ancient oil filters with shrunken seals, old dusty spark plugs and a few hand tools.

Oh we have tractor supply that does have a good supply of nuts and bolts as well as tractor implements that wont ever sell here.

Went to a true value and I was amazed at the neat and useful stuff they had. Why wouldn't that kind of store work out here?

Whats it take to open one?
 
Why not contact True Value corporate to find out what it takes?

Ace Hardware requires $250k in liquid capital and $400k net worth, but they are not the same.

How large of a population would this store serve? If you are going to have to borrow money to open it up, the investor is going to want to see a solid business plan with a strong potential market.
 
Originally Posted by Quattro Pete
Why not contact True Value corporate to find out what it takes?

Ace Hardware requires $250k in liquid capital and $400k net worth, but they are not the same.

How large of a population would this store serve? If you are going to have to borrow money to open it up, the investor is going to want to see a solid business plan with a strong potential market.

350k people in my area.
 
Originally Posted by Chris142
Originally Posted by Quattro Pete
Why not contact True Value corporate to find out what it takes?

Ace Hardware requires $250k in liquid capital and $400k net worth, but they are not the same.

How large of a population would this store serve? If you are going to have to borrow money to open it up, the investor is going to want to see a solid business plan with a strong potential market.

350k people in my area.


That's certainly enough people to support a hardware store.
 
Originally Posted by Quattro Pete
Why not contact True Value corporate to find out what it takes?

Ace Hardware requires $250k in liquid capital and $400k net worth, but they are not the same.

How large of a population would this store serve? If you are going to have to borrow money to open it up, the investor is going to want to see a solid business plan with a strong potential market.


This, and maybe more, but it depends on the overall area. If there is a Lowes or a Home Depot within 10 miles of your location, then I would say its a lost cause.
In addition to Ace Hardware and True Value, you have American Hardware and DoItBest. DoItBest is a very large outfit, but I think strictly speaking they are a coop ( not sure exactly).
 
The only hardware stores I have seen survive have been where the area has gentrified around them and they can charge rich people high prices because there isn't a box store 10 mins away.

You might want to consider something like a lumber yard/trade supply, but small scale. Imagine striking it rich on a plumbing/electrical supplier.
 
Surprisingly we have one in our little town. It's a lumber yard, hardware store and also sells stuff to ranchers. I never thought it would compete with the full set of box stores 18 miles down the road, but somehow the doors are still open and he stocks lots of stuff. I try to give him as much business as I can. It has no brand name affiliation. The biggest input costs were the land and new building, and the inventory. Taxes here are very low.
 
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You won't be able to buy in the quantity that Lowes and Home Depot can, so they will be able to undercut you on everything. Unfortunately it's not a good scenario for future success.

I'd look for other opportunities.
 
It'll be hard to compete with 2 big box stores. I'm from a tiny town, population ~3,500, and they got one a few years ago and it does okay. Closest big box stores are 30 minutes away though.
 
ACE hardware stores do fine here with big box stores within a mile. Beyond the financial requirements above some business background/education sure wouldn't hurt. Contact a franchise like ACE, don't depend on an oil forum.
 
I thought about buying a liquor store that was up for sale years ago. Realized margins are really thin and a chain grocery store in all of the cities/towns carries a wide selection of alcohol including liquor.

Even though alcohol prices in Michigan are more or less fixed, I couldn't have competed with the grocery store simply due to the convenience they offer.

I think in order for your venture to work it needs to be based on convenience. I shop at Menards (preferred over Lowe's and HD) mainly due to convenience, selection and prices. There are other hardware stores that are closer but the Menards is located in a part of town that I can do all my other shopping.

If your population of people currently shop at big box stores because other stores are nearby, I'd look into something else. I do go to the closer hardware stores from time to time, but only because I need one item and only drive 10 miles round trip vs 28.
 
Depends on your local population demographics. Typically the ACE or other independent does well selling high end items that Lowe's and Home Depot lacks. Also the service of loading the vehicle.

My wife occasionally pays $2 extra a bag for softener salt because they load it 6 bags in car for her vs Lowe's .
 
Originally Posted by maxdustington
Imagine striking it rich on a plumbing/electrical supplier.

We already have those. No lumber supplier to speak of. Hesperia lumber only sells in bulk.
 
Originally Posted by rubberchicken
Originally Posted by Quattro Pete
Why not contact True Value corporate to find out what it takes?

Ace Hardware requires $250k in liquid capital and $400k net worth, but they are not the same.

How large of a population would this store serve? If you are going to have to borrow money to open it up, the investor is going to want to see a solid business plan with a strong potential market.


This, and maybe more, but it depends on the overall area. If there is a Lowes or a Home Depot within 10 miles of your location, then I would say its a lost cause.

We have too many HD and lowes around. But they dont stock what the hardware store up in the mountains does.
 
Originally Posted by rubberchicken
If there is a Lowes or a Home Depot within 10 miles of your location, then I would say its a lost cause.
Yep. They have put every other hardware store, building supply, and lumber yard out of business around here. Immediately after Home Depot opens a store near them, one long-time family owned Texas chain (McCoy's) even closes their stores preemptively, they don't even wait to see if they can compete.
 
As has been mentioned, it takes quite a bit of capital to open up a hardware store.
We have our share of Home Depots/Lowes/Menards around here; however, we also have a number of successful hardware stores. To compete against them you have to find the niche in your area that will draw people in.
Around here, the small stores generally seem to offer:
1. Customer service (and knowledge of product) that go far beyond the big box stores
2. Offer services (screens, small engine repair, sharpen blades, etc) that either the big boxes don't do, or don't do well.
 
The few that have survived where I live specialize in products lines not sold at big box retailers and also provide service work.
Example of a high end Ace hardware in the county I reside in.



This video shows what a modern successful hardware store is. The video after it shows a cool Ace location in TX.
 
I've also been told it's easier to get a first time SBA loan because the bank has less risk.
I have a friend that got a $400K loan for a mini storage business and it's a cash cow. He has no college education.
 
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