Want to open a Boxing and MMA retail business? In this blog, we are providing a breakdown of all the costs you need to know about when opening and running a Boxing & MMA shop.
Before anything, we would suggest creating a business plan to get an estimate of the total costs you can incur. Failing to budget can be one of the biggest mistakes you can make while opening a retail business.
Costs of Opening a Boxing & MMA Retail Store
The following are factors that contribute to the costs of opening and running a Boxing & MMA retail store:
1. Rent and Utilities
The rent for the store and utilities such as electricity, water, and gas will depend on the area or location you are in. For example, rent and utility costs in New York are much higher than in other states of America.
As for the rent you might need to pay, a store in a popular shopping area can cost you $24 per square foot. Whereas a location that does not have much footfall can cost you around $11 per square foot. By using the following you can calculate your monthly rent:
Yearly price per sq. ft. x square feet ÷ 12 months = monthly rent
$24 x 2000 sq. ft. ÷ 12 months = $4000
As for the utilities, the average monthly utility costs in the US are,
- Electricity: $117.46
- Gas: $61.69
- Water: $45.44
- Sewer: $66.20
- Internet: $59.99
- Phone: $114
Total utility bill for one month: $464.78
We would recommend you allocate $4500 - $6500 for monthly rent and utilities.
2. Retail Management System (Software expense)
How is a Management System useful for your store? For one it can automate your business operations which helps in saving time for you to focus on more important parts of your business. Other than saving time, a management system also saves costs as you won’t require employees to do each and every task.
A retail management system can automate your overall store operations such as keeping track of the sales, inventory management, Point of Sales (POS), Purchase history, and reporting. You need to find a software that can quickly provide you with these features so that you can focus on other aspects of your store.
A retail management system can cost you anywhere from $600 to $1200 per month depending on the software and the functions you want to avail for your retail business.
3. Permits, Licenses, and Insurance Cost
Before anything else, you need to do some research on which permits or licenses you require for your retail store. Those permits and licenses will also depend on the city or state you live in. You can check online and see which licenses and permits are required for your Boxing or MMA retail store in your area.
You might require some legal services from either lawyers or consultancy firms for your permits and licenses. Depending on the experience, a consultancy firm can charge anywhere from $70 - $200 per hour. Let’s allocate $100 per hour for the professional help you might be taking.
An insurance policy might not seem necessary at first but it does play a great part in your business. It gives you the assurance that in case of any damage to your store you won’t have to bear all of the loss by yourself.
Take your time in finding the insurance policy that suits your business needs and is the most cost-effective one for you. As an estimation, let’s suppose your insurance requires you to pay $12,000 annually for insuring your facility which makes $1000 per month.
4. Store Improvements or Remodeling
Once you have settled on a store which is within your budget and fulfils your needs, you might want to do some store improvements or remodelling. It depends on you how much you want to rebrand the store. You can either go all out and fully remodel your store or you can just make some improvements that are required in your store.
Our suggestion would be that you remodel the store rather than build a new store as it can be a more costly and complex process. You need to get a lot of raw materials for a new building and would also need to pay your employees for the design and labour costs.
Some of the store improvements may include:
- Glass work
- Doors
- Finishes
- Paint
- Tiles
- Shelving
Taking into account the raw materials, labour costs, and designing costs you can expect to pay around $180 - $200 per square foot for remodelling your store.
5. Boxing and MMA equipment Cost
The cost of boxing and MMA equipment that you will incur will depend on the stock you will be getting for your retail store. Following is a list of Boxing and MMA equipment you can sell at your retail store:
- Boxing gloves: Start from as low as $12 and can go up to $250 per pair
- MMA gloves: Price ranges from $25 - $60 per pair
- Punch bags: Price varies from $40 - $200 per bag
- MMA punch bags: Price varies from $40 - $200 per bag
- Protective gear: Price ranges from $10 - $250 for different gear pieces
- Training equipment: Price varies from $10 - $130 for different gear pieces
- Apparel: Price ranges from $20 - $100
- Equipment bags: Price ranges from $25 - $50 per bag
You can initially buy 20-30 pieces of each of the mentioned boxing and MMA equipment or as per your requirement and budget. Shipping costs will differ according to the weight of the order and the location where you want it delivered.
As you will be selling boxing and MMA gear which comes under the category of a physical good, you need to have an inventory or inventory space. Inventory space can cost you as much as $4000 - $5000 depending on the area and the space required for the products.
6. Marketing and Advertising Cost
Once you will have your store ready and open for customers you will need to market your store. Just opening a store is not enough you need to market it online and offline so that it reaches a greater audience. Usually, owners forget about these costs but you need to incorporate these into your budget.
The marketing and advertising costs will depend on the tools and strategies you will be utilizing for your business. If you already know about the different marketing strategies you can spend as less as $500 because you won’t require any professional help.
However, we would recommend that you hire a marketing consultancy firm or hire an in-house staff member for marketing. An in-house marketing specialist would charge you $24 - $25 an hour whereas a consultancy firm will charge $100 - $150 per hour.
The marketing and advertising costs will vary as it will depend on the business owner as to how much they want to market and promote their Boxing and MMA retail store. Your marketing and advertising expenses can vary anywhere from $5,000 - $7,000 monthly considering the professional fees and other marketing expenses.
Related Article: Marketing Tips For Retail Stores Of All Shapes & Sizes
7. Website Cost
A website is necessary for any business in today’s day and age. Having an online presence will not only boost your customer reach but will also help in increasing the overall revenue. So spending a bit of money to set up your website is the right approach.
A domain name is the first step in starting a website and it can cost you anywhere from $15 - $200 depending on the domain name and the tools or services that you choose. A business email hosting service runs a dedicated email service and can cost you $1 - $15 per month. You can either use self-hosted email servers or third-party email hosting.
An overall website design and development can cost you anywhere from $300 to $2000 but this will be the initial cost of starting your website.
8. Maintenance and Cleaning Supplies
Even if you have a well-built store you always need to maintain it. Maintenance costs are one of the ongoing costs that you will incur while running your retail store. These costs will include your utilities or any servicing or cleaning they might require.
The maintenance costs will depend on the size of the facility. Maintenance costs include the HVAC maintenance which can cost you $100 - $1,000 monthly depending on the number of fixtures or work that needs to be done.
Initially cleaning supplies can cost you about $200 as most of the products are new. Once your store is operating your cleaning supplies might lower to $50 - $100 per month as some of the initially bought supplies just need refills. Some cleaning supplies you might need each month are:
- Brooms: $10
- Mops and rags: $20
- Paper towels and wipes: $20
- Trash bags: $5
- Window cleaner: $10
- Floor cleaner: $10
In total maintenance and cleaning supplies can cost around $600 - $1100 monthly.
9. Miscellaneous Expenses
You might already be having a well-sorted-out budget for your retail business, but problems can arise in a business and you might need to have some amount on hand to handle those expenses. So, keeping some amount aside for miscellaneous expenses is necessary.
You can keep at least $1,500 - $2,000 each month in your budget for any miscellaneous expenses.
Summary of Monthly Costs
- Rent and Utilities: $4,500
- Permits, Licenses, and Insurance: $2,000
- Store Improvements or Remodeling: $20,000
- Retail Management System (Software expense): $600
- Boxing and MMA equipment: $15,000
- Marketing and Advertising: $4,000
- Website Cost: $450
- Maintenance and Cleaning Supplies: $600
- Miscellaneous Expenses: $1,500
Store Opening Cost: $48,650
The amount of $48,650 would be your store opening cost as store improvement and remodelling would be done only once before opening your store to the public. Your monthly expense would be $28,250 otherwise.
Related Article: How to Start a Boxing and MMA Retail Business [Complete Guide]
Conclusion
As stated before, a one-size-fits-all solution is not possible when it comes to a retail business as there are many factors that contribute to your total expenses. However, if you are looking to open a Boxing retail store or MMA retail store you can use the above-listed aspects and calculate an estimate for your business.
