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How to Start a Five & Dime Store
The original five and dime store concept was started by Frank Woolworth in 1879 in Utica, New York. Every item was priced at either five cents or a dime. That pricing held until the 1930s, when the top prices were increased to 20 cents. A modern five and dime store can't keep prices that low. However, the ambiance of the old-fashioned store, the variety of merchandise, and bargain basement prices can be maintained.
Make a list of the expenses that come with opening the store, such as lease payments, furniture and fixtures, start-up inventory, permits, and licenses. Calculate what the projected revenues are for the first year by month and subtract the expenses. Any shortfall, and the start-up costs, will have to be funded either through your own savings or a bank loan. Create a business plan for the five and dime store to keep you on the right track. The plan is necessary for financing as well. Investors or lenders will ask to read it. The business plan includes an overview of the business, product, or service, business model, competition, marketing, and financial forecast for the first few years the five and dime is open. The Small Business Administration can provide a template as well as articles on the different sections of the business plan. SCORE, -- Service Corp of Retired Executives -- provides consulting at no charge. The Small Business Development Office near you also has resources and provides free or low-cost consulting.
The original five and dime stores had a huge range of items such as cake pans, shaving brushes, pie pans, paper, costume jewelry, bath salts and soaps, pens, paints, garden tools, whisks, brooms, candles, candies, napkins, toys, and more toys. Candy was placed by the entrances for shoppers to grab on their way in or to remind them to take some home for the children on the way out. Scout out vendors who supply these types of items for retail prices of $1 or less. Some online party supply sites have packages of toys and decorations that include 10 to 20 items in the packages. Break the packages apart and sell the items within them individually. Tourist souvenirs and toiletries are more examples of products to add to your stock. Entrepreneur Magazine's article "How To Find and Work with Suppliers" suggests choosing a vendor on more than just price. Select vendors that give you the best combination of price, quality, delivery, and minimum purchase requirements.
A lunch counter adds ambiance to your five and dime store and profits to your bottom line. Serve simple menu choices such as hamburgers, hot dogs, grilled cheese sandwiches, milk shakes, and ice cream sodas. And don't forget the blue-plate specials. The "blue-plate special" got its name because the customer was served an entrée and three vegetables on a blue plate, for a very reasonable price. These should be nostalgic choices that don't require a gourmet chef -- items such as meatloaf or baked chicken.
Five and Dime stores have a 1930s and 40s ambiance. Crowd the shelves with merchandise. Display the products on tables with inserts to keep the categories of merchandise separate from each other. Keep candy in glass-fronted cases. Think of a general store with barrels, wooden crates, and checkered tablecloths to recreate that ordered chaos look in your store.
The draw of the store is a combination of low prices, nostalgia, and unusual items alongside more common merchandise. While the concept of a five and dime store is old-fashioned, use modern day marketing methods. Keep customers coming in by establishing an email newsletter to announce new products and specials. Update social media sites on a regular basis with new products you are offering and historical tidbits about the original five and dime stores.
Brian Hill is the author of four popular business and finance books: "The Making of a Bestseller," "Inside Secrets to Venture Capital," "Attracting Capital from Angels" and his latest book, published in 2013, "The Pocket Small Business Owner's Guide to Business Plans."