How to Start a Hardware Store Business

A hardware store requires a huge investment for a facility and an inventory of tools and materials. Like any new business, the best ways to start a hardware store involve thorough research of your potential market to find out if there's a need as well as a lot of planning before you start leasing or buying space, purchasing inventory, hiring people and otherwise investing capital.

 

The Basics

If your community has a big-box hardware store like Home Depot, which is able to provide volume at discount prices, you have to have a winning strategy to compete. Organizations such as the Small Business Administration and SCORE can offer help with early steps such as researching the market to find out if there is enough demand for your hardware store. They can also help with developing a business plan, figuring out financing, evaluating vendors and handling human resources.

Provide Stellar Customer Service

One advantage smaller companies have over big ones is the ability to connect intimately with your community and provide stellar customer service. Know the names of regulars at sight. Greet people warmly and ask how their projects are coming along. Have seminars or even personal advice available on how to do basic projects such as laying tile or installing an electrical switch box. If you don't have an item, suggest someplace the customer could get it or offer to order it right away. Provide the kind of knowledge and personal service the big stores struggle to offer.
 

Create a Niche

One hardware store owner noticed there was a high population of women homeowners and renters in a particular area. She knew women might feel disenfranchised at big-box hardware stores that have not typically been women's domain and frequently women do not feel fairly treated as customers or are presumed to be ignorant of tools and building processes. She built her hardware store specifically with women customers in mind. Other niches might be for high-end tools that carpenters would use or might focus on providing "green" or environmentally friendly materials for building.

Find the Perfect Location

Find a space where the drive to a big-box hardware store or even another competing small store would be more than 15 to 20 minutes. Frequently in the midst of a project, people run into the need for a tool or other material and don't want to drive long distances to pick the item up. Your proximity, especially in conjunction with exceptional customer service, can win over those customers to pay the few extra dollars you might have to charge for your products.

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