Sporting goods are always in demand for children’s sports teams, adult sports teams, and just for fun. If you are a sports lover, a sporting goods store offers a great opportunity to own your own profitable business and be involved in something that you’re passionate about.
A sporting goods store sells all types of sporting equipment for baseball, football, tennis, hockey, soccer, golf, and more. Products include balls, bats, pucks, hockey sticks, golf clubs, rackets, sports apparel, shoes, protective equipment, and everything else necessary for almost every sport.
According to IBIS World, the sporting goods industry market size as of 2021 is $52.1 billion. It has grown .2% per year for the last 5 years. The industry is sensitive to economic fluctuations, increasing when people have more disposable income. There is a tremendous amount of competition in the industry, which creates a barrier to entry.
The industry was tremendously impacted by the pandemic due to many sports coming to a halt because of stay-at-home orders and social distancing guidelines. As the pandemic winds down, the industry should rebound. The home sports and exercise sector, which did well during the pandemic, is expected to remain popular.
Your target market will be adults involved in sports and parents of children involved in sports and local athletics. Organized sporting teams are an excellent market to target.
Skills, Experience, and Education Useful in Running a Sporting Goods Store
There are several specific skills that you will need to open a sporting goods store.
- Retail Experience. Working in a retail setting, particularly in a management role, will be extremely valuable in understanding how a retail store operates.
- Sports knowledge. You will need to be able to talk to your customers about sports and the equipment they need.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Sporting Goods Store
Here are the typical startup costs you will face when you open a sporting goods store.
- Space rental $1,500 – $5,000 per month
- Space preparation including signage, shelving, registers, etc. $10,000 +
- Initial inventory $25,000 – $50,000
- Initial marketing such as Facebook ads or search engine optimization for your website $500 -$1,000
Steps to Starting a Sporting Goods Store
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your sporting goods store should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, vendors, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect sporting goods store name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
Your location is critical. You should be in a retail location with a lot of foot and road traffic so that you have high visibility and that is convenient to your target customers. You should also avoid being near your competition.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a sporting goods store is another. In order to get a small business loan or line of credit, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A sporting goods store will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a sporting goods store include social media marketing and online advertising, as well as sponsoring local athletics. Developing a website can be a significant expense, but it can also give your sporting goods store greater visibility online. You can also market directly to sports league associations.
Step 9: Get Insurance
A sporting goods store needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You will need employees to help you run your sporting goods store. Make sure that you select people with appropriate experience and sports knowledge.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your sporting goods store is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How Much Can You Potentially Make Owning a Sporting Goods Store?
Your revenue depends on how successful you and how large you can grow your customer base. You should be able to make several thousand dollars a month, but if you become extremely successful or even franchise, the sky is the limit.
Things to Consider Before Starting a Sporting Goods Store
Running a sporting goods store or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. You will face a lot of competition, so your marketing will need to make you stand out, and your prices will need to be competitive. You will be facing competition from very large sporting goods stores, so finding a location where a large sporting goods store doesn’t exist would be extremely valuable.
Some products will be seasonal, so you will need to keep that in mind and promote the right products at the right times.
You will be risking money opening a sporting goods store. It will take time and hard work to see a profit.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other sporting goods stores to see what they offer and what prices they charge.