How to Start an Antique Store
Are you a collector of antiques? If you love going on the hunt for antique treasures and have some knowledge of the values and history, you may have dreamed of opening your own antique store. You can enjoy the wonderful pieces of history that you love while earning money and being your own boss at the same time.
Antique dealers purchase antiques primarily from estate sales, flea markets, garage sales, and auctions and then sell them at a higher price in their store, or at a booth in an antique mall, flea markets, or online. Many antique dealers specialize in certain items such as antique furniture, advertising memorbilia, or household items. Many antique dealers sell through multiple channels. For example, some might have a booth at an antique mall but also sell online through their own website, an auction site, or a retail site like Amazon.
According to the United States Census Bureau, the resale market in the United States was estimated to be $17.5 billion in 2020, 13% of which was antique stores, meaning that the antique store market size in 2020 was over $2.25 billion. According to Statista, online sales of antiques boomed in 2020, reaching $12.4 billion globally. Antique stores are vulnerable to the ups and downs in the overall economy because antiques are a luxury purchase, so sales go down when consumers have less disposable income.
The antique industry is expected to grow, particularly online sales. If you open an antique store, having an online sales channel is critical to business success. Current trends in the types of items consumers are buying include mid-century modern, modular 70s pieces, art deco, and small items. However, trends in buying habits are very dynamic, so it is important to keep up with what is popular in any given time period.
The target market for an antique business will be consumers who collect antiques and appreciate quality. Often they own older homes and want items that fit the time period of the architecture.
Skills, Experience, and Education Useful in Running an Antique Store
There are several specific skills that will be valuable to you while running an antique shop.
- Knowledge of prices and trends. One of the biggest challenges in running a vintage store is knowing your merchandise, how much to purchase it for, and what it’s really worth. You need to have extensive knowledge of various items so that you can spot what is authentic and what is a reproduction.
- Business knowledge and experience. You will need to have some basic knowledge of marketing, finance/accounting, and human resources. Developing expertise in specific types of antiques and collectibles is valuable as well.
- Sales. As an antique dealer, you have to be able to market and sell your items both in-person and online. This would involve knowing how to present your items to highlight their best features.
- Customer service. You’ll need to be able to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.
Checklist for Starting an Antique Store
If you’re thinking about starting an antique store, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your antique 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, and more. You’ll also need to do some research to calculate exactly what your startup 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.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect antique 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: Select a Business Structure
A business structure (also referred to as a business entity) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the 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.
When deciding on which business structure is best for an antique store, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest structure to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Your store, ideally, should be located in a historic area with a lot of foot traffic. While it seems that you don’t want to have competition, it’s actually a good thing to be among other antique stores. People like to browse multiple stores, but you need to make yours stand out with good signage and window displays, as well as unique merchandise.
If you are going to operate as an antique mall with booth spaces for local vendors, be sure to create a vendor agreement. A vendor agreement should include the amount of rent, commission amount, and the length of the agreement, which is usually 6 to 12 months. Another important consideration is what items are allowed in your store as you don’t want sellers using your space simply for storage or letting them display junk.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
Depending on the location of the business, several types of business registration will likely be needed.
Some common registrations an antique store may need include a business license, sales tax permit, and an Employer Identification Number if you plan to hire employees.
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 an antique store is another. In order to get a loan, 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. Some entrepreneurs use their own funds, a home equity loan, or credit cards, but you are putting your funds at risk and will have payments that may or may not be more than those of a business loan.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
An antique store will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for an antique store include social media marketing using Facebook Marketplace, Instagram, Pinterest, and online advertising. Your main source of business, however, will be foot traffic when located in the right area, which makes finding a good location so important.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting an antique store. A few of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– 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.
– Property and casualty insurance protects a business if merchandise is damaged from an event such as flooding or fire.
The cost to insure an antique store will vary depending on several factors. 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: Hire Employees
Running an antique store is very time-consuming. You’ll be spending a lot of time buying items, as well as running the business. Since this is often a task better suited for the owner, employees that you can trust to run the store and negotiate prices with customers may be needed if you plan to be open every day.
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 antique 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.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start an antique store?
Most of the costs to start an antique store are the for preparing the space and beginning inventory.
Some of the costs to start an antique store include:
– Purchase price or deposit to lease space for your store. To lower your initial investment, you could rent a space in an antique mall for $150+ to get started
– Display cases, other store set up
– Initial inventory
How much can an antique store owner make?
Your prices will vary depending on the item, and you should aim for at least a 30% profit margin on each item. You may be able to make $40,000 – 60,000 annually, but your revenue will be dependent on your location, how large your space is, and how much inventory you plan to have.
Are there grants to start an antique store?
It’s extremely rare to find a grant to start an antique store. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for an antique store?
The NAICS code for an antique store is 453310, which is classified under Used Merchandise Stores.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?