# Open For Business: But at What Cost? Published 2019-03-20 · Updated 2026-03-19 · Retail on MarketScale Canonical: https://www.marketscale.com/industries/retail/open-for-business-but-at-what-cost > In the age of the internet, starting a business can be as simple as hosting a free website and marketing services or goods through social media sites. Starting a retail business where customers can come browse merchandise and make purchases tends to be a larger endeavor. On average, starting a small business costs $3,000 at… In the age of the internet, starting a business can be as simple as hosting a free website and marketing services or goods through social media sites. Starting a retail business where customers can come browse merchandise and make purchases tends to be a larger endeavor. On average, starting a [small business costs $3,000](https://www.businessnewsdaily.com/5-small-business-start-up-costs-options.html) at the outset. There are many expenses associated with beginning a retail business, some of which are less obvious than others. ### **The Cost of Business** Whether the retailer has a physical store or not, simply [starting an official business](https://money.usnews.com/money/personal-finance/articles/2015/07/17/the-hidden-costs-of-starting-your-own-business) carries costs. For example, [incorporating a business](https://www.incorporate.com/starting-a-business/incorporation-overview/) involves: - Taxes - Licenses and fees - Legal fees - Insurance - Loans and interest (if the business needs financial backing in order to launch) The more complex a business is, the more these costs tend to be. A business with a storefront and multiple employees, for instance, will pay taxes as a business, an employer, and as a property owner/tenant. ### **Costs of Owning a Work Space** Businesses that function out of a work space, not just virtually, incur certain expenses as well. Some of the costs involved in [hosting a business](https://www.shopkeep.com/blog/how-much-does-it-cost-to-start-a-retail-store) in one specific location include: - Rent/Mortgage Payments - Utility bills - Insurance - Licenses, permits, and fees (for certain types of work) - Furniture/décor - Supplies, equipment, and technology needed to operate your business Of course, larger work spaces that hold more workers have more expenses, as do businesses that require specialized equipment. ### **The Cost of Retail** All the costs mentioned must be added onto the costs of retail if someone is starting a retail business. Some of the main [costs of operating a new retail business](https://www.thebalancesmb.com/how-much-does-it-cost-to-start-a-retail-business-2890132) include: - Employees - Employee benefits - Inventory - Display/storage for inventory - Machines or technology for transactions - Signage - Décor to make the space appealing Of course, each of these costs will vary from business to business. A [case study](https://www.inc.com/articles/201108/business-start-up-costs-retail-store.html) of a consignment store in Austin, Texas, for instance, shows that inventory costs are very low since the products for sale are consignment pieces. ### **Other Costs to Consider** Running a retail business also has costs many people often overlook- like [shrinkage](https://www.nasdaq.com/article/8-hidden-costs-of-starting-and-running-a-business-cm860580). This occurs when, for reasons like employee theft or vendor fraud, inventory numbers are less than anticipated. Losses like these require that some margin is built into the budget. For a retail business to get off the ground well, it is also essential for customers to actually come to the store and make purchases- consistently. Contrary to popular myth, customers do not just come and develop loyalty to a business because it is newly opened. Marketing and networking is necessary to [build a customer base](https://www.businessnewsdaily.com/8378-10-things-to-do-before-opening-a-retail-store.html)– and these practices usually have costs too. Some of the [costs of marketing and networking are unexpected](https://work.chron.com/much-cost-open-retail-store-8869.html). For example, a business will not just pay to create marketing materials- they will also need to trademark a logo, purchase a unique domain name, and more. Small costs like these can add up significantly. According to Small Business Trends, small businesses should expect to spend about [1 percent of their budget](https://smallbiztrends.com/2018/04/much-small-businesses-spend-on-advertising-marketing.html) on advertising and marketing, plus a little extra during their launch period. For the latest news, videos, and podcasts in the **Retail Industry**, be sure to subscribe to our industry publication. **Follow us on social media for the latest updates in B2B!** Twitter – [@RetailMKSL](https://twitter.com/RetailMKSL) Facebook – [facebook.com/marketscale](http://facebook.com/marketscale) LinkedIn – [linkedin.com/company/marketscale](http://linkedin.com/company/marketscale) --- Source: MarketScale, https://www.marketscale.com/industries/retail/open-for-business-but-at-what-cost. Published for AI indexing and citation; cite the canonical URL. Site guide for agents: https://www.marketscale.com/llms.txt