yes, the minimum investment in a Woodcraft store is $500,000. You can't open a store with less money than that, and it's going to be a small store with limited inventory. Just think about it...forget even about the 50,000 of it that gives you the franchise part...just think about opening a store called Don's woodworking supply. First thing you need is a building. You'll likely have to rent it, so lets just throw out a number of 2 grand a month..that is likely a slum, but whatever. It is going to take a few months at least to fix up and shelve your store. You need electricians at $100 an hour. You need paint..well you can paint it yourself but you probably can spend 500 on paint for a store. To buy a real nice kitchen in a house can cost 10,000. You can downscale that and cut the cost in half, but what is a kitchen compared to a store? You need lots of displays and hooks..wouldn't surprise me if a 1500 sq foot store might cost 50,000 just to get some displays in there. You need a counter and a computer or cash register...better just get a computer because it will be cheaper over the long run with book keeping and inventory, so there's another $5000 investment. If you buy a woodcraft store, they give you their software and train you to use it, but for Don's store you have to figure all that out on your own and you must buy the software or get a huge fine when some employee turns you in...oh yea..you will need some of those employees. Can't do it all just Don and the wife, you have to sleep. So maybe Don's 2000 slum lord rental has 100,000 invested now just in layout, rent, fixtures and what not, everything it takes prior to bringing in the inventory. Oh..you got a forklift to unload the truck, or do you unload 45,000 lbs of supplies with spinach?:biggrin:
You need to get some inventory. You are not going to have the Woodcraft super deals straight from them..they have a whole warehouse one stop shop set up just for you with wholesale pricing, but Don doesn't get that, so you have to buy individual from each vendor..this is going to take awhile..more lost time and rent, and higher inventory costs. There is a ton of inventory needed and if 500,000 is your limit and you already spent over a fifth of that before you buy inventory...yikes! Go look at all the drill bits in your drawers in the shop. I have tons of drill bits for an average guy, but I have nothing compared to a store. You have bits from 50 cents to $50 for one darn bit! We all know that the tiny little do dad tools actually cost the most. In a store, that stuff doesn't require so much space, so you have a ton of cash in a small spot and when people walk in it looks like you have nothing. In your pen kit department...how much profit on a pen kit is there really..I doubt that much. How many pens do you buy for a grand...not that many unless they are just slims. At the woodcraft I go to they have about 20 foot by 4 foot all pen kits. I can't even imagine how much inventory cost is just right there. They probably have 10,000 in pen kits without including all the accessory items and blanks they have. All the hardware items in the store go on for isles and isles..and eventually you end up in a wood section which although it looks small, it is expensive wood which might have cost the store 20,000. And the big machinery...some tools cost $5,000 just for one. You won't have much inventory on 400,000 budget, so you will have to really stretch it out and limit the quantities of each item to try and give the illusion of having more than you do. Bottom line is that starting a business is serious business. I don't work for woodcraft, but I would bet that the $50,000 franchise fee pays itself back several times over during the life of the store..that is only a one time fee, and the benefits that come with it are huge. I think their franchise fee is one of the better franchise fee's in the country, when you consider the dollar amount and what they give you for benefits.
Yes...I have researched the Woodcraft thing for quite a while. I had thought about opening a store. It's a heck of a good deal what they give you. The negatives are the amount of cash flow you need to have and the amount of personal time you have to invest in the store, because the store will become your life, if it fails you fail. You can't slack off a minute when you own a business or you suffer big time for it. Opening a business is very risky and scary...too scary for me to do.
