Setting up a Hardware Business

Setting up a Hardware Business

Some time ago it was thought that large hardware chains would eventually make small hardware stores in the neighborhood disappear. However, time revealed that it was not.

On the contrary, many small hardware store They have grown and solidified and the key factor is probably the ability to provide personalized advice to clients beyond just selling a product or some accessories. As in any good business, solutions remain the cornerstone of success.

And is that when a person wants to repair the shower faucet by himself to save some dollars, many questions arise: how do I remove it? How do I replace it? What is the appropriate key i should buy? What will be the most durable brand? Etc. And if you find these answers in the master hardware store, then you have a profitable business insured.

The business idea of ​​the hardware store

Fundamentally we will say that the main role of this business will be the sale of construction materials and hardware accessories in general. It is clear that the more materials and solutions to be offered, the investment will be proportional.

Another variant that you can consider during business planning is the possibility of projecting your hardware store towards a specific line of products. For example, if your specialty is electricity, then you could set up a business entirely around solutions in electrical materials with the added value that you can provide better advice in the field and people will identify you that way.

Who can set up a hardware store?

This business is ideal for people who have some type of experience and general knowledge in construction, electrical installations, plumbing, blacksmithing and related topics. You don’t have to be an expert in everything, but you do have the ability to provide the right solutions to your clients.

Market overview

Hardware store customers are usually basically three:

  • Occasional customers looking for an accessory. They are usually the do-it-yourself clients.
  • Clients who have a small construction in process and who are looking for all the related materials for it.
  • Large clients whose construction projects might require similar amounts of materials (these, we will say, are the big guns). They are usually advised by engineers and professionals who will demand a higher quality of service.

Hardware competition

The high profitability of this business has made every day there are more competitors. Large hardware chains, supermarkets, and even traditional hardware stores all want a slice of this attractive profit pie. Which can be seen as something positive if we consider that there is always opportunity for everyone and if you analyze and study your market properly, you can undoubtedly find a niche where you can enter.

Commercial and sales plan

As always, it is convenient to have a strategy to be able to compete and sell more. So you must follow and put these tips into practice:

  • It is recommended to have showcases where you can display the variety of products that you offer. Although it seems obvious that you have a large assortment, consumers are very guided by sight and having a showcase will surely attract customers.
  • Your staff must be properly uniformed, clean and must also be trained to provide excellent customer service, but not least, excellent advice that adds value to your product.
  • Offers and promotions cannot be missed as they are an additional hook that we all need as customers. Post your promotions in the local newspaper, on flyers or banners that allow you to attract more customers.
  • A promotion strategy on facebook and social networks is always convenient and very low cost. Remember that nowadays many people look for solutions before on the Internet and then reach your premises so do not neglect this important market segment.


To choose the appropriate facilities for your hardware business you must consider several factors.

Increase. You should look for a winery that allows you to start with what you have planned but that at the same time has the possibility of growing. It is common to look for a small place with the intention of saving some costs with the inconvenience that when your business grows You no longer have where to expand and remember that storage space is important in this business.

Location. Ideal to find a location in a residential or executive development sector where there are many constructions since proximity is an important factor when choosing the place where your clients buy their materials. Another possibility is to locate in a residential sector where there are not many hardware stores, as this would supply a demand in the neighborhood. Everything will depend on your own market study and the projection you plan to give your company.

Furniture. Once the size of the premises has been determined and the initial business investmentYou must equip your business with everything necessary for its optimal operation. For this, it is recommended to make a list with all the essential furniture and then purify it with the most important things according to your budget such as shelves, counters, cash registers, administrative office, computers, telephones, advertising signs, delivery vehicle, etc.

Local. You should consider the rent of your premises and ensure a minimum contract of about 2 years that allow you solidify your business undisturbed. Likewise, you should consider within your costs the deposit of the rent and the costs associated with this procedure as guarantees and insurance that are extremely important for the protection of your investment.

Legalization of your company

You must also consider within your budget all the procedures for the assembly and legalization of your company such as accounting registrations, commercial register, licenses with the city council, printing of invoices, commercial patent, management and notarial expenses, etc. All these costs are associated with the type and company size you want to set up, either individual or corporation.

Initial investment amount

Estimating an exact amount is very risky, especially because at the beginning of the post I clarify that this is a business that can have many variants, which in turn have to do with the quantity and quality of the products that you want to provide in your hardware store.

However, we could roughly say that the initial investment for a small hardware store could range from 20,000 to 30,000 Euros. While a medium hardware store requires an initial investment of no less than 50,000 Euros.

Strategic aspects of the hardware business

Finally I want to highlight 3 determining elements for the success of this business that you should not overlook:

  • Deliveries and shipments. You must have the ability to ship materials at home as this is something that customers value a lot, especially without large products such as beams, sheets, sand, etc. It does not necessarily mean that you have to initially invest in a shipping truck but it does subcontract it to someone who does the freight for you. If the purchase is of large volume, I suggest providing this service at no additional cost for the benefit and satisfaction of your client.
  • Consulting. As I mentioned at the beginning, the added value of this business is that your staff can adequately advise the primary needs of your clients as this inspires confidence and invites them to return and recommend your business by word of mouth, which is the best advertisement.
  • Prices. Although it is very difficult to compete with prices, the recommendation is to have different brands and product qualities to be able to offer at least 2 alternatives to your client. The most comfortable in price and the most recommended in quality so that he is the one who chooses and always has something to take with him.

So, this is another one of those beautiful businesses that move the industry and give many people enormous opportunities for development.

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