The Small Business Impossible in New Jersey

Updated: Dec 18, 2019

"You guys should open your own store you would be so successful!" This is something we have heard a lot from our customers. Can you open and be successful with a brick & mortar location in New Jersey?

Currently we travel around the North East attending trade shows and art shows. We rent a space to participate in these shows that could be a week long to 1 day. We trailer our creations to every show and our setup takes around 2 hours to complete. Then we have to break everything down and pack back into our trailer. It's a lot of physical work. Then we get to do it all over again at the next show. We are extremely successful currently and have very little overhead.


So would opening your own location easier. You would think so. The promoters for these shows do a lot of marketing to bring customer to our shows. They often do Vendor spotlights showcasing vendors on their social media platforms connecting their followers with us. With a brick and mortar store we have to bring the customers to our store. We have to create the draw that makes them want to come and purchase products from us. Honestly I think thats the easier part. We can do that, we have the skills to do this!!! Ok, Brick and Mortar here we come!!!!!


Lets open a store its going to be amazing! Now looking at locations to rent in the Burlington County. We have many really nice areas and small towns with foot traffic that would make a great location for a store. If we are going to open a store, we would also need to move our current shop into the store so we can work and sell under the same roof. This means we need about 3,500Sf, half for work shop and half for studio space. The costs per square foot a year I found was between $14 - $28 depending on the location. If we rented a location for $14sf at 3,500sf that would cost $49,000 a year in rent. Then there is CAM ( Common Area Maintenance ) ,Triple Net fees and the type of lease you get (gross or net leases ) will determine what your final lease payment would be. We will use an example of a place we inquired about, The CAM and TRIPLE net fees came to an additional $5sf or $17,500 now totaling $66,500 a year in rent. Now this is just rent, we haven't opened the doors yet.


Now, you have a location signed a 3 year lease. Now you have to make the space function for you, buying furniture, painting, signage for out front and thats after you gotten approval from your township to open your business. Some of the other things you will need is Insurance, Internet, Phone Service, website, electric and maybe even a staff. How much is that? Not including staff let's say $10,000 to get the space to what you need to operate and another $16,000 a year for your monthly operating expenses. So where are we are at for yearly expense $66,500 rent, $16,000 operating costs, and one time start up $10,000. Now we are at 92,500 for the first year. We haven't opened the door yet. In order for me to feel comfortable I would want at least 2 years operating cost saved before we even considered opening a store.


Let's move in! After moving all shop equipment, furniture in, painting, advertising, stocking the shelves, and get the CO to open the doors We have our Grand Opening! Congrats. Its exciting, we have our own store and I wish anyone who does this great success. Now it's time to pay the rent and operating expenses, a monthly $6,875 expense. Of course not everyone need a space size like we do. To put this in an understandable size it would work out to be less that 60'x60' square. Yes its a large space but we need to move our current shop into the new store so we have a workshop and a retail area.


I have been looking at this option in New Jersey for awhile now. New Jersey is anything but a financial friendly state. Honestly the future isn't looking any better either. The bottom line is higher taxes, higher minimum wages, property taxes and anything else that increases impacts the small business success from start up. So many small businesses fail because they don't realize the actually costs just to keep the doors open and we haven't ever begun to talk about a profit. We have to make almost $100,000 a year even before we can begin talking about a profit.


There are so many small business owners I know aren't even making minimum wage, yet NJ wants to increase minimum wage. How are these business owner going to pay staff if they raise the minimum wage to $15 dollars an hour. Now what do you do with our employees currently making $15 an hour after you bump the minimum wage to $15 dollars an hour? Now the minimum wage person is making the same as a trained seasoned experienced person. Seems fair right. Not to mention everything you purchase for you business has increased in cost due to the labor costs have increased.

These small business will have to raise the cost of their products and services to compensate for New Jersey high costs. These high costs are passed down to Joe Custom and at what point does your customers stop shopping at your store because they aren't seeing the value?


These are just some of my thoughts. I do love New Jersey. The people running New Jersey honestly don't know how their actions and policies will always circle back and effect the little person.



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