Family Dollar is a popular dollar store chain in the United States with more than 8,000 locations in 46 states. Currently, it is not possible for an individual to open a Family Dollar franchise because Family Dollar does not offer franchise opportunities. However, it is possible to open another type of dollar store franchise or an independent dollar store.
Opening a Dollar Store Franchise
One popular way for entrepreneurs to open dollar stores is to become a franchisee of a dollar store. By purchasing a franchise, you build and operate your own small business while working with a well-known, respected brand. Dollar General is a popular dollar store chain that offers franchise opportunities.
Franchising typically requires an investment of $25,000 to $350,000 or more, depending on a range of variables. These variables include the store location, the chain with which the individual is franchising and the furniture and renovation requirements for the store. Benefits of operating a franchise include having the support of a large corporation and built-in brand awareness. Drawbacks include having to operate the business according to the corporation's requirements and potentially losing your business if the corporation goes out of business.
Opening an Independent Dollar Store
If operating a Dollar Tree franchise or another type of franchise store is unattainable or undesirable, you can enter the dollar store business by developing your own brand. By taking this route, you do not receive corporate support or the built-in brand awareness that comes from operating a franchise, but you have full control of all the business decisions for your store. You decide how to brand it, how to market it, which merchandise to carry, and what to charge.
Registering Your Business
Whether you plan on opening a dollar store franchise or an independent dollar store, you need to register your business with the Internal Revenue Service and with the board in your state that governs commerce. This could be the Secretary of State’s office or a Business Bureau, depending on where you are located.
Creating a Business Plan
A business plan is necessary regardless of the type of dollar store you plan to open. The business plan is a comprehensive document that outlines everything about your business, such as how it will operate, how it will cover costs, and how you plan to navigate your niche.
Your business plan should answer all the following questions:
- Where will the business be located?
- Will you rent or buy the building where your business operates?
- Is it strictly a brick-and-mortar business or do you also do e-commerce?
- How will you fund startup costs?
- Who is the business’s leadership team?
- What are the business’s projected operating costs?
- What are the business’s projected earnings?
- What is the business’s target market, and how is that market currently being served?
Putting a Business Plan into Action
After you have a business plan in place, the next steps involve putting it into action. If you don’t already have a location in mind for your dollar store, now is the time to find one. It is also the time to get any necessary permits for renovation work that has to happen before opening and to connect with the contractors who do that work.
Next, hire and train employees to hold key roles, such as store manager, shift supervisor and retail associates. If you’re opening a franchise, the corporation with which you’re working provides employee training materials. Additionally, that corporation aids in marketing your new store.
The last step to take before opening a new dollar store is to market it locally. Dollar stores are generally patronized by local shoppers looking for great deals, so market your store on neighborhood social media groups, with flyers around town, and through word of mouth.
- If need the SBA loan, be prepared to write a business plan.
- Always be forthright with the Dollar Store associate about financing; he is there to help you.
- Do not open a Dollar Store in your location if there are more than enough already.
Lindsay Kramer has been a full-time writer since 2014. In that time, she's experienced the ups, downs and crazy twists life tends to take when you're launching, building and leading a small business. As a small business owner, her favorite aspect about writing in this field is helping other small business owners and aspiring entrepreneurs become more fluent in the terminology and concepts they face in this role. Previously, she's written on entrepreneurship for 99designs and covered business law topics for law firms.