Thrift stores serve a range of purposes, including providing low-cost secondhand goods, serving as places for people to donate old clothing and household items, and offering funding to the organizations that operate them. If you want to establish a thrift store you'll need to go through the process of setting up your operation as either a nonprofit or a business, though each process requires a similar amount of time.
Start-up Time Line
Regardless of whether you start a thrift store as a for-profit business or a nonprofit organization, the entire process can last for several months or, in some cases, more than a year. In the first few months you'll need to apply for and receive the necessary paperwork from your local government. Next, you must find a site for your thrift store, sign a lease and prepare the store to open. Just the process of collecting merchandise to sell and hiring staff can last several months. Planning ahead can save you time and allow you to open your thrift store within a year, including the time it takes to receive formal approval to operate.
Nonprofit Thrift Stores
To establish a nonprofit thrift store you must file Form 1023 with the Internal Revenue Service. The IRS uses this form, which describes your thrift store, to grant you nonprofit status, exempting you from income taxes and requiring you to invest your earnings in the community in a way that serves a public need. Approval can take up to six months, according to the University of South Dakota. During this time you can prepare other aspects of the store, such as identifying grant opportunities to fund your thrift store, identifying potential locations and gathering merchandise for stock.
Establishing a Business
Another option for starting a thrift store is to do so as a for-profit business. You may promote your store as a place for people to recycle their unwanted items, or work with a local community organization or charity but retain a portion of the profits you make for yourself. In most locations this means you'll need to apply for a business license. Some cities, such as Kansas City, Missouri, allow business license applicants 90 days to submit all of their materials, meaning that the process, which includes a review by the city council, may take several months.
Ongoing Time Line
With careful planning you should be able to open your thrift store's doors within a year of starting the process. However, the start-up time line is still not over. You'll need to periodically renew your business license and perform audits to ensure that you comply with tax exemption standards. According to "Entrepreneur" online, the first five years of a new operation are a time for initial growth, after which you may consider expanding and establishing your thrift store as a fixture in the community. If you experience trouble getting started, you may need to reevaluate your business plan and take a step back to make sure your thrift store is sustainable.