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How to Open a Stereo Shop

by David Lipscomb, studioD

Running a stereo and home theater shop remains a lucrative business, even as Internet sales bite into revenue streams. Opening a stereo shop requires a lot of preliminary information -- and start-up income -- to ensure near-term and future success. If you have a passion for the gear and the industry, immersing yourself in this business might be your career dream come true.

Research your target store location. Certain areas in every city have different ascribed values for commercial locations. Although your target demographic may live in an upscale part of town, the rent for a store is likely to be higher than if it is on the outskirts. Use online services to research stereo shops in your target market, including location of competitors and data regarding real estate values. Such sites include Zillow.com, Google Maps, City-Data.com, ZIPSkinny.com and more. You should also include governmental tracking sites in your research, such as the Department of Labor Statistics resources.

Determine who your customers are. Established households tend to focus on home theater, automation and convenience, while younger individuals might focus on car and portable audio. Plan to tailor your shop's layout, marketing and inventory accordingly.

Retain an accountant and attorney. Some states won't let you operate without retaining legal representation and you probably don't want to manage your own financial accounting system.

Assemble a detailed business plan, which you need to present to a bank to get a loan. Open your business banking account at the same branch.

Research other local stereo shops to find out how they price items similar to those you will carry. Do likewise for any custom installation or labor rates, since this is often the determining factor when clients choose one business over another.

Acquire your operating license. You need to get your sales tax, employer identification number and business license from your secretary of state.

Identify your vendors. Multiple wholesalers often sell the same or similar products, but their responsiveness and service is not always equal. If you came from another retailer in the same industry, you probably know which ones are reliable and what products they carry. However, if you're coming from the hobbyist arena and do not know, contact business owners that carry similar stuff. Go out of state so they won't view you as a competitor, asking freely who is reliable and who isn't. Most stereo shop vendors operate within a multi-state region, so this data remains relevant to you -- as long as you both share the same region. Also, ask for samples or product demonstrations, gauging their friendliness and timeliness to the request. You can also get international vendor quotes from Web-based sources like Tradekey.com, Alibaba.com and Aliexpress.com among others. You can even purchase credit reports and ask for bank statements for further peace of mind. The process can sometimes be trial and error, but finding the right vendors helps you get the right mix of products at the best terms.

Advertise your business. Get in touch with media outlets that serve your targeted market demographic. Inquire about reduced advertising rates for new businesses, or an initial trial period. Many local publications, in particular, let new businesses do this to get established.

Assemble a sales staff. Unless the shop is very small and you plan to go it alone or with a partner, you'll need to find experienced and enthusiastic personnel well-versed in the products and services you plan to offer.

Items you will need
  •  Business license


  • Limited liability companies, or LLCs, offer a certain amount of protection to sole proprietors. This means you aren't completely on the hook for all financial liabilities incurred by the business, other than your initial investment in the company.

About the Author

David Lipscomb is a professional writer and public relations practitioner. Lipscomb brings more than a decade of experience in the consumer electronics and advertising industries. Lipscomb holds a degree in public relations from Webster University.

Photo Credits

  • Polka Dot Images/Polka Dot/Getty Images