Fitting out on a budget
Spend on what customers see and what you use every day, and not on the rest, for the first year.
5 min read
The fit-out is where opening budgets go to die. Every contractor has a better counter, every shop down the street has nicer lights, and every choice seems small on its own. Then the money meant for stock and the first months' rent is in the walls.
Spend in three tiers
Sort everything you want to buy into three lists, and spend on them in this order:
1. What makes the product. The oven, the sewing machines, the chairs a customer sits in for a haircut, the fridge that keeps stock fresh. If this is poor, the product is poor. Buy good, buy durable, and buy only what you will use from day one.
2. What customers see and touch. A clean, well-lit space, a clear signboard, a counter, a place to sit if they wait. This is how a stranger decides whether to walk in. It needs to be tidy and clear — not expensive.
3. Everything else. The back office, decorative finishes, a second display, branded everything. This list can wait for profits.
A useful question for every purchase: will a customer notice if this is missing in the first month? If not, it belongs in tier three.
Where the money usually leaks
- Built-in furniture. Custom carpentry fixed to the walls of a rented space stays behind when you leave. Movable furniture comes with you.
- Undoing the last tenant's work to redo it your way. Often what is there is good enough to use for the first year.
- Buying for the business you hope to be. Three chairs for a salon that will open with one stylist. A twenty-cover dining area for a kitchen that will start on delivery.
- The contractor's extras. Changes once work has started are where costs grow. Agree a written list and a price before work begins.
Do not let the fit-out eat into the money for the months before sales cover costs. A beautiful shop that runs out of cash in month three is a worse outcome than a plain one still open in month twelve.
Ways to spend less
| Instead of… | Consider… |
|---|---|
| New equipment | Good second-hand equipment, from a business upgrading or closing |
| Buying a costly machine | Renting or leasing it until you know you will use it fully |
| A full redesign | Paint, lighting and a good sign — the three that change the most |
| Paying for everything up front | Asking suppliers about instalments, in writing |
When you buy second-hand, see the machine running, ask why it is being sold, and get a bill. A bill is what proves you own it — and a bank lending against equipment will ask for one.
Get quotations, and keep them
Ask for at least two written quotations for anything significant. They keep prices honest, and if you are borrowing, the bank will want them in your project report.
Budget for the fit-out, then stop
Set a fit-out budget before you start, with a small cushion for surprises, and keep a running total as you spend. When it is reached, open — and upgrade later, from what the business earns, once you know what customers actually care about.
The tool below checks your idea against your city's market — what customers there pay and what competitors offer — so you know which part of the fit-out is worth spending on before you spend it.