![How to plan and track the budget of your hardware store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-1_c6dbebde-d128-4f66-be14-56ea60f25bce.png?v=1715856520&width=1100)
If you don’t plan and track your hardware store budget properly, you're setting yourself up for failure.
When we developed our strategy pack for hardware store owners, we saw a lot of store owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your hardware store's finances around and set you on the path to success!
Get the budget tracker tailored for hardware stores
Most hardware store owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for hardware stores
Here is an example of a (very) detailed budget for a hardware store, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for store space | $4,000 | $48,000 |
| Electricity | Power consumption for lighting and equipment | $600 | $7,200 |
| Water | Water usage | $100 | $1,200 |
| Internet & Phone | Internet service and business phone | $150 | $1,800 |
| Waste Removal | Garbage and recycling services | $100 | $1,200 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Store Manager | 1 | $3,500 | $3,500 | $42,000 |
| Assistant Manager | 1 | $2,800 | $2,800 | $33,600 |
| Cashiers | 3 | $2,000 | $6,000 | $72,000 |
| Stock Clerks | 2 | $2,000 | $4,000 | $48,000 |
| Customer Service Reps | 2 | $2,200 | $4,400 | $52,800 |
3. Inventory Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Tools & Equipment | Hand tools, power tools, etc. | $15,000 | $180,000 |
| Building Materials | Lumber, cement, etc. | $10,000 | $120,000 |
| Hardware | Nails, screws, bolts, etc. | $5,000 | $60,000 |
| Paint & Supplies | Paint, brushes, rollers, etc. | $3,000 | $36,000 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $200 | $2,400 |
| Safety Gear | Gloves, helmets, goggles, etc. | $500 | $6,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $500 | $6,000 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of store equipment | $300 | $3,600 |
| Uniforms | Staff uniforms and aprons | $150 | $1,800 |
| Licenses & Permits | Business licenses, permits, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some hardware stores make 5x more profit than you!
We have studied the strategies of the best hardware stores in the world. Replicate them now!
What are the biggest expenses for a hardware store?
Be careful with these pitfalls. Here are five major costs every hardware store owner needs to consider, along with some tips on how to handle them wisely.
- Inventory CostsThese can take up a significant portion of your budget. You're dealing with a wide range of products, and prices can fluctuate based on demand, supply chain issues, and quality. To keep these costs in check, focus on inventory management, negotiate better prices with suppliers, and minimize overstock. Finally, it's easy to overspend by buying too much or opting for high-end products that don’t add enough value.
- The staff at your hardware storeYour staff is your backbone, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need knowledgeable employees to provide good service and keep things running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor service.
- Rent and utilities of your hardware storePrime locations come with high rent, but they can attract more customers. Utilities like electricity, heating, and water are essential but add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too big or too fancy for your needs.
- MarketingYou need to get the word out about your hardware store, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we give in our pack. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Store equipment and maintenance costsThis includes everything from shelving units to point-of-sale systems. These are expensive because quality equipment and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your hardware store?
Here are practical tips to help you, as a hardware store owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Inventory Costs | Partner with local suppliers for bulk purchases and negotiate better rates. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient HVAC systems. |
| Marketing | Run social media contests for your hardware store and collaborate with local influencers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers bringing their own bags. |
| Tools and Equipment | Purchase high-quality, durable tools that can withstand frequent use. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a recycling program to minimize waste and donate excess materials. |
| Technology | Invest in multi-functional tools and utilize inventory management software for stock tracking. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce overstocking. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Music and Entertainment | Use a streaming service for background music and host DIY workshops during off-peak times. |
Copy the tactics of the best hardware stores in the world!
There are hardware stores that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a hardware store
Yes, some expenses for your hardware store are just unnecessary. They don't contribute to increasing revenue or improving customer experience.
| Hardware Store Expense | Reason It's Useless |
|---|---|
| Luxurious Store Fixtures | Overly lavish fixtures don't necessarily attract more customers and can be a drain on the budget. |
| Premium Tool Brands | Unless you cater to a niche market, most customers are satisfied with mid-range options. |
| Excessive Product Lines | A large inventory increases storage costs and leads to more unsold items. |
| High-End Display Units | Top-of-the-line display units are not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your hardware store. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or software often go unnoticed by customers. |
| Exclusive Product Lines | Stocking rare or exclusive products can inflate costs and complicate supply chains. |
| Costly Store Furniture | High-end furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Bags | Personalized bags are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating store layout and decor can be costly and disrupt operations. |
| Expensive Store Decorations | Elaborate decorations are often ignored by customers and add to the cost. |
| High-End Tools for Display | Luxury tools for display are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Signage Designs | Frequently redesigning signage is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Rental Equipment | Specialized rental equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your hardware store!
Managing a budget for a hardware store when funds are tight can feel like a nightmare. It's like being trapped in a cycle where any unexpected expense can throw you off balance.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest back into your store.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of hardware stores just like yours. Get them now!
Make your hardware store more profitable
We have studied the strategies of the best hardware stores in the world. All their tactics are explained in our pack!
