![How to plan and track the budget of your leather goods store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-1_ba03ebf8-58f1-4077-bf4e-6589b78e5bfe.png?v=1715856519&width=1100)
If you don’t plan and track your leather goods store budget properly, you're setting yourself up for failure.
When we developed our strategy pack for leather goods 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 store's finances around and set you on the path to success!
Get the budget tracker tailored for leather goods stores
Most leather goods store owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for leather goods stores
Here is an example of a (very) detailed budget for a leather goods store, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for retail space | $4,000 | $48,000 |
| Electricity | Power consumption for lighting and equipment | $500 | $6,000 |
| 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 |
| Sales Associates | 3 | $2,500 | $7,500 | $90,000 |
| Stock Clerk | 1 | $2,000 | $2,000 | $24,000 |
| Security Guard | 1 | $2,500 | $2,500 | $30,000 |
3. Inventory Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Leather Goods Inventory | Handbags, wallets, belts, etc. | $15,000 | $180,000 |
| Packaging Materials | Boxes, bags, tissue paper | $500 | $6,000 |
| Cleaning Supplies | Leather cleaners, conditioners, etc. | $200 | $2,400 |
| Display Fixtures | Shelves, racks, mannequins | $300 | $3,600 |
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, magazine 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 | $100 | $1,200 |
| 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 leather goods stores make 5x more profit than you!
We have studied the strategies of the best leather goods stores in the world. Replicate them now!
What are the biggest expenses for a leather goods store?
Be mindful of these significant expenses. Here are five major costs every leather goods store owner needs to consider, along with some tips on how to manage them effectively.
- Inventory costsLeather and other materials can take up a substantial portion of your budget. Prices can vary based on quality, availability, and market demand. To keep these costs under control, focus on efficient inventory management, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by purchasing too much stock or opting for premium materials that don’t significantly enhance your products.
- Staffing your storeYour employees are essential, but their wages, benefits, and training can be costly. This expense is always significant because you need a dedicated team to provide excellent customer service and maintain store operations. Optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, avoid underpaying or overworking your staff, as this can lead to high turnover and poor customer service.
- Rent and utilities of your storePrime retail locations come with high rent, but they can attract more foot traffic. Utilities like electricity, heating, and water are necessary but can add up quickly. To manage these costs, negotiate favorable lease terms and invest in energy-efficient lighting and appliances. Overspending often occurs when you choose a location that's too large or too upscale for your needs.
- MarketingPromoting your leather goods store is essential, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we recommend in our guide. Overspending can happen if you invest in elaborate campaigns without a clear return on investment.
- Store fixtures and maintenance costsThis includes everything from display cases to point-of-sale systems. These are costly because quality fixtures and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient fixtures and maintaining them regularly to avoid costly repairs. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your leather goods store?
Here are practical tips to help you, as a leather goods store owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Partner with local tanneries for high-quality leather at competitive prices. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient equipment in your workshop and store. |
| Marketing | Run social media contests for your leather goods 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. |
| Display Fixtures | Purchase high-quality, durable display fixtures 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 material waste tracking system to minimize waste and recycle excess materials. |
| Technology | Invest in multi-functional crafting tools and utilize inventory management software for stock tracking. |
| Store Decor | Partner with local artists for cost-effective decor and consider reusable display elements. |
| Catalog Printing | Use digital catalogs or QR codes for product access to reduce printing costs. |
| 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 spoilage. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Music and Ambiance | Use a streaming service for background music and host local artists for in-store events. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
Copy the tactics of the best leather goods stores in the world!
There are leather goods stores that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a leather goods store
Yes, some expenses for your leather goods store are just unnecessary. They don't contribute to increasing revenue or enhancing customer experience.
| Store Expense | Reason It's Useless |
|---|---|
| Luxurious Storefront Displays | Overly extravagant displays don't necessarily attract more customers and can be a drain on the budget. |
| High-End Leather Brands | Unless you are a luxury boutique, most customers are satisfied with mid-range options. |
| Excessive Product Variety | A large inventory increases storage costs and can lead to unsold stock. |
| Top-Tier Equipment | High-end crafting equipment is 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 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 music or magazines often go unnoticed by customers. |
| Exclusive Leather Types | Using rare leather can inflate costs and complicate supply chains. |
| Costly Furniture | High-end furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Bags | Personalized shopping 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 Packaging | Most customers are content with standard packaging, making expensive options 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 decor and layout can be costly and disrupt operations. |
| Expensive Store Decorations | Elaborate decorations are often ignored by customers and add to the cost. |
| High-End Display Cases | Luxury display cases 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 Product Tags | Frequently redesigning product tags 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 Crafting Tools | Specialized crafting tools are often unnecessary and add to costs without a proportional benefit. |
Stop working with a tight budget for your leather goods store!
Managing a budget for a leather goods store when funds are tight can feel overwhelming. 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 new inventory or marketing efforts, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, pinching 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 resources to invest back into your business.
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 leather goods stores just like yours. Get them now!
Make your leather goods store more profitable
We have studied the strategies of the best leather goods stores in the world. All their tactics are explained in our pack!
