![How to plan and track the budget of your record store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-1_6ec602be-563d-4e7e-a3a1-738ced9d4e93.png?v=1715856511&width=1100)
If you don’t plan and track your record store budget properly, you're setting yourself up for failure.
When we developed our strategy pack for record 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 sales.
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 record store's finances around and set you on the path to success!
Get the budget tracker tailored for record stores
Most record store owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for record stores
Here is an example of a (very) detailed budget for a record store, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for store space | $3,000 | $36,000 |
| Electricity | Power consumption for lighting and equipment | $400 | $4,800 |
| 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 |
| Insurance | Property and liability insurance | $300 | $3,600 |
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 | $2,000 | $6,000 | $72,000 |
| Inventory Specialist | 1 | $2,500 | $2,500 | $30,000 |
3. Inventory Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Vinyl Records | New and used vinyl records | $5,000 | $60,000 |
| CDs | New and used CDs | $2,000 | $24,000 |
| Accessories | Record players, sleeves, cleaning kits, etc. | $1,000 | $12,000 |
| Merchandise | T-shirts, posters, and other store-branded items | $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 audio equipment | $200 | $2,400 |
| Uniforms | Staff uniforms and name tags | $100 | $1,200 |
| Licenses & Permits | Business licenses, music licenses, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $300 | $3,600 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some record stores make 5x more profit than you!
We have studied the strategies of the best record stores in the world. Replicate them now!
What are the biggest expenses for a record store?
Be mindful of these potential pitfalls. Here are five major costs every record store owner needs to consider, along with some tips on how to manage them effectively.
- Inventory CostsStocking your store with a diverse range of records can be expensive. Prices can vary based on rarity, demand, and condition. To keep these costs under control, focus on curating a balanced selection, negotiate better deals with distributors, and keep an eye on market trends. Avoid overspending by not overstocking or purchasing high-priced items that may not sell quickly.
- Staffing Your Record StoreYour employees are essential for providing excellent customer service and maintaining the store. However, wages, benefits, and training can add up. Optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. Be cautious not to underpay or overwork your staff, as this can lead to high turnover and a decline in service quality.
- Rent and Utilities of Your StorePrime retail locations come with high rent, but they can draw in more customers. Utilities like electricity, heating, and internet are necessary but can accumulate quickly. To manage these costs, negotiate favorable lease terms and invest in energy-efficient lighting and climate control. Overspending often occurs when you choose a location that's too large or too upscale for your needs.
- MarketingPromoting your record store is crucial, but advertising can be costly, whether it's through online ads, social media, 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 shelving and display units to sound systems and listening stations. These are significant expenses because quality fixtures and regular maintenance are essential for a pleasant shopping experience. Optimize by investing in durable, functional fixtures and maintaining them regularly to avoid costly repairs. You can overspend by opting for the latest high-tech gadgets that may not be necessary for your store.
How to spend less with your record store?
Here are practical tips to help you, as a record store owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Inventory Costs | Partner with local distributors and independent artists for exclusive deals and lower prices. |
| 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 record 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. |
| 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 recycling program for old records and packaging materials. |
| Technology | Invest in multi-functional devices and utilize inventory management software for tracking stock and sales. |
| Store Decor | Partner with local artists for unique, cost-effective decor and consider rotating displays to keep the store fresh. |
| 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 local musicians for in-store performances during off-peak times. |
| 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 record stores in the world!
There are record stores that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a record store
Yes, some expenses for your record store are just unnecessary. They don't contribute to increasing revenue or enhancing the customer experience.
| Record Store Expense | Reason It's Useless |
|---|---|
| Luxurious Store Decor | Overly extravagant decor doesn't necessarily attract more customers and can be a drain on the budget. |
| High-End Audio Equipment | Unless you cater to audiophiles, most customers are satisfied with mid-range audio systems for in-store listening. |
| Excessive Inventory | Stocking too many records increases inventory costs and can lead to unsold items. |
| Premium Display Fixtures | Top-of-the-line display fixtures 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 record 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 Vinyl Pressings | Using rare vinyl pressings 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 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 decor and layout can be costly and disrupt operations. |
| Expensive Store Displays | Elaborate displays are often ignored by customers and add to the cost. |
| High-End Store Fixtures | Luxury fixtures 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 Promotional Materials | Frequently redesigning promotional materials is costly and often unnecessary. |
| Unused Promotional Items | 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 Event Equipment | Specialized event equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your record store!
Managing a budget for a record store when funds are tight can feel like a nightmare. It's like being in a maze where any unexpected expense can throw you off track.
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 spend.
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 record stores just like yours. Get them now!
Make your record store more profitable
We have studied the strategies of the best record stores in the world. All their tactics are explained in our pack!
