No direct experience, but have helped a family member start up a business and invested in a few restaurants.
Figure out how much money you're comfortable losing first. That is, assume it's a complete failure after a year or two, how much of your retirement savings or income are you willing to set on fire?
Use that number to figure out a realistic budget for starting up a retail space.
If you don't want the monthly burn rate of a leased storefront, maybe start with a stall at some shared selling space.
The family member started by building up a reputation for their work out of a shared studio and after many years finally broke out and rented their own space. They were initially swamped by licensing regulations and restrictions placed on the business by the landlord after they'd signed the lease (like, the landlord wanted to restrict the number of people in the space because he'd "heard things" about tattoo parlors). Lesson: get a sense of all of the regulations and laws and jurisdictions that are going to intersect with the business ahead of time. In this case they family member was surprised that the city, county, and state had conflicting regulations that they were expected to abide by.
With the restaurants the two biggest lessons were: everyone always underestimates how much it will cost to build out the space. Everyone. Four restaurants (two still active) and every single one blew out their budgets for the initial renovations, requiring either new capital contributions or debt or both. To a lesser extent my relative encountered the same thing. And it's easy to observe from the side and say "well, duh, that's how all projects are" but if you've never done it there's no reason to doubt the contractor saying it'll take $100k and ninety days to do the work you've laid out.
Second: there's no safety net except what you set aside. Generally true for all businesses but larger businesses can usually get lines of credit or other debt instruments. Covid was a remarkable black swan that the restaurants only survived (in some form) with government intervention. At best each had 30-60 days' cash (one of the first things their banks did was freeze any outstanding debt/financing lines once the impact of Covid started to take shape).
I'm semi-retired and keep toying with an electronics store front ala Heath Kit or Radio Shack classic. Thing is, every time I run the numbers it barely breaks even, and this is in NYC where it's easier in many ways to run highly targeted retail store fronts. And I just can't run the risk of burning a couple of years of retirement funds on a lark that at best breaks even.
Figure out how much money you're comfortable losing first. That is, assume it's a complete failure after a year or two, how much of your retirement savings or income are you willing to set on fire?
Use that number to figure out a realistic budget for starting up a retail space.
If you don't want the monthly burn rate of a leased storefront, maybe start with a stall at some shared selling space.
The family member started by building up a reputation for their work out of a shared studio and after many years finally broke out and rented their own space. They were initially swamped by licensing regulations and restrictions placed on the business by the landlord after they'd signed the lease (like, the landlord wanted to restrict the number of people in the space because he'd "heard things" about tattoo parlors). Lesson: get a sense of all of the regulations and laws and jurisdictions that are going to intersect with the business ahead of time. In this case they family member was surprised that the city, county, and state had conflicting regulations that they were expected to abide by.
With the restaurants the two biggest lessons were: everyone always underestimates how much it will cost to build out the space. Everyone. Four restaurants (two still active) and every single one blew out their budgets for the initial renovations, requiring either new capital contributions or debt or both. To a lesser extent my relative encountered the same thing. And it's easy to observe from the side and say "well, duh, that's how all projects are" but if you've never done it there's no reason to doubt the contractor saying it'll take $100k and ninety days to do the work you've laid out.
Second: there's no safety net except what you set aside. Generally true for all businesses but larger businesses can usually get lines of credit or other debt instruments. Covid was a remarkable black swan that the restaurants only survived (in some form) with government intervention. At best each had 30-60 days' cash (one of the first things their banks did was freeze any outstanding debt/financing lines once the impact of Covid started to take shape).
I'm semi-retired and keep toying with an electronics store front ala Heath Kit or Radio Shack classic. Thing is, every time I run the numbers it barely breaks even, and this is in NYC where it's easier in many ways to run highly targeted retail store fronts. And I just can't run the risk of burning a couple of years of retirement funds on a lark that at best breaks even.