Needing more money: explained by The Gilded Age 💰

A couple weeks ago we talked about why people lose their ever-loving minds and try to Mortal Kombat us when we tell them they’re going to need more money to open their brick and mortar business. 

So today we’re taking it one step farther and discussing one of the biggest reasons why it costs way more to get open than people often expect: brick and mortar businesses require certain up front expenditures that you absolutely, positively have to incur whether you want to or not. 

It would seem that the amount of money you spend would be entirely within your control – that if you’re scrappy enough, you can always make something work within your budget. To some extent that’s true; bigger, fancier concepts will cost more money than smaller, simpler concepts. But even the smallest and simplest brick and mortar businesses have a core set of expenses that cannot be avoided, value engineered or bought used off of Facebook Marketplace. 

Think about it this way…

Let’s say you want to make banana bread. There are a handful of ingredients that comprise any banana bread recipe, and while the core ingredients are fixed, you can flex a lot on the quality or sourcing of those ingredients to suit your budget. Consider these two options (but don’t try them at home – they’re not real recipes): 

🍌 Mrs. Bertha Russell’s Banana Bread

Mrs. Russell sends her cook, Mr. Borden, to Whole Foods to buy ingredients

• 3 organic bananas
• 1 stick of grass fed butter
• 1 cup organic fair trade cane sugar
• 2 cups organic small-batch milled flour
• 2 large organic, cage free, local farm eggs
• 1 tsp organic Madagascar vanilla extract

🍌 Bridget the Maid’s Banana Bread

Bridget takes the city bus to the nearest Walmart Supercenter

• 3 bananas
• 1 stick of butter
• 1 cup white sugar
• 2 cups all purpose flour
• 2 large eggs
• 1 tsp imitation vanilla extract

Clearly, while Bertha Russell’s version costs probably three times (at least) more than Bridget’s, both versions require the same items: bananas, eggs, sugar, etc. And now that we’re all hungry, I’ll explain the analogy…

No matter how small her budget is, Bridget can’t just say, eh, I don’t really need the eggs. She can’t make banana bread without all of these items even if she really, really wants to. None are optional. Same goes for whatever brick and mortar business you are opening. There’s a hard minimum to opening up shop, and it’s usually higher than you’d expect. 

Regardless of your concept, you absolutely, positively must spend money on a lot of not-optional stuff:

• Security deposit paid at lease execution

• Exterior signage (which is ridiculously expensive FYI)

• Resale inventory or ingredients

• Pre-opening staff training wages

• Insurance binders, permits, and utilities

• Sharpies and trashcans and toilet plungers and mops
• And so much more…


Can you work to get these costs as low as possible? Of course. But you can’t choose to skip them because you weren’t planning to spend money on them. Unlike the window in my bedroom that may now be irreparably damaged, you can’t force open your business by sheer will and a “can do” attitude.

That’s why the Capital Budget we make in Dream Space is so important. Seeing in black and white all the costs added up, then feeling the futility of not being able to squeeze them down any lower is a critical rite of passage – seeing the truth, reluctantly embracing it, and then making a plan.