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Risk in running a departmental store

 Whenever, there is risk, there is a possibility of making profit. Like other business, there is some risk inherent in running a departmental business. Some risk can be avoided by carefully monitoring however some risk can't be avoided but can decrease it's severity. There are also different kind of risk in sense of damage, financial, health etc. Some risk are given below which should be considered before running a departmental store. There risk in running a departmental store has the potential to completely devasted the business.  1. Physical Theft: The store manager or the owner should aware that theft can be a problem to the business. This risk can be avoided by putting surveillance cameras, securities. 2. Fire: Hazardous items inside the departmental store should be avoided. In case of fire, it can bring extreme loss to the business. Hence safeties like water circuit breaker, fire extinguisher should be keep inside the store in an easily assessable place. 3. Payment default
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Cost and inventories of a Departmental Store

 Among the heavy initial investment business, Departmental store business is also one of it. Running a big Departmental may cost you more than crores in rupee. However, a small departmental store can start with a minimum investment of Rs 15 lakhs, which mainly focus on the highly demanded products such as kitchen items, foods and snacks, vegetables.

    If someone think that, Rs. 15 lakh is too much to start a Departmental Store business, then he or she can take a franchise of a big company and open the store. 

    For starting a departmental store business, there may be many hidden cost which one should carefully check out and try to reduce it. If not carefully observe, the expense may over lead the profit. Some expense which can be mentioned are cost of electricity, maintenance, employee, tax, donations etc.

    The real cost of a Departmental store business comes with the cost of inventories, cost of construction, furniture, machineries, transport vehicles etc.

    For the minimum investment of the Rs 15 lakh, if you are running the store in someone's place and your are paying monthly rent, the monthly rent could be Rs. 10,000 - Rs. 20,000 in some semi urban areas (things may get expensive in case of urban). Usually cost of construction or retouching the place along the furniture can cost you up tp Rs. 2-3 lakhs. And the around Rs. lakhs should be invested in the inventories. While buying the inventories, the owner should focus on the fast moving products in order to maintain the liquid cash. Both the payable account and receivable account should be properly maintained to build the stocks.

    When it comes to the inventories, diversified inventory management system can be adopted by the store owner. Some of the inventories management include FIFO (first in first out), LIFO (last in last out) or weight average. Pilling up the inventories may cause decline in the profit of the business.

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