Setup costs are expensive for a record retailer and can be the biggest barrier to entry, which is why so many begin small. Leigh agrees: "You need a lot of money to sell new release records and do it properly from the start. You'll need a back catalogue and the mark up is very low.
"So for small folks starting off, small is really the only option. As I started off slowly my setup costs weren't that horrendous. Now with computers, internet sites and office equipment it can be quite costly, but if you get things as you need them and grow naturally it's much less stressful."
The typical cost to start up is around £10,000 plus, and that includes shop fittings (a cash till, record racks and a good, loud, sound system), stock and a website (you'll need one regardless of your likes and dislikes of the internet, see the internet section).
You'll also have to add staff and running costs to this, plus you'll need a Performing Rights Society (PRS) licence to play music in your shop (see contacts)
Stock unfortunately all has to be paid for up front but there's occasionally the offer of sale or return. Leigh says, "All my stock is bought and paid for (though you get 30 days' grace), and I do very little sale or return. The UK music distributors tend not to offer that option. It's only labels who you may deal with direct who may offer that."
Recognising the next big trend is where you can get an advantage over the chains. "The secret is knowing your market: read the media, watch the TV and read the obituaries - dead artists sell well. If Bob Dylan died it would be bigger than Christmas," says Montgomery.
But be warned, you have to get in early. "My worst mistake was not buying enough or not buying early enough and missing sales. Once you've missed it in the first four weeks, that's it. Plus if an artist fails then it's normally the third album where it goes wrong," he continues.
When you buy records you'll either buy them directly from the record labels or through a distributor. Some distributors provide something known as operating networks. The network system is a nationwide 'chain' of retail outfits that shops are invited to or elect to become a member of. Examples of distribution networks include SRD's Subterranean, Pinnacle's The Knowledge and Vital's The Chain With No Name. These networks cost shops nothing to join but commit them to buying a specified amount of stock every week or month.
The benefit to retailers affiliated with these networks is that they get special deals on product, have exclusive access to limited edition releases and formats and are allowed to take a certain percentage of releases on a sale or return basis.
A benefit to retailers signed to The Chain With No Name is that they get their names printed at the bottom of the Chain's adverts in the national music press, which can be used as a guide to seeking out record stores in cities record buyers haven't visited before.
Many distributors are orientated towards certain styles and genres of music, but there are numerous distributors in the UK alone and each occupies a particular niche in their respective market.
Alternative revenue streams are a good idea and may help you survive in a difficult market: another area in which you can do sale or return is selling tickets for local music events. Tickets for club nights and gigs mean you get publicity on any fliers, plus a steady stream of potential customers through your door, and you get to take a commission on any sales.
Putting on your own events is also a way of gaining extra revenue. But it's not unheard of for no-one but the band to turn up, in which case you make a huge loss. Music ephemera is also worth looking into, music books, posters, t-shirts, and turntable slip-mats are all lucrative extras, with much higher markups than the CDs of the artist.