Playtime is critical to children’s development, and toys can encourage imagination and problem-solving. To help provide future generations with ways to learn and be creative, why not open a toy store.

The value of the UK toy and games market will increase to £7.9 billion by 2026. It’s a growing industry, which means there’s plenty of potential for you to set up a successful business. 

This guide discusses how to start a toy store business, including:

  • Planning
  • Setup
  • Marketing
  • Management

Find out how to start a toy store business with everything you need


Before you set off on start your toy store business, you need to set yourself a strategy. That can help you make crucial decisions about your operation.


The first thing you need to do as a business is register its details through the UK government portal. But the process will depend on the type of legal structure you choose.

If you operate as a sole trader, you don’t have many responsibilities to share your accounts with the government beyond taxes.

Although, you are the same legal entity as your business. That means that you could be personally liable for any debts it has, meaning you could lose your assets (like your car or house) if you don’t have the money to pay them off.

To make your business a separate legal entity, set up a private limited company. You’d only be liable to lose the money you put into the business if it fails to pay its dues or goes bankrupt.

But as a limited company, you’ll report more information about your business to the government through a slightly more complicated process.


There’s a lot of competition in retail. Online stores, like Amazon, offer a wide range with quick delivery. So to draw people to your store, focus on something that online marketplaces can’t provide.

That could be the experience you offer to children and their parents who come into the store. If you leave a positive impression, they’re more likely to come back.

To focus on a specific niche, try to find a USP (unique selling point) that only you offer. That main draw could be that you only stock environmentally friendly toys and you have them available to try in store.


Opening your toy store isn’t cheap, so you might consider the option of seeking outside funding to help you start.

You can ask for a small business loan from a bank and agree to pay it back over time with interest. The terms can depend on your past credit history, and you’ll need to provide a business plan.

To put together a business plan, explain the reasons you’ll succeed and what you will do with the money. Include financial projections like a sales forecast to strengthen your plan.

A sales forecast is the amount you expect customers to spend multiplied by how many you estimate to attract. A forecast can give you a figure for a month, quarter or year.

Instead of a loan, you could also seek funding from angel investors. These are wealthy individuals who invest in small businesses in exchange for a percentage of ownership.

You also need a business plan to pitch to investors, and they can also offer more than just money. Angels often invest in industries they have experience in so could share advice and contacts with you.


With your plans in place, move onto the following building blocks of how to start a toy store business. Get everything you need in place so that you’re ready to open the doors.


You can’t have a toy store without toys, so a relationship with your suppliers should be an early consideration. They need to be companies that you can rely on to meet the demands of your operation.

To find suitable suppliers, have a process to vet each one before you begin working with them. 

Vetting can include checking their:

  • Capabilities — can they fulfil your orders or handle an increase if your sales grow?
  • Ethics — how do they treat their workers and what’s their environmental impact?
  • Customers — what experiences do their current clients have working with the company?
  • Finances — are they a business likely to face bankruptcy and leave you without supply?


You need to be able to receive stock and put it on your shelves, so the location of your shop needs to be accessible for deliveries. Perhaps you should look for a space that lorries can access.

In addition to your deliveries, customers should also influence where your store will be. A high street could be the perfect place to welcome new shoppers. Surrounded by other businesses, you can benefit from impulse purchasers.

It may depend on the size of toys that you sell though. For example, a town centre is ideal for small products but not larger ones. Things like outdoor slides will require customers to be able to park outside, since it would be difficult to carry far.


Before you can welcome customers, you need to protect yourself. There are a few types of insurance that you could use to cover you in different scenarios.

Some relevant covers include:


Getting the word out is crucial when it comes to how to start a toy store business. With the right advertising for your audience, you can connect with your customers and get them through the door.


If you operate in a crowded industry, a strong brand is the best way to help you stand out. But it can also play a significant role in whether or not people would be likely to return to you.

Branding is the public-facing identity of your business, and it helps people build a relationship with your company. Great brands are memorable, and they can encourage loyalty among their customers.

Your brand can include:

  • Name — what’s your business called? (e.g. Play Factory).
  • Logo — what icon represents what you do? (e.g. a teddy bear).
  • Colours — what three or four colours should people associate with your business?
  • Tone of voice — how do you speak to your customers? (e.g. friendly and conversational)

You can even decide to give your brand its own story. It would be a unique narrative that centres on you (the founder), the experience you offer, or the business aims.

A brand story could help customers understand your values and how they can relate to them, which gives you a more personal appeal than a corporation like Amazon. 

For example, you want to give all children the right to playtime, so you donate one toy to a poverty charity for every two sold.

Market research

To get your brand out there, find out as much as you can about your potential customers and competing businesses. To do that, conduct market research.

Your research could be direct, like interviewing or surveying the public. Ask people about themselves and see if they’re likely to buy toys for their children.

You can also question what they look for in a shopping experience, their lifestyles, and which social media platforms they use.

The competitors you have can also be an excellent source for your research. Check their websites and social media to see how they market their businesses. 

Even visiting other toy stores, you can compare the experience to look for the areas that work well and the kinds of people that visit.

Target audience

With all of the information you find in your research, you might find similarities between your potential customers. That can help you put together ideas of your target audience, which are the people your marketing needs to reach.

Common characteristics within your audience could be helpful to decide which marketing to use. You can use that information to put together customer profiles (sometimes called customer avatars).

A customer profile summarises a hypothetical person, which you can use to help you think about your ideal audience.

Customer profiles can include:

  • Names
  • Ages
  • Genders
  • Occupations
  • Lifestyles

Marketing channels

Knowing who your customers are helps you decide the marketing channels for your business. It’s essential to tailor your strategy around your audience to ensure your message gets to people likely to visit the store.

Social media platforms offer great ways to promote your business. But it’s essential to target families or parents rather than children. There are minimum ages for social media, so kids shouldn’t be on them unsupervised.

  • Facebook — create video, images or written content and use the local groups to find customers in your area.
  • Instagram — primarily visual, so images and video, where you can show off the experience that you offer in your store.
  • TikTok — create videos and show off your short business clips. Users swipe through lots of content, so grab attention quickly.


When you open up and invite customers, you also need to consider how you manage your toy store going forward. Many new business owners struggle with the financial side, but there is a way to make the process easier.

Countingup is a business account with built-in accounting software. It lets you access everything you need through your phone. Different features within the app could help you with specific areas of financial management.


There are costs throughout the life of your business, from setting up to marketing and day-to-day running. For example, you could have insurance, social media paid ads and utility bills.

As you get going and start to grow your toy store, you’ll likely have additional costs like increased supplies. Keep on top of your spending so it doesn’t start to affect your profits.

Countingup has an expense categorisation feature that can automatically sort and label your costs in your accounts. You can always see where your money goes and avoid surprises in your finances.


The operation of your business relies on you to have the funds available to keep the lights on and order stock. Mismanagement of your cash flow can lead to a  temporary closure because you don’t have the money to pay essentials.

Your cash flow is how you monitor the money going in and make sure it’s more than what’s going out. Any time your business is interrupted can mean that you miss out on potential sales.

Countingup has a cash flow insights feature to avoid issues impacting your business. You’ll be notified about the situations of your accounts through the app to keep you aware of your money.


Another potentially tricky task could be to calculate your income tax Self Assessments. It often means you look back over your year and work out how much you need to pay to HMRC, which can be time-consuming.

Countingup has a tax estimates feature, to tell you how much you should set aside each month. When it comes to the end of the year, you’re one step ahead with the money ready to go.

The Countingup business account with accounting software, could be the perfect tool to help you set up and continue to manage your toy store.

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