I think another couple of things to think seriously about are:
#1 is there a competing hobby shop nearby? A corrollary question is what is the population of the area where you want to have your shop? A larger population might be able to support more than one hobby shop if they are not too close together.
#2 What is the train interest in your area as regards to scale or gauge? A case in point is my local hobby shop. Most of his train sales are in ho or n scale, but the owner loves Lionel. Lionel is not very popular in Southern California because it isn't as practical for a garden railroad as large scale, and we don't generally have basements. Also, Lionel has pretty much priced themselves out of the children's first train set market, except for a few sets. In addition, there is one modular railroad club in the area running Lionel called the Tin Plate Trackers, and one of their members owns a train store in Anaheim just 5 miles or so away. The owner of my local shop bought a bunch of Lionel locomotives that are very high $$$ models and they have been in the same glass case for 6 years or longer! The guys working in the train dept. look at all of that Lionel inventory that is having birthdays, and think of extra ho or n scale inventory that they could stock and move if the resources were not tied up in Lionel stuff that isn't selling. Recently, he has discounted the Lionel locomotives by 25%-35% to get rid of it and is see more and more space becoming available in that case where the Lionel stuff resided. I'm presuming that once the Lionel stuff has been cleaned out, he will probably more ho or n scale stuff. You need to know your market in your area. You want to stock what people want to buy, and avoid expensive items that will sit on the shelf for years.
Another thing that my local hobby shop used to do, that may not be practical or possible since Horizon bought Athearn & MDC, is to buy unpopular items from distributors at steep discounts, and be able to sell those items cheap. Back when Athearn was independent, distributors had to buy some of each road name when they ordered Athearn locomotives. They could never get enough Santa Fe, Southern Pacific, or Union Pacific, New York Central and Pennsy sell ok here, but most other East Coast road names won't sell here in So Cal. I often wondered if there were East Coast distributors stuck with Santa Fe, U.P. and S.P. equipment, but who couldn't get enough of the Eastern road names? The owner bought cases of Athearn gp40-2 powered locomotives painted for Conrail at such a discount that he was selling them for $10.00 each and making a profit. He still had more left over, so for a while he was offering a powered Conrail gp40-2 for $1.00 with the purchase of any other locomotive at the regular price! I have an early Atlas Rs-1 that I got from them for $39.95 because it was decorated for the Southern Railroad. If it had been painted in Santa Fe colors the price at that time was $89.95 after his normal discount.
This brings to mind another point. You probably won't be able to compete with the monster national mail order discounters like Train World in price; but if you do a business plan where you think you will sell everything at list price, you will probably not succeed. You are going to be competing against mail order and internet hobby shops who will discount. Give you local customers discounts on popular items. I think the typical wholesale price is @ 45% less than the list price. If you can sell it with a 20%-30% mark up, you are giving your customers a break and the advantage of being able to look the model over and take it home the same day. I would also sell mail order via the internet. Ads in the modeling mags are expensive and I'm not sure what return you get. I think a web site and perhaps supporting places like this forum are probably a better "bang for the buck" advertising choice.
One other thing my local hobby shop offers is a 10% discount to members of local model railroad clubs or the NMRA. This discount is not offered on items that are already discounted like locomotives and rolling stock, but is offered on things that are normally sold at list price like detail parts and Kaddee couplers.
Also put in a test track. Talking with the guys at my local hobby shop, they have told me that Athearn is the most reliable locomotive out of the box. They very seldom have problems with them, perhaps a 10% failure rate. When they get a new shipment of locomotives in stock, the test run every locomotive and send back any that don't work correctly. Aproximately 25% of the locomotives they get from Kato, Atlas, P2k, Bachmann, or BLI gets sent back for not working.
This post has gotten a lot longer than I planned. I hope it is helpful.