Do you have a dream of starting your own business? Then, it makes sense to try retail. This is because retail is one of the easiest business to open. But what does it take to start a retail business? How can you make your dream of starting a retail business become a reality? This is the main reason for this piece.
Lot of initial work is required as you start your own business. With the right planning and determination you can achieve goal and make your dream come true.
The following are 14 critical steps that will guide you to starting your retail business.
- Choose Your Legal Structure
When starting your business, chose the proper legal organizational structure for your business. Would the business operate as a sole proprietorship, a partnership or a limited liability company? Be sure to discuss this with your lawyer and a business consultant for proper guidance and implication of your chosen option. While it is possible to change your legal structure as you progress, it can be a tedious and expensive process. Therefore, it’s better to make the right decision before you start your own business.
- Choose a Name
Thinking of a business name may come easy for some, and for others, it can be a struggle. Considering the condensed nature of social media and online searches, you may want to be careful to select a name that can communicate who you are quickly. Too often, retailers select a name that is clever to them or just a word or their name, but these become difficult for organic search traffic. The more it takes to explain your name, the more it will cost you to win business online. So when choosing a business name, you might want to choose a business name that clearly communicates your products/services. For example, a luxury business should most likely have a name with luxury in it. This way, it’s easier to be found when a customer searches for a luxury store.
- Determine Your Products or Services
When starting up a business, picking the right stock to sell in your store is the perfect balance you need. And for all products, services are needed to support them be it as simple as gift wrapping, repairs, etc. Always consider what “extras” your store needs to be successful.
Most of the time, the products you decide to sell are based on the ones you have a passion for and why you considered retail in the first place. But remember, buying products is 10 percent “eye” and right fit and 90 percent math. Getting it in your store is easy. Getting it out profitably is the hard part.
- Determine Your Channels
Every way a customer can do business with you is considered a channel. Will you have physical store? An online store? Or both? Will you do directory or phone orders? Will you have a mobile app/website? Retail is an omni-channel world today. Customers expect to be able to engage and buy from a retailer in numerous ways. You must determine what channels you will have for the customers to engage with you and grow a consistent brand, culture and experience through all of the channels created.
- Research and Know the Laws
Every country has their business laws. Understand what business licenses and permits you will need to obtain by contacting your relevant local, state or federal government offices. Before you start your own business, find out what laws govern your type of retail store. Consult with both a lawyer, an accountant, or a retail consultant as each will help with proper organization of your business.
- Define Your Customer Experience
In every step you take by far, this is the most important thing you can do. Millennial are telling us they still prefer to shop in a store (63 percent) rather than online. But they demand an experience that is different than what they can get online. They want the experience to be “worth the drive.” Too many retail businesses fail because they skip this step. They focus on products and store design and hiring and forget about the experience for a customer.
Defining what you want the experience to be like goes way beyond customer service. In fact, there are a ton of retailers who said customer service was their differentiation. Advertising service and experience and delivering them are too very different things. Defining your customer’s experience determines the types of products you must have and the types of services you must offer and the type of employee you need to deliver it.
- Write a Business Plan
Writing out a plan is a good way to ensure that plan doesn’t fail. The importance of writing a business plan is in the way it forces you to consider all angles and all areas of your business. It requires that you do extensive research and planning. This is one step you cannot skip. It will take you the longest time to complete, but there is a definite connection between the success of the store and a well-written business plan.
You should consider these key areas your business plan must address:
- Competitive Analysis (who is already in this business)
- Marketing Plan
- Customer Experience
- Employee Plan (who to recruit and why)
- Management Plan (hours, policies, etc)
- Financial plan (3-5-year projections)
- Find a Location
The location of your business is very important. Where you choose to locate your retail business will have a major impact on everything your shop does. The difference between selecting the wrong location and the right site could be the difference between business failure and success.
Picking the right location is critical. You must balance the best location with your budget, though. Don’t overspend to be in the perfect spot. Before you sign that lease, consider the second best location first.
- Establish Vendor Relationships
The success of your retail business depends on offering the right products, right price and the right time brings about a successful business. Therefore, it is paramount to the success of your business to be able to locate the best sources for those products. As you take this step to starting a retail business and decide what product line(s) you would like to sell, it’s then time to source for places to buy those items at wholesale.
Selecting vendors who will partner with you is very critical to your success. Selling your products is only part of the relationship. Funding, marketing support, returns, handling defective items, credit, and payments terms and dating are all part of what needs to be considered when choosing the right vendors for your store.
- Define Your Store Polices
The best time to establish policies and procedures for your retail business is during the planning stages. From your day to day operations, to special problems that would likely come up, this will help you in handling them properly. This also helps avoid making mistakes once you’re faced with customers. Spend lots of time training and role-playing with your employees on these policies. Make them easy so they can deliver the best experience.
- Craft Your Marketing Plan
Spreading the word before you open a retail store will go a long way. Create a retail marketing plan, brainstorm sales promotion ideas, begin branding and advertising your retail store. Learn how to use media publicity and sales events to the benefit of your retail shop.
Your marketing plan should focus your monies where your customers dwell. For example, for some businesses, social media or Facebook might be where the marketing monies should be spent. For others, it could be the newspaper or Magazines. Everyone will have a great deal for you. All advertisers will tell you they can get you exposure. But ultimately what you need is buyers, and that’s why you use mediums that your customers do.
- Recruit the Best Talent
The only way to deliver on customer experience is to have the right talent. Hire people who fit your culture. This may mean they don’t have a lot of retail experience of product knowledge, but those are things you can teach. Smiling, being upright and compassionate those are traits you cannot train; they must come with the employee.
- Soft Open
Before you open your store “officially” to the public, conduct a soft opening. A soft opening is when you are open for business, but without announcement to the public. It gives you and your employees a chance to do a “rehearsal” before the big day. I recommend at least a week for a soft opening, but take longer if you can. It is invaluable in its ability to flush out potential problem areas and customer experience detractors that you may not have foreseen. Fixing these things now before your grand opening means you are putting your best “face” forward when the marketing kicks in.
- Grand Opening
Never grand open until you are ready. You only get one chance to make that first impression so make sure all of your employees know how to handle all situations. Nothing annoys a customer more than an undertrained or ill prepared employee. Make sure every incentive, every sale, every sign, every product is ready to go in your store. Staff your store for crowds. It is better to have too many employees in the beginning than not enough. Make sure your employees can tell the “why” story of your store. Why shop with you over everyone else. They could give this commercial to every customer when they first engage your store.
Make sure every customer leaves your store delighted. A delighted customer tells his or her friends and that’s the cheapest and best form of advertising available.