19 Steps To Start A Small Retail Business
Changing your entrepreneurial hobby into a retail business can seem exciting. However, turning the hobby into a business can be overwhelming. It is a favorable market to invest in as there is an increasing demand from consumers.
But in actuality, tough competition prevails in the retail market. With E-commerce processes and technologies like Electronic Shelf Labels or direct response television advertising, the retail industry is evolving with every passing day.
But before taking such a huge step, there are certain things you need to consider that will impact your marketability and long-term profitability.
1. Consider your Location
A significant thing you need to focus on while putting up a retail business is an advantageous location. You need an area that proves to be an ideal set-up for your business but finding such a spot can be daunting.
While selecting the site or opening a new business location, you must consider things like parking availability, rent cost, and if you will get passing foot traffic on the site.
If you have a standalone store and sell an array of goods, then you need a spot with high traffic. But if you deal in niche and boutique products, you need a spot in a mall or plaza.
2. Know your Target market
To build a strong foundation, you must first identify your target consumer. Targeting a specific market doesn’t mean excluding the people who don’t fit your criteria.
Targeting a market means assessing and identifying your typical customer and tailoring your marketing pitch according to their requirement.
You must keep your financial budget in mind while planning your marketing strategies.
3. Plan for Transportation
Transportation, especially trucks play a vital role in the retail business which produces perishable goods, such as fisheries, poultry firms, horticulture, dairy, etc. Transportation services will help in carrying the perishable goods produced by such industries to the consumers living in different distant places in time.
Trucks carry raw materials to the factory for the production of the product and service. It helps in supplying the finished goods to the consumers.
If a proper transportation system is not established neither mass production nor distribution is possible. Therefore, you must consider buying or renting trucks that will help you with transportation.
These proven tips will help you in starting your small retail business. Your aim must be to achieve complete consumer satisfaction.
4. Assess your competitive factors
Starting with less or no competition seems like an ideal scenario. This scenario means that you have a vast market for your product or service, there is a demand, and the consumer can’t find it anywhere else.
But having no competition can also be a result of a lack of market demand, hurdles to entry, or failed attempts by other players.
Therefore, it is highly advisable to conduct a proper SWOT analysis and research on the weaknesses, strengths, and future threats and opportunities. This analysis will give you an understanding of whether or not you must carry on with the plan.
5. How do you Hire employees?
The sales force plays an integral role in creating an impression on the consumer. Therefore, hiring top talents who have initiative and problem-solving skills will increase the sales of your business and will keep the consumers satisfied.
There are a few things you must consider before starting the hiring process. Analyze the size of your store, if your product requires more personal selling, the pattern of the trade and its density, location of your business, and working hours.
These credentials will help you estimate the number of staff members your business requires.
6. Have a Legal perspective
You need to understand all the legal facts related to your organization. Figuring out the economic, social, political, legal, and environmental factors that impact your business will help you foresee the issues and find a preventive measure to such issues beforehand.
Reaching about the legal perspective provides you with information on subsidies which can be vital for your start-up.
7. Get Financial capital
When you plan to start a retail business, you either establish everything from scratch or go for a franchise.
In both scenarios, you need finance to start, keep inventory, market your product, manage the sales and maintain labor costs.
Financial capital is required to avoid cash flow problems and maintain operations. You should also ensure that your business stays afloat in times of decreased income, or increased expenses.
It is not expected from everyone to have such savings, so you can raise money from lenders or financial investors who are willing to invest in your idea.
8. Budget for Marketing and advertising
While setting up a new retail organization, you need to consider marketing strategies and advertising. You can do it by talking to communities to build brand awareness, using digital marketing tactics like websites, social media pages, or E-commerce.
Also, you can entice your loyal consumer by giving them rewards to create a core consumer base. You can go for traditional marketing tactics like organizing events, and advertising in local newspapers.
These marketing and promotions will create brand awareness and will increase the customer base.
9. Develop you brand
Your brand identity is the essence of your retail business, therefore consistent branding is essential for that. Work on the visual branding by creating a logo. You must give your store a unique name accompanied by a slogan.
Minor details like the storefront, fonts, signage, and color scheme create a significant difference in building your brand.
Always remember that your product or service is just one part of your business, the consumer also connects with the image of your brand.
10. Launch your online store
Your physical retail store might be doing exceptionally well but an online store will help you reach a larger audience geographically.
It will provide you with a platform through which you can interact and nurture your relationship with the existing customers.
Website building platforms provide you with tools and templates to help you design your ecommerce store. You can also hire a professional who can help you develop your website.
11. Team up with other businesses
Collaborating with other businesses is beneficial for any retail business. It allows you to get ideas from experienced businesses and provide additional feedback regarding your retail business.
Teaming up with a business help you in expanding your consumer base and provides access to additional resources.
A good business partner will have strengths that balance your weaknesses and make you look like an all-around perfect choice.
They will provide your retail business with ample motivation and support when it needs it.
12. Enroll as a Legal Entity
A legal entity is any person, business, or association that can lawfully join a contract with a different entity. An entity can engage in any business, own properties, sue others, and be sued.
To start a retail business, you have to choose between being an organization, a Limited Liability Company (LLC), or a sole owner. LLC is the most popular type of legal system for retail shops.
LLC charges are logical and it safeguards private properties and investments in the cases where you fail to repay a loan or are sued.
13. Supervise Your Financials
Irrespective of which legal system you select, it’s essential to use different accounts for your personal and business finances right from the start. If you have a reliable business account, it will be much easier to trace your incomes and expenses, which will enable you to stay on the right path financially.
Besides, you need to know that if your personal and business finances are kept in one account, it could cause a lot of problems if you have any issues with loans, or you get sued.
14. Carry Out Surveys for Your Retail Store
Asking for customer feedback is important. Surveys are a simple and useful way to obtain a ton of useful data. Well-recognized businesses normally utilize their consumer database to send out emails.
But in this case, where you do not have a customer database, there are other ways you can promote your survey, like targeted Facebook ads and local Facebook groups.
You can make your first surveys expansive and simply ask local consumers why they like their present best stores and goods.
As you are getting close to deciding on particular products, you can send out surveys to estimate consumer enthusiasm and response to certain products.
15. Try Investing in Accounting Software for Retailers
A lot of expenses are related to having a retail business such as goods and delivery, cost of advertisement, and employee wages.
You’ll need an accounting software program to help manage your finances.
Tracking your expenses and income correctly will enable you to see the exact revenue you’re making, determine your budget for purchasing products, and help you understand when your expenditures are high.
16. Get a Retail POS System
Selecting your POS system is a big step in the early stages of your retail business. They are software programs that bring together retail transactions and sales, and other management tools for business.
Everything you need as a retailer to manage your business is under one simplified platform.
A POS is easy to use, saves time, and gives extensive insights into your customers, employee, and sales data. Numerous POS systems offer essential payment processing which allows you to deal with one solution provider.
17. Invest in the Design of the Interior of Your Retail Store
After you’ve secured a location for your retail store, the next thing to do is to get the interior of the store designed.
Prospectively planning your store design is very important because it surprisingly has a spectacular impact on sales in the store.
A nicely designed structure will improve customers’ experience, and feel welcomed and help direct them toward certain products.
18. Select Small Business-Friendly Banks
There are unlimited options to choose from when it comes to a retail checking account. It is advisable to go for a bank that is small business-friendly with less fees.
Another thing to consider when choosing the right bank is making sure there are branches close to you. You’ll most likely be making cash deposits as a retailer, so reaching the bank should be easy.
19. Ensure Funding for Your Retail Business
Before you open a retail business, you need to know that there are a lot of things to take care of, and things to invest in.
You need to keep the money for the products you have to purchase, the POS system and payment processing hardware, advertise to show your business, pay your employees, invest in a grand opening, and renovate your business space.
It does sound expensive and to be honest, it is expensive, but you need money to get money.
To fund your retail business, you need to have a good amount of money to save up for you to personally invest. There are other retail business funding alternatives where you can obtain capital from external streams.
Establishing a retail business can be tough, but if it has a plan and execution strategy, then the size of your budget, your plan of action, goals, and strategies, and market survey are settled.
A business partnership established with good intentions can be beneficial for both parties and can help your business grow. Do these and nobody can stop you from achieving success.