With the move to eCommerce, you would think that people would be hesitant to start retail stores. The good news is that retail is still around, and will likely be here in the future. Believe it or not, retail sales hit a record number of $6 trillion just a few years ago.
However, you're going to face more competition, both local and online. You need to do your research before you open a small retail business. Keep reading to learn seven things you should consider to make sure your new venture is a success.
1. Learn Who Your Customers Are
It's hard to sell a product if you promote it to people who have zero interest in buying it. If you go into retail sales and do this, you're going to burn cash faster than you can make it.
Figure out what problem or desire your product targets, and you'll be able to create a persona for the people who want to buy from you. Don't stop with one persona, either. You may end up with several once you finish the exercise.
You can use this information to figure out what products to buy or develop. Your customer persona can also be used to create more effective advertisements that will speak more to your potential customers.
2. Find the Right Location
It's all about your location when it comes to retail. You need to find areas where your customers hang out and have easy access to.
It might be tempting to save money when renting a storefront. The problem is that if you don't have foot traffic in your location, nobody is going to be able to find your business.
The good news is that you don't have to go to the highest rent location you can get. Just be sure that your store is visible when people pass by. If you don't, you'll have to spend more money than you need to if you want to find new business.
3. Figure Out Your Fixed Expenses
Running a retail store is more expensive than a lot of business ventures. You aren't running an online shop here. You're going to have rent and utilities to take care of.
It's also essential to buy insurance for your business. Every customer and employee who is on your property is a risk. If they have an accident, and you aren't insured, your company might be liable for any damages that occur.
Create a document that has all your fixed expenses for your company. You need to make sure you have the potential to make at least this much money during the month. If you can't, it's only a matter of time before you shut down.
4. Take Care of Administration Tasks
You can't just decide to open a retail store one day and get started immediately. There are some legal issues you need to take care of first.
To start, you need to create a company.
If you aren't planning on hiring a team, you can start with an LLC. It will provide you a way to separate your personal and business affairs. You'll also get an EIN to give to your partners.
If you plan on hiring people, an S-Corp might be a better option. It's a more traditional business structure. It will give you the ability to set up payroll for your team and calculate the taxes you need to pay.
5. Find Good Vendors
You aren't going to run a successful retail store on your own. You need to find the right people to buy from if your products are going to sell well. It doesn't matter if you create your product or resell other merchandise.
If you have a unique product, you need to find a vendor for materials or someone to manufacture for you. You need quality materials and a reliable manufacturing process.
If you sell other products that aren't good quality, you're going to lose customers—any products you buy to resell need to be top quality if you want customers to come back.
Your vendors also need to be able to meet your demand. If they have supply chain issues, you won't have the products you need to sell to your customers.
6. Use the Right Marketing
Marketing has changed a lot of the past decade. Businesses used to use radio spots, commercials, and newspapers to reach out to potential customers. Now companies head to the internet to find their market.
Start by setting up a website for your retail shop. You can use this page to tell people about your store and help them understand the value you bring. Connect it to social media sites to start connecting with people where they hang out online.
7. Put Thought Into Your Storefront
You can't throw a few shelves in your store and call it a day. You need to put thought into your store design. The more you do to create a smart storefront design, the more sales you're going to make.
You want to create an environment that helps your customers engage with your merchandise. Give your customers a way to smell, taste, and compare your products. They'll be able to make more informed buying decisions, which leads to more sales.
Research the top retail stores in the area. Take inspiration from what they do and apply it to your store.
If you're stuck, try to find a store design guide online. There are plenty of resources that will help you make the most of your floor space.
Starting a Small Retail Business Isn't as Easy as It Seems
You have a lot of work ahead if you're planning to start a small retail business. You're joining a competitive landscape of top retailers and are going to need a plan if you want to succeed. Follow the tips above to start creating a small retail business strategy that will lead you to success.
If you're trying to get new customers and not having any luck with your marketing, head back to our biz blog. You'll find our latest small retail business marketing tips that will help bring new customers into your store. Visit the Retail section of the Bootstrap Business Blog right now!
