Many people currently associate the word “retail” exclusively with internet stores. There is still a need for traditional stores, even as e-commerce grows and more merchants find success. Although most of these stores also have an online presence, there is still something special about actually being in a physical store that cannot be found anywhere else.
Several studies show that brick-and-mortar stores aren’t going anywhere anytime soon. It’s crucial to organize everything ahead of time if you want to launch a successful retail store. We chatted with experts in the field to learn more about how to launch a retail business.
Generate an Idea and Business Plan
Creating a company plan and a store concept comes first when venturing into the retail industry. The first step is to choose a specific type of retail establishment to launch. To help you out, I’ve included some questions below.
- What will your business sell?
- Who exactly is your ideal client?
- Where do you plan on putting your company’s prices?
- Who are the major players in the market that you must contend with?
- Who will be on your team?
While there are certainly many more considerations to be given, operating a retail store is not fundamentally different from opening any other type of business. Both your intended product/service market and its members must be identified. Having a store that caters to a certain demand in the community is crucial to its success.
Retail business management consultant and JHL Solutions founder Juli Lassow advises, “Know your competition.” It’s no longer possible to have a completely novel notion. You must know the alternatives your clients have besides you and what you’re selling. The option can be doing nothing at all.
Once you have a firm grasp on who you’ll be going up against, you may formulate a plan of attack. What is the likelihood that the pricing will be acceptable? in terms of quality? When it comes to service? about having a wide selection? Identify your unique selling proposition and emphasize it. Have the marketing and presentation skills to get that message across to your clients.
Understand your competitive advantage and what sets your business apart from the rest, as mentioned by Lassow. To succeed in retail, you need focus and a well-defined strategy. The most crucial part of starting a business is figuring out who you’ll be selling to and how you’ll help them.
As Lassow pointed out, a common risk of opening a store is getting lost in the crowd.
There is a danger of “blending in” in a competitive industry, she warned. These days, shoppers may find information about any product they’re interested in in a variety of different ways. The consumer is free to choose their preferred retail establishment. They can choose from multiple payment methods. You need to ensure that your retail product and advertising approach reaches your target audience. It has to hit a chord with them.
The availability of capital and the generation of new sales leads are two more fundamental elements of any successful organization. Do you anticipate needing a business loan? Investing capital: yes or no? Can you describe the various advertising mediums you plan to employ? Do you require dedicated social media marketing staff members on your team? Which platforms do your clientele frequent most often?
The company strategy should include sections dedicated to marketing and financial projections. Business loans and investor pitches are two good sources of potential funding. It’s important to have experience with online marketing platforms if you’re going into that field.
You should think about every possible expense. Identify potential fixed and variable expenses for your company. It’s easy to come up with a brilliant idea for a business, but overlook the tens of thousands of dollars it would need to put that plan into action. Researching the costs of having a physical store could lead you to the conclusion that you’re better off starting a virtual one first, and then using the money you make there to fund a more modest storefront.
Educating yourself on the expenses of inventory and other business necessities may also inspire you to think of fresh approaches. A successful retail store opening is the result of careful planning. It’s important to have a point-of-sale system and a mechanism to accept credit cards, for instance. In addition, you should budget for professional accounting software.
Choose a Name for Your Retail Store
Find a decent name for your company in addition to the other fundamentals of business planning. When thinking about how to develop a decent business name, you should consider a few elements.
- Meaning – The name should have some sort of resonance with the target audience. You want a brand name that is instantly recognized by consumers, even if its meaning evolves over time.
- Simplicity – Try to find names that are both brief and memorable. Names like Apple, Google, Facebook, and Nike are household names for a reason: they’re simple to say. The brand name should be memorable and easy to say, so if it is too long or complicated, consider changing it.
- Uniqueness – Choose a name that isn’t too similar to those already in use. Find a way, to sum up, your company in a way that is both unique and genuine. Don’t look at other brands for name ideas; come up with your own.
You shouldn’t put too much weight on a name when launching a retail establishment, but you should still give it some consideration.
Cover Your Legal Basics
Choosing a business structure, adhering to any restrictions, and acquiring the necessary licenses and permissions all go under the umbrella of “covering your legal essentials.”
Deborah Sweeney, CEO of MyCorporation, said, “If you are launching a retail store for your business, you will need a few typical business licenses and permissions in order to stay in operation and remain in compliance.”
Here are a few of the fundamentals:
- A permit from the appropriate authorities in the jurisdiction where your company is based to legally conduct business.
- An EIN, or employer identification number, is a nine-digit number issued by the IRS that certifies your legal right to hire and pay employees.
- A valid business license is required. The answer to this question is conditional on the nature of the products sold in your store. In order to find out if you need it, you need to contact the appropriate government agency in your state.
You take the same steps that other firms take when making the decision about their legal structure. However, becoming a lone proprietor in the retail industry might be dangerous. Consider a business structure that spreads the risk around rather than pinning it all on you personally in the event of a failure.
It’s not unusual for stores to form corporations or limited liability companies. Choosing either of those will lessen the risk that you’ll be held responsible for any damages.
Find the Right Location
Finding the appropriate location is crucial for any storefront business.
Your company’s success hinges on your ability to select a suitable retail location. The temptation to put up shop in a less expensive area and rely on word-of-mouth to bring in clients is understandable, but there are instances when there’s simply no substitute for being in a high-traffic area. It’s possible that choosing a location in the heart of town might cost more than one situated a few miles outside of town, but the influx of thousands of annual consumers would more than offset the difference.
“First-time retailers need to be aware of trying to save money on rent if they are not a true ‘destination retailer,’” said Bethany Babcock, founder of JHL Solutions Foresite Commercial Real Estate. “Poor access or inconvenient positioning in the center can keep clients away. The retail real estate business is very psychological, and the price [of real estate] is usually one of the last considerations for most retailers.”
Look at where your target demographic already spends time in order to pick the best spot. If your consumers live mostly outside of town, opening a downtown location can be more expensive and bring in fewer customers. Locate your storefront close to where your ideal customers hang out. While that tip may seem simple, businesses often focus on finding a location they think is fantastic, rather than trying to narrow down where their target market resides.
It’s possible that you have a second warehouse at another site. Additional storage may be necessary if you deal in a high volume of low-priced items and hence anticipate a large stockpile. It’s possible that some shops just offer a few of expensive things and so don’t need a huge storage area. When deciding where to store your inventory, keep that in mind.
Create a Personalized Experience
Finding success in retail typically comes from adding value that competitors are not. This is often accomplished through some kind of customization. Offering free samples is a key to success for many retailers. Whether it’s free samples at a food shop or dressing rooms at a clothes store, brick-and-mortar merchants can give tailored experiences like that, but internet shops struggle to achieve the same level of personalization. Is enhancing your company’s CRM a priority? Check out our best recommendations and reviews of applications that can help.]
Due to the ease of online shopping, brick-and-mortar companies must compete by providing unique benefits to their customers. Customers can be constantly attracted through personalization and a high-quality in-store experience.
“I think the biggest question an entrepreneur needs to ask himself or herself is simple: Can I provide the customer with a fresh experience?” —Marco Castelán, co-founder of Navio Group, a retail business consulting organization. It doesn’t matter that you are selling products that can be bought elsewhere – the largest way to differentiate yourself is by creating a unique experience for the customer since you are creating value that cannot be replicated.”
Location and square footage decisions should always be made with the customer in mind. Find a venue where you may build a unique experience that suits the model of your business and your clients. Customer satisfaction should be at the forefront of any in-store decisions.
Build Vendor Relationships
Developing relationships with vendors becomes critical when opening a retail location. It’s crucial for small business owners to constantly delight their clients despite the difficulties they face. In order to avoid any problems, it is important for business owners, especially those who run retail stores, to have solid connections with their vendors.
Establishing positive working ties with suppliers early on is critical to the long-term health of any firm. Using foreign suppliers makes this more challenging.
“The global supply chain is changing rapidly,” said Lassow. “It is challenging to establish worldwide relationships that will offer you the goods and services you need in light of the current trade uncertainty. To the extent that you intend to import goods from countries other than the United States, you should do it with help. Involve professionals in sourcing, logistics, customs, and taxation as part of your operations strategy.
Explore Marketing Opportunities
Successful retail establishments rely heavily on effective marketing strategies. If you run a successful e-commerce company and are considering opening a brick-and-mortar location, pop-up shops are worth exploring. These shops open in temporary locations for a short amount of time. Your apparel shop, for instance, may set up shop at the downtown festival for the duration of the single day’s festivities.
When you open a pop-up shop, you can attract new clients by bringing your business to them. Pop-up stores are a great way to see if the success of your online store can be replicated in a physical location.
Pop-up shops are useful even if you don’t currently have an online store. After establishing a permanent storefront, you can try holding temporary pop-up shops in other areas once every few months.
If you open a new store every few months in a town within twenty to thirty minutes of your current location, you might attract clients from that area. Clients who are enthusiastic about your wares may travel up to 30 minutes to visit your store, or they may opt to make their purchases online. In order to get people talking about your company for a short period of time (say, a few days or weeks), opening a “pop-up shop” is a great idea.
Opportunities for advertising can also arise through other channels, such as social media and in-store sales. Promoting discounts can be an effective strategy for attracting new clients. Offering discounts of up to 30% on specific items during the course of a holiday weekend, for instance, may encourage customers to visit your shop. There is room for innovation in the many advertising channels. On the 20th through the 24th of December, you may provide a 10% price cut on your products in the hopes of drawing in more customers.
On the flip hand, you may cash in on clients who are wanting to stock up on Christmas goods well in advance of the next holiday season by selling them at a discount from December 26 through early January.
Whether you’re trying to boost sales or boost brand awareness, you need to think beyond the box. Use innovative methods of promotion to get your message over to the public. Successful retail operations span a whole calendar year, and with that comes the need for consistent, high-caliber advertising.
Plan for a Grand Opening
When launching a new retail location, it’s important to make a huge splash. Your grand opening should be something to remember, but it doesn’t mean you have to break the bank to do it. Get in touch with the local press and announce your grand opening; free publicity can’t hurt, especially if the media covers the event. Convince the media that your store is an integral part of the neighborhood by giving them a pitch on its significance. When pitching journalists, be kind and respectful.
Publicize your store’s big opening on social media and other marketing channels weeks before it really happens, and the media will show up. Don’t hold people’s interest until the week before your grand opening. It’s important to make a favorable impression in the beginning and see success in the first few days of business. To do so, you must have a successful opening ceremony.
Your grand opening should be an occasion you take seriously to win over the local community, but it doesn’t have to be extravagant. Take timing into account. Unlike on a busy shopping day like Saturday morning, starting a store at 2 p.m. on a Tuesday definitely isn’t a great idea.
The big opening doesn’t make or destroy your firm, but you want your business opening to excite customers.
Conclusion
Before opening a store, it’s important to determine who you’ll be selling to. Once you decide who you’re selling to and what you’re selling to them, start looking for a location and checking off legal requirements. Once you’ve settled on a physical site and met any necessary monetary and regulatory requirements, you may begin exploring various advertising options. Plan a grand opening, and your retail operation will be open for business
