Things look good for retailers this holiday season. Nearly 190 million U.S. consumers shopped from Thanksgiving Day through Cyber Monday this year. That reflects an increase of 14 percent over last year’s sales numbers according to the National Retail Federation. And most retailers are small businesses. So the future looks good to get your share of the retail pie — if you do it right. Of course, 20 percent of business startups don’t survive past the first year in business. So take the proper steps and you will make the difference between success and failure.
How to Open a Retail Store Checklist
Have you always imagined owning your own store? Check out our how to open a retail store checklist.
Step 1. Do Your Homework
Got a great business idea? You can have the best idea on earth but if you don’t have a market to sell to, you’re definitely starting off on the wrong foot. Find out as much as you can about your target customers including age, location, shopping behavior patterns and more. The government is a great source of information. Explore the Census Bureau data page for key numbers and research websites like Pew Research for surveys and trends. Have a retail idea for specific city, check with the city’s business and economic development office for local demographics.
Step 2. Create a Business Plan
You’ve, of course, heard stories about successful entrepreneurs whose business plans were merely scribbles on a napkin, but those tales don’t really work for most entrepreneurs hoping to make a new retail idea take off. That’s why a business plan should be the next step on your how to open a retail store checklist. A business plan not only gives you clarity about understanding about how your business will be organized, it can help you make smarter financial and management decisions.
Plus, if you need investors or bank loans, the business plan will be the first thing they ask for. A business plan is a dynamic document that should be adapted and modified throughout your business life. It basically consists of an executive summary, market analysis, financial projections, employee needs and a thorough description of the products sold in your retail store.
Step 3. The Nuts & Bolts
It might not be as exciting as planning your grand opening, but having a solid foundation is what is going to make your retail business stick around when others are closing due to poor planning. It’s important to register your business name in the state you plan to do business, file papers for incorporation (if that’s the business entity you choose), get all the necessary licenses and permits for doing business in your city and get an Employer Identification Number (EIN, or Federal Tax Identification Number) from the IRS.
A resale license allows you to buy products for resale without having to pay sales tax. Next, it’s crucial to buy business insurance for your retail store. Shoplifting and employee theft are common issues retailers face, but there is also the risk of customers getting hurt in your store. Bottom line: Make sure you’re protected. Once you’ve crossed all the practicalities off your how to open a retail store checklist, you’re prepared to meet loan officers or investors to help secure your startup financing.
Step 4. Set Up a Location
Before we get too far into location options, you need to know owning any kind of business today requires also having a website. A website will help market your brand, build your reputation and enable customers to find you. As for a physical location, look for spaces near your target market — a commercial realtor can assist you to find something within your budget and that meets your needs. To make your retail store professional and functional, you’ll need an array of equipment and fixtures, such as signage, display cases, a point-of-sale system, security and more. If you’re unsure, work with a commercial interior designer experienced in retail layout to get the right feel — and flow in your retail store.
Step 5. Sales and Marketing
Luckily, today’s numerous sales and marketing tools make getting the word out about your new retail business easier than ever. Not that your work ends there. Actually getting shoppers to visit your store takes building a buzz before you even have a grand opening. Your marketing strategy should include a hefty emphasis on social media including Yelp, Instagram, Pinterest and Facebook.
Also, reach out to your city’s business development office. Find out about any local events you can attend to talk about your business. And get involved in your community by sponsoring a charity drive or volunteering at a city event. Plan a grand opening and give away free items or a portion of sales to a local cause. As a result, you make yourself known in your community. And more local consumers will want to do business with you and become loyal customers.
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The earlier that a retail business can master the 5 Step Profit Formula, the better chance they will have at having a long term profitable business. Retail owners need to understand Lead Generation, Lead Conversion, Increasing Transactions, Increasing Pricing (yes, you read that correctly), and Maximizing Profits. Most business owners have never been taught these 5 steps and the strategies and tactics to implement them into their operation.
Teri R. Moten
Doing your homework and having a solid business plan is critical. Especially before you’re on the hook for a 12-month lease (or longer), insurance, etc.
Yinnah
A yearn of interest has overshadowed me to become a store owner run my own store with a great location outlook of course ideas and a finalcial stamp that puts my new idea on the map. Yaj