Even though eCommerce has taken off over the past decade, that doesn’t mean there’s nothing there for retail. People still enjoy going to local shops and buying from their community. Believe it or not, 70% of people still prefer to shop at small businesses and keep cash local.
A retail business is a great way to create an excellent life for yourself and do something great, but you’ll need to put in a ton of work to do things right. Read the guide below to learn what it takes to create and manage a successful retail business.
Create a Detailed Plan
A detailed plan is necessary if you want to run a successful retail business. There are countless moving pieces you need to get right. If you try to wing it, you’ll end up falling behind and losing money.
Here are a few of the things you need to consider when coming up with your plan:
- Your product lineup
- The services you sell
- Your ideal customers
- How much money are people willing to pay
- Revenue goals for the first year
- The people you need to hire
- How much competition your business has
- Potential problems in the future
Of course, there are many other things you need to consider when creating a plan. This will be unique, based on the industry you plan to enter.
Of course, that doesn’t mean you’ll need to follow this plan completely in the future. You’ll experience unexpected situations in the future. Leave room to adapt your strategy to address these problems.
Pick the Right Products
Your product selection is critical run you run a retail business. There are countless companies out there that sell products in every industry. If you choose a crowded industry, you’ll have a more challenging time competing.
However, that doesn’t mean you should completely dismiss competitive markets. If you can do something better and cheaper than your competitors, you can gain an advantage and get new business.
On the other hand, you can also set up a general store and sell a variety of products. You may not be as unique, but you can make your company known with the proper marketing and customer service.
Take care and do your research during this process to ensure you pick the right products for your retail business.
The chances are good that you won’t be able to pay for a retail store alone. You have to purchase store space, buy products, pay employees, buy tools, and much more. Unless you operate an online store, you’re going to spend a lot of money.
That’s why many retail store owners go the financing route. They get loans from local banks or partner with private investors.
Traditional loans are outstanding if you want total control over your business. You’ll need to prove to a bank that you have a solid plan. But after you get your loan, you’ll be able to execute your plan as you wish.
A private investor may not work the same. Some investors take equity in the business and take a hands-off approach. Others will want to take a more active role to ensure they get a return on their money.
Take into account your preferences and choose the option right for you.
Suppliers can make or break the success of a retail business. You can have great products and customer service, but you won’t make any money if you can’t get products in your store to sell to customers.
You need to do research into the best suppliers you can find. Check references to look for things like material quality, shipment times, common customer service issues, prices, and more.
This information will help you narrow down your supplier list and remove the bad companies. Once you find a few suppliers, ask for samples to see what quality they offer.
Find a Retail Location
Location is critical for a retail store. You won’t get many visitors if you have a property in the middle of nowhere. The only people who will find your store are the people who randomly drive into the area.
Picking a more popular location will give your store more eyeballs. People will drive by more often, walk by on a sidewalk, and find your store on Google Maps. That’s less advertising that you have to do to get customers.
Of course, you don’t need a location in the middle of everything. Those spots are expensive, so they may not be in your budget. But you can find somewhere a little out of the way and still be close enough to get a lot of drop-in traffic.
Create Your Legal Structure
You can’t purchase a commercial property or hire employees as an individual. You may be able to do some business as a freelancer or LLC, but you don’t have the same options as a corporation.
A corporation gives you the tools to calculate business taxes, pay employees, protect your personal accounts, and much more. It’s a framework you need to set up if you want to grow a large business.
The good news is that it isn’t usually hard to set up these structures. Every location is different, so reach out to your local government to see what you need to do.
However, you do have several options and may not know what to pick if you don’t have much experience. Get advice from an experienced lawyer to learn what your best options are.
Invest in Technology
You can do a lot in a retail business without tech tools. However, you’re always going to be limited by time and unable to do as much as possible.
Investing in technology solves this problem. You can automate tasks, gather more data, generate insightful reports, manage customers and employees, and much more.
Take tracking inventory, for instance. You can put barcodes on your inventory to track what you have in stock. Once you sell an item, you can use apps for scanning barcodes to log a sale and remove an item from your inventory.
There are countless examples of this you can see in a retail business. Look at what tech tools are available and see what you can use for your business.
You may not be able to afford everything initially. But you can gradually grow your tech capabilities as your company begins to make money.
Hire a Great Team
Your team will make or break your retail store. You won’t do everything yourself if you own a retail location. There’s too much to do and not enough time in the day if you want to care for your customers.
You’ll need great employees to help make your dream come true. Unfortunately, it isn’t always easy to find a great team.
The first place to start is customer service. You need someone there who knows how to help people. They’ll be the people who help people find what they need and get them checked out.
From there, you can start looking at the other parts of your operation. You can start small when doing this. Focus on the tasks that you aren’t great at doing yourself.
Doing things this way will allow you to free up your time from work you aren’t great at doing. You can focus on the bottom line of your business instead.
Form a Marketing Plan
You can’t only rely on foot traffic if you want to build a retail business. Even if people see your shop on the side of the road, there’s no guarantee they’ll stop by to see what’s happening.
You need to advertise yourself online to start getting more business. The first place to begin that process is with a website.
Sign up for a hosting account and put up a website. You can talk about your products, why people should stop in, and your store hours. From there, you can sign up for Google My Business to show up on Google Maps.
Another popular starting advertising method is social media. You can sign up for accounts on the websites your ideal customers frequent and build a following. Doing this will help build your brand’s reputation and make your building more noticeable to people walking near your store.
Do Your Due Diligence When Creating a Retail Business
You’re putting a lot of the line when you open a retail business. You have to pay for retail locations, employees, products, and much more. You can get in trouble if you do things wrong and fail at running a retail business.
However, there are many things you can do to increase your chance of building a profitable retail business. Remember the advice above during your journey to maximize your chance of success.
Head back to the blog to learn more business advice that will help make managing a retail business easier.