Before opening a retail store, narrow down your market.
datachannel.org –How to Open a Retail Store. Online shopping is a popular choice for many consumers in 2019. However, smaller retailers are finding more success online than brick-and-mortar stores. While most of these businesses have a website, there is something special about shopping in person that cannot be duplicated online.
There are many studies that show in-store shopping is still a viable option. Online and in-store sales can be co-exist. It is important to plan ahead if you are interested in opening your own retail store. To learn more about opening a retail store, we spoke to experts in the field.
Create an idea and a business plan
First, you need to come up with an idea and create a business plan. First, you’ll need to decide what type of store to open. Each of these questions will need to be answered:
- What can you sell your business?
- Who are your target customers?
- What price range will your business charge?
- What are your local competitors?
- Who will you have on your team?
There are many other questions you need to answer, but opening a store is just like any other business. It is crucial that you know what you are selling and who your target audience is. It is important to have a retail shop that fulfills the needs of your customers.
Juli Lassow, the founder and principal at JHL Solutions is a retail management consulting firm. “Know your competitors,” Juli said. “No idea is original today. Know what your customers have for you and your product. It could be as simple as doing nothing.
Your strategy for competing will be developed once you have a clear understanding of your competition. What about price? On quality? Service? What about variety? Define your competitive advantage. Know how to communicate this to your customers through marketing or presentation.
Lassow also mentions the importance of understanding your competitive advantage and what makes you business stand out. Retail is highly competitive. You need to be clear about your strategy to succeed. The most important part of opening a business is to identify how your business will help your target market.
Lassow stated that being lost in crowds is a common risk when opening a retail store.
She said, “You run the risk of not being noticed in a crowded market.” Consumers have many choices today to find out about products. They can choose where to shop. They can choose how they want to shop. Your consumer must be reached by your retail strategy. They must feel it.”
You should also consider marketing ideas and funding for your business. Do you require business loans to fund your business? Are you willing to take on investors? Which marketing channels are you going to use? Do you need social media specialists for your team? Which online channels are your customers using?
Both marketing and funding are important aspects that must be considered when developing a business plan. It’s a good idea for funding to search business loans as well as how investors can be attracted. You should be familiar with online marketing channels.
Also, consider all your costs. Make a list of all the variable and fixed costs that could affect your business. It is easy to think up a great idea, but forget about the hundreds of thousands of dollars of costs. It is possible that you will discover in your research that it is too expensive to open a brick-and mortar store. Instead, you can start an online business and save money for opening one.
Learning about inventory costs and other business items can also help you generate new ideas. When it comes time to open your retail store, you will be able to plan in detail how to build your business. You will need a point of sale system and a method to process credit cards transactions. You’ll also want to invest in the best accounting software for you business.
Name your retail store
You should also take the time to choose a great business name. You should take into consideration a few things when you are looking for a business name.
- Meaning The name should have some meaning from the perspective of the customer. This meaning can be acquired over time but you want your brand name to be easily recognized by customers.
- Simplicity– Search for names that are short and simple to pronounce. Apple, Nike, Facebook, Google and Facebook are all great brands that are simple to pronounce. Your brand name should not be too long.
- Uniqueness Don’t choose a name that is similar to your competitors. You should choose something unique and original that best describes your business. You can draw your own names and not look at the work of others.
Names don’t make or break your business.
Cover your legal basics
You must know the basics of legality, including how to choose a business structure and comply with regulations.
“If you open a retail store, you will need to have a few common permits and business licenses in order for the business to continue operating and comply,” stated Deborah Sweeney CEO of MyCorporation.
- You will need a basic business license to be able to operate your business within the state, county, or city you are doing business.
- An employer identification number (EIN) is a federal tax ID that permits you to hire employees at your storefront. It also ensures your business collects the payroll tax.
- A seller’s license. It depends on the type of products your retail storefront sells. To determine if you require it, it is a good idea to check with the state government office.
You use the same process for selecting a legal structure as other businesses when it comes to choosing one. However, being sole proprietor for retailers can be dangerous. If the business fails, it’s a smart way to reduce your risk.
Retailers are often limited liability corporations (LLCs), or corporations. Both options can help limit your personal liability.
Locate the perfect location
You need to find the best retail space to house your brick-and-mortar business.
You must have a central point for choosing a prime retail location for your business. It can be tempting to choose a location that is cheap and hope for steady customers. However, it’s not always possible to find a great spot in the heart of a bustling area. Although it might be more expensive to choose a downtown location than one located a few miles from town, the latter option could bring in thousands of customers each year.
Bethany Babcock, founder and CEO of Foresite Commercial Real Estate, stated that first-time retailers should be cautious about trying to save rent money if they’re not a true destination retailer. “It’s possible to keep clients away from the center if there’s poor access or awkward positioning.” Retail real estate is psychological. The price of real estate is often the last thing that retailers think about.
Find out where your customers are spending their time when choosing a location. A downtown location may be more cost-effective and attract fewer customers if your customers are located outside the city. Your retail location should be located in the area where your target market spends most of its time. This tip might seem straightforward, but businesses tend to focus more on finding the perfect location than narrowing down their target market.
A location may have additional space that you can store your inventory. You may need additional space if you plan to keep a lot more inventory. Some stores sell high-end products and don’t require a lot of space. When choosing a location, keep in mind inventory.
You can create a personal experience
Retail success often depends on adding value to customers that is not offered by competitors. Personalization is a common example of this. Retail stores often allow customers to test the products. This is a common way that they succeed. Brick-and-mortar stores can provide personalized experiences such as free samples in a food shop, or dressing rooms in a clothing store. Online retailers are unable to offer the same level of personalization. Are you interested in improving customer relations management? Take a look at our top picks and software reviews to see what software can do the trick. ]
Online shopping is convenient, but physical stores must still offer reasons for customers to come to them. Customers will continue to be attracted to physical stores if they have the opportunity to interact with staff and are personalized.
Marco Castelan, cofounder of The Navio Group, is a retail consulting firm. He stated, “I think that the most important question an entrepreneur should ask himself/herself: Can I offer the customer a unique experience?” You don’t have to sell items that aren’t available elsewhere. The best way to stand out is by creating an experience that the customer will never forget.
When choosing a shop location or the size of it, your focus should be on your customers. You should find a location that offers a unique experience for your customers and your business. When making decisions in-store, it is important to create an experience for customers.
Build vendor relationships
When opening a retail store, it is crucial to build relationships with vendors. Owners of small businesses face many challenges. It is important to always please customers, despite these challenges. Business owners, particularly retail shop owners, can build strong relationships with vendors to avoid potential problems.
It’s important to establish strong relationships with vendors in order to make your business a success. If you use overseas vendors, this can be difficult.
Lassow stated that “the global supply chain is rapidly changing.” It is difficult to establish global relationships that will supply you with the goods or services you require because of current trade uncertainty. Get support if you are planning to source products entirely or in part from countries other than the U.S. Partner with experts in sourcing logistics, customs, and tax as part of your operations planning.
Find marketing opportunities
A key part of building a successful retail business is marketing. Pop-up shops are a good option if you have an existing online business. These shops are temporary and only open for a limited time. Your clothing store might open a shop in a downtown location for the duration of a one-day event.
Pop-up shops allow your business to expand or provide a physical location for customers. Pop-up shops are a great way to see if your online shop can work in a physical location.
Pop-up shops are a great idea, even if your online store is not yet established. Pop-up shops can be opened once a month if you have a brick-and-mortar store. This will allow you to increase your customer base and expand your reach to new areas.
Customers may be interested in opening a shop in their town every few months. If your products are appealing to them, they might be willing to drive 20-30 minutes to see you or buy from you online. Pop-up shops are a great way to create buzz about your business for a few weeks or days.
Social media and in-store discounts are two other avenues for marketing. A great way to attract customers is to sell. You could offer 30% discount on select items during holidays to increase foot traffic. There are many marketing options that you can use. In order to attract more customers, you could offer 10% off your products from December 20-24.
You could also sell holiday items at a discounted price from December 26 through January, to make it easy for customers who want to buy items in advance of next holiday season.
It doesn’t matter what marketing or sales strategies you use, creativity is key. Creative marketing ideas are a great way to reach customers. Retail business can be a difficult yearlong task. Quality marketing campaigns are essential to ensure success. Are you interested in direct mail marketing your store? For small businesses, check out our guide to direct mail . ]
Make plans for a grand opening
For retail stores, it’s a good idea to go big for the grand opening. While this doesn’t mean that you have to spend a lot on the grand opening, it is important to make it a memorable event. You can reach out to local media outlets to share the news about your store opening. This is a great way to spread the word about your business free of charge. Send journalists a pitch about why your store is important and how it fits in the local community. When pitching journalists, be sure to use proper etiquette.
You can also secure media coverage by promoting your grand opening via social media and other marketing channels, weeks ahead of time. To get people excited, don’t wait until your business opens. Start strong and give people a chance to remember your business within the first few days. This requires a grand opening event that is successful.
You don’t have to make it extravagant, but you should treat your grand opening as a serious event that will help win over the community. Timing is also important. It’s not a good idea to open a store on Tuesday at 2 pm. However, opening a store on Saturday morning during a busy retail day might be a great idea.
Although grand openings don’t necessarily make or break a business, you want to get customers excited about your business.
The bottom line
First, narrow down your target market before you open a retail shop. After you have decided who and what you want to sell, you can start searching for a location. After you have found a suitable location and fulfilled all financial and legal obligations, consider other marketing options that may work best for you business. Your retail business will open when you plan a grand opening.