How to Set Your Retail Business up for Success
Did you know that setting up a retail business involves doing things such as designing a business plan, securing the necessary funding, and finding the perfect location?
It can be a huge undertaking to set up a retail business, especially if it is something that you are doing for the first time. This is why it is a great idea to prepare yourself as much as possible.
To make your job easier, we’ve created a guide. Keep reading if you want to find out more.
Table of Contents
Create a Plan
Regardless of how great of a business idea you have, you will need to create a plan if you want to be successful.
Your plan will need to go beyond the superficial levels. It will need to articulate things such as what your business will be about, where it will operate, and how it is going to operate.
You should start by writing up an executive summary. This should explain the main goals of your retail store, and what your retail business management structure will look like.
Next, take time to describe how your company will do business and what types of products or services it will sell.
It is also a good idea to perform a market analysis. This should cover the details of your industry’s current economic trend and who your competitors are. And don’t forget to assess the economic outlook in your local market area.
Once you’ve completed this analysis, you will then need to set your funding expectations.
Ask yourself the question of how much money you will need to start your business and how much money you expect to earn during your first several years of operation.
Keep in mind that this business plan will benefit your investors and business partners. It will help them understand how your business will function and how long it will take to start making money.
If you don’t have a large sum of money to invest in your retail store, you will need to seek funding. Many people fund their businesses by getting small business loans from banks and brokerage firms.
When you are seeking a loan, make sure to figure out exactly how much money you will need. You should also have an idea of how long you will need access to outside funding before you are able to repay your loans.
You should include these details in your business plan. Be ready to explain exactly how you will use your loan. This might include things such as purchasing and managing inventory, paying rent, and marketing.
If you want to cut down on the cost of managing your inventory, you should consider using retail inventory management software.
Never sign paperwork until you fully understand your options for repayment, the loan duration, and what kinds of penalties you will face with delayed repayment.
Find the Right Space for Your Business
Choosing the right space for your retail store is one of the most important choices you will make when you are running a business.
If you choose a location that is hard for your ideal clients to get to, your business will probably be less successful than if you find a space that is located in the center of a town or city.
There are several important questions that you will need to ask yourself in order to find the best possible location.
First, how much space do you need for displaying your inventory? You will limit your options if you choose a small space. On the other hand, spaces that are too large tend to feel awkward and empty.
You’ll then need to ask yourself how much money you are able to pay per square foot. Some areas are more expensive than others.
Next, you should decide whether or not you are willing to remodel and renovate your retail space. The main downside of doing this is that it can become very expensive.
You might add thousands of dollars to your start-up costs. If you want to save money, consider starting a pop-up shop. This will give you the chance to test out various locations before making any long-term commitments.
Secure the Right Materials
There is a lot of work that you will need to do before opening the doors to your retail store. It is not enough to only focus on manufacturing or purchasing inventory.
Instead, you will probably need to fill your store with the right kinds of furniture and accessories.
This includes shelves, rotating racks, podiums for displaying your merchandise, checkout counters, cash registers, and shopping carts.
Since there are so many materials that you will need to keep track of, consider creating a list of all of the items that you think you’ll need. You can then focus on purchasing these items.
Hire the Best Employees
Skilled employees will help you to engage with customers and increase your chances of making sales. They will also play an important role in building customer loyalty.
On the other hand, poor employees will turn customers away from your business. They will harm your business’s reputation and will hurt your bottom line.
It is a much better idea to hire the right employees and to properly train them than it is to do damage control in the near future.
When you post “help wanted” ads, be clear about what the roles and responsibilities are for each position that you are hiring for.
It is also important to post job openings in locations where your potential employees are likely to see. Consider creating targeted social media ads and using LinkedIn to find the right employees.
Manage Your Back Office
You will need to pay attention to your back office operations. This includes things such as accounting, human resources, and inventory management.
By giving your back office the attention that it needs, you will set your business up for long-term financial success.
Support Your Employees
One key component of running a successful retail business that many people overlook is employee management. You will need to make sure that your business has enough staff members.
You will also need to give your workers the tools and resources they need to perform their jobs as expected. There are several simple ways that you can do this.
First, make sure that you have the right tools. At the very least, you should have a point of sales (POS) system to figure out your peak hours and to keep track of your employee performance metrics.
Take time to figure out what times of the day and days of the week your customers are coming into your business most frequently.
After you find the right employees, you will need to make sure that they quickly understand their roles and responsibilities. Try your best to create an onboarding process that is efficient and effective.
Keep Track of Your Inventory
You will need to monitor what you are selling so that you can have an idea of how well your store is performing and what your average profit margin is. It will be easy for you to make strategic adjustments if you know these things.
You might be able to track and manage your inventory by hand. But it will be easier for you to do this if you use inventory management software.
Regardless of how you choose to track and manage your inventory, make sure to perform physical inventory counts on a regular basis. It will be easier for you to do this if you make an effort of getting your staff involved.
Tell employees why it is important to stay on top of stock control. And offer them guidance on how to do this.
This might involve choosing a small corner of your store to focus on counting the styles and numbers of each product that you are selling.
And don’t underestimate how important it is to mitigate theft. If you don’t do this, it is likely that you will see your sales shrink.
You can mitigate theft by purchasing high-quality security cameras and mirrors.
Also, make sure to train your employees so that they know how to spot and deal with shoplifters. Lastly, make sure to keep your inventory organized.
How Do You Set Your Retail Business Up For Success?
If you want to set your retail business up for success, it is a good idea to write up a business plan and secure funding as early as possible.
If you are interested in learning more about running a retail business, consider visiting the Business section of our website.