The goal of many individuals is to own their own retail business. You could be among the number of business owners who actually turn that dream into reality. This requires an understanding of what you are in for as it relates to things such as start-up costs and cash flow. You will also need to know what it takes for your retail business to be profitable even prior to opening your doors. The marketing strategy you use must include thorough understanding of your target market and the types of products they will purchase from you in sufficient volume that will generate adequate profit margins for you to be successful.
Formulate a Business Idea and Create a Business Plan
Coming up with an idea for your business and developing a business plan is the first step to getting your retail business open. The answers to the questions below, among others, will assist in this process:
• What will be sold by your business?
• Who is its target audience?
• Who is the competition in your local area and the wider industry?
• What will your prices be like?
• Who will make up your team?
It is vital that you create a retail business that will satisfy a need of the customers you are targeting. Knowing the competition is also essential as no business idea is completely original. Be aware of options the customers have relating to the product you are selling and build a strategy to compete. Be specific about your competitive advantage and determine how this will be communicated to your customers via presentation and marketing.
Select a Name for the Business
Along with the other basics that go into formulating a business plan, invest some time into finding a good name from your business. When considering how to generate a good business name, the factors below should be considered:
• Meaning
From the perspective of the customer, the name should have some type of meaning. The meaning may be established over time; however, the name you choose should be recognizable to customers.
• Uniqueness
Avoid using a name that is close to any of your competitors. Go for something that is authentic and original that sums up your business. Without looking at other brands, endeavor to draw your own inspirations to come up with names.
• Simplicity
Go for brand names that are fairly short and easy to pronounce. A name that is a mouthful is possibly not the best for branding purposes.
In addition, it is crucial that you check that the name is not already taken or trademarked.
Cover Your Legal Basics
This includes selecting a business structure, sticking to regulations and getting the proper permits and licenses. If you are starting up a retail business, a few common permits and business licenses are required to stay in compliance and in operation. These include:
• Basic Business Operation Permit
This permits you to operate out of the county, city or state in which you will be conducting your business.
• A Seller’s License
This will depend on the types of items being sold in your retail business. It is recommended that you consult the government office in you state to determine whether this is necessary.
• An EIN or Employer Identification Number
This is basically a federal tax ID that permits the hiring of workers for the storefront and ensures payroll tax is collected.
It is common for retail businesses to become corporations or limited liability corporations (LLCs); these options assist in limiting personal liability.
Get the Right Location
If your retail business will be operated from a brick-and-mortar structure, it is important to find the location. Awkward positioning or poor access can keep clients away. The real estate business for retail is quite psychological and the cost is typically among the last considerations for the majority of retailers.
Selecting a prime space must be a focal point. While it can be enticing to try to choose an inexpensive location and expect the business to generate a constant flow of customers via its marketing efforts, sometimes, no substitute is there for being in a hectic section of town. Choosing a downtown location could be more expensive than somewhere a few miles outside of town; however, the costlier location may attract thousands more customers annually.
Get the Right Insurance
There are inherent risks that come with running a business. For example, a worker could become injured while on the job, a customer could file a lawsuit, or a natural disaster could ruin your property. As such, it is essential to safeguard your asset; getting the right type of insurance is among the best ways of doing this. If you are selling products that buyers may install themselves, it’s important that you consider product liability insurance.
Additionally, the law requires businesses with workers to provide certain types of insurance like unemployment and disability and workers’ compensation, depending on the state in which the business is situated. Failure to do this could lead to consequences like criminal or civil penalties, fines and ‘cease and desist’ orders which could be far more costly than an insurance policy.
Consider Using Digital Marketing
Marketing involves connecting with your target audience at the right time and place. In this digitization age, your best approach would involve meeting your customers online where they spend a lot of time. Increasingly, digital platforms are being associated with everyday life and marketing strategies. Digital marketing promotes products and/or services through different forms of electronic media, primarily internet based.
Digital marketing can effectively work for all industries. With this type of marketing, you will be able to see results much quicker than with offline marketing. Its interactive nature assists companies in growing their customer base in a relatively short period of time.
To start a retail business, it is important to narrow down your target audience. Once it is determined what you are selling and to whom you are selling, start to check off legal requirements and look for a location. You should then look at various marketing channels that could work best for your retail business. Arrange a grand opening and launch your business.
