Starting a business is not an easy task. There are innumerable decisions to be taken that can affect the success and failure of your business. Starting a retail business is not easy as well. There are tonnes of things to do, various choices to make, and a need to conduct research and analysis to set up a solid foundation for your retail store. Amidst these multiple decisions and choices, it is important not to forget that you are working towards making your dream of opening a storefront a reality. However, the key question is, “How to open a store?”
Before deciding to own a store, it is of great significance for you to have little knowledge of the industry. Its country-wide reach, market size, regulatory and compliance requirements, competitive scenario, retail business trends, challenges faced in operating a retail store, and outlook in the years to come. The retail industry is large in size and operations, and it includes multiple segments in which you can opt to operate. It is a highly competitive domain, and therefore, you must be sure of your decision to operate in such a risky retail business.
With the right mix of planning and dedication, you can successfully open and operate a retail store. We provide you below a list of steps or key considerations to be fulfilled before opening a retail shop:
A solid business plan forms the base of a retail store
Making a strong business plan is the first requirement of any retail business. This requires you to put all your thoughts regarding starting a retail store into words. Specifically, your mission statement, vision, goals, values, objectives, and approach you intend to achieve by opening a storefront. Your business plan must also include the following details:
It will serve as a guiding roadmap for your retail business so that you keep moving ahead as per the framework with some allowed flexibilities and adjustments to market factors.
A proper legal structure affects your retail shop’s business operations
Defining the legal structure of your retail business is an important requirement. There are multiple types of legal structures available for a retail store in any country. You can opt for a sole proprietorship, partnership firm, limited liability partnership, limited liability company, or any other form available in your country of operations. Each legal structure has different features and benefits, such as tax benefits, reporting, shareholding, personal liability for debts, and others. Once you decide on the legal structure, you should start registering your retail shop with the relevant authority.
A catchy, unique name for your retail shop that resonates with customers is a wise decision
Select a unique name for your retail shop that is easy to communicate, remember, and catchy enough for customers. You must keep in mind the basic requirements of SEO and keyword research rules, as it will help you gain more visitors and hence, more business. Furthermore, keep in mind that your retail store name must include the word for the type of retail business you intend to engage in. It must convey a meaning that resonates with potential customers. You can do a Google search to find the perfect name for your business. Later, you need to search the country’s trademark database to check if a business with a similar name exists.
Compliance with the regulatory and statutory legal requirements for retail stores is crucial
There are many other regulatory requirements that a business must comply with to operate legally in a country. After registering your retail business and deciding on the name, you are required to register with the industry associations, apply for a tax number, obtain a business permit or license, open a business bank account, get an insurance cover, and any other requirements typical for a business to operate in a country and a state. With the help of a checklist, check for all the legal compliance prerequisites before starting a retail business, and ensuring compliance.
The strategic location of the retail store can be the difference between success and failure
The location of a retail store matters to attract customers and to increase the footfall. It would help if you also decided whether you will buy the place to have full control or rent it. You must be careful of the neighboring stores and shops, any traffic junctions, or any construction in progress in a nearby place that may hamper potential customers’ shopping experience. Another big consideration is the money to be spent on the best location; therefore, a cost-benefit analysis is essential to finalize the location.
A perfect selection of goods and services is essential to achieve operational success
The most important decision is to finalize the products and services you intend to sell in your retail shop. Depending on your retail niche (hardware, clothing, jewelry, food, and many more), you need to check any other retail shops that sell similar items and how far they are located. You can check into these retail shops to better understand what they are selling, how you can be different, their targeted customers, and other points. Your retail shop’s ideal inventory will also depend on your target customer base and their purchasing behavior. All these factors, along with your passion and skill to sell them profitably, help you with this decision.
Selection of channel/s to sell factors in the customer experience you intend to provide
Retail stores can sell their products to customers through multiple channels – brick and mortar stores, online stores, or a combination of the two. There are other decisions as well that are vital to your business operations, such as “Will you take phone orders? Will you have a mobile app? Will you also provide delivery at home?” and others. You must finalize the channels of distribution and delivery to your customers and then identify ways to imbibe best practices to give a good customer experience through all channels selected.
Select the best sources for your products and services to up the game
A decision on products and services to sell in your retail store requires the right support from the decision on the vendors and suppliers from whom you will source these products. You may get your products from manufacturers, wholesalers, or individual makers – the decision is yours. This decision depends on the pricing of each, quality of products, delivery services, time taken, and other factors. Select your vendors wisely so that you do not have to run after them when stocks deplete or are finished since that will affect your retail store’s reputation and sales.
A marketing strategy for your retail shop is needed to spread the word
The marketing for your store starts even before you open the store for customers to visit. You must develop a marketing plan that includes all the promotion and advertisement ideas, budgets, marketing channels, products targeted, customers addressed, and forecasted benefits from each. The result expected from each type of promotion will be to have more buyers and increased sales.
The store layout, policies, and procedures bring discipline to your retail shop operations
It would be best if you worked on enumerating a list of policies and procedures to follow on a day-to-day basis in your retail store. These policies relate to return policy, exchange policy, payment options, employee schedules, the dress code, store open and close policy, etc. All these policies and set procedures bring a certain discipline and standardization across your operations so that they run normally and smoothly. Furthermore, these reduce the customers, employees, and suppliers’ confusion, as a sense of order is maintained in the retail shop.
A retail shop’s layout and design are extremely important to attract customers. Customers enter the retail store only if they are attracted to the floor plan, interior design, colors, shelves, amenities, and a friendly atmosphere. You have to set the right layout and design for your customers to bring them in.
Hire a good set of employees for all the assistance and support requirements in the retail shop
The people who make it possible to deliver the products and services in your retail shop to customers are the employees. Choosing the right employees for the right kind of work is critical since you have to find someone who fits the retail shop’s job description and culture. Retail employees must be smart, friendly, smiling, compassionate, eager to help customers, multitasker, empathetic, patient, and confident. You must conduct the right training for your employees and appraise them for good performance to keep them motivated.
Choose the right technology solutions to make it all possible
Depending on the retail business you choose, you may require some technology tools and systems to keep the operations running effectively and efficiently. Some of these technologies include POS systems, inventory management systems, customer rewards programs, data analytics, and many others. There are some retail management systems, which provide a combination of all these features. You have to decide the system right for your retail store within your budget.
Follow the steps mentioned above as the perfect guide for moving ahead with your dream of owning a retail store and running it successfully. There might be deviations happening along the way based on market factors, industry trends, and internal changes. However, do not lose the spirit and keep working towards making your retail store successful and profitable.
For now, follow these steps to set up a strong retail store and have a memorable grand opening.