How to Start a Small Retail Business
Starting a retail business requires more work than meets the eye. A lot of careful planning goes into forming, sustaining and growing a retail business. The nature of today’s competitive business landscape requires anyone going into business to have a few tips in their arsenal to come out at the top. Here are some pointers for how to start a small retail business:
Identify your niche
The first step is carving a niche for yourself. Figure out what space you want to occupy in the industry you wish to join. Narrowing your focus makes it easier to determine your niche market. Start by analyzing your interests and passions. Assess potential obstacles in your area of specialization to ascertain if the industry is the best for you.
As with most businesses, the financial bottom line is making profits. Consider profitability when identifying a niche for your business. You can research the competition to know how profitable an industry is. Analyze the competition to understand the strategies they are using. The research will help you find newer ways of presenting what the competition offers.
Craft a business plan
A business plan acts as the blueprint that guides the decision making process. It is a clear roadmap of where the business is going. Writing a business plan is the first step in turning your dream into a reality. The best way to craft your business plan is to start by understanding the essential aspects of your business model. Know what products or services you want to offer. Figure out if you prefer a traditional brick and mortar store or if your business will operate on an eCommerce model. Understand who your target market is.
Figure out the strategies you will employ to reach them. Come up with a unique selling point that will make you stand out from businesses offering similar products and services. Your business plan should factor in details related to your processes. Dig into the specifics of how you will source your vendors, how you will conduct hiring, the financial requirements before launching, how long it will take to break even, and what startup costs you will incur. Remember, your business plan is not cast in stone. You can always make changes and updates as you go along and gain experience.
Have a budget
You need to have a budget to monitor your startup costs. Find out how much money you will need to get the business up and running. If you are working on a lean budget, you can find ways to cut costs like operating online rather than a physical location or seeking help from your family members before you can get the financial muscle to hire more staff.
Understand how much it will cost to get equipment and insurance policies. Include the cost of shipping, delivery and storing inventory in your budget. Creating a budget will help you stay within your means and give you a realistic view of the resources you need to start the retail business.
Conduct market research
Before throwing yourself into the world of retail, you need to do market research to get some insight into your interest niche market. You could send out surveys for your prospective retail store. You can collect tons of data about the industry and the target market with surveys. Send the surveys via social media. Since you are just starting, the surveys need to be broad. You could also have consumer panels to get deeper insights that you may miss with surveys.
You can also use social listening tools like Talkwalker, BrandMoran, Mention, Brand24 to collect social data.
Find reputable vendors and suppliers
Where you source your products is a significant factor that can make or break your potential retail business. The choice of vendors and suppliers is a crucial aspect. It determines whether your retail prospect will be a success or a flop. Find vendors that work within your supplier budget. Only work with suppliers whose merchandise quality matches your brand. Look for vendors who have an impressive track record of reliability.
You want a guarantee that your merchandise will reach an agreed-upon time and excellent condition. If you are dipping your toe in the liquor business, you should find a reputable wholesaler of alcoholic drinks to supply you with products. Ensure that their customer service is excellent. It should be easy to contact your suppliers if you have any issues.
Register the business
Make your retail business official by registering it. The first step in registration is coming up with a unique business name. Select a name that reflects your brand identity. Make sure that no other similar business is using that name. Search to ensure that no company in your area uses your select name. Once that is clear, you can cement your place in the digital arena by purchasing a domain name and creating social media accounts in the business name to increase visibility.
To continue with the registration, you need to decide what legal structure you want the business to have. The legal model dictates the degree of legal protection, ownership structure and your ability to receive funding. Once you decide on what entity you want your business to take, visit the Secretary of State website to register your business. You can then go to the IRS website and apply for an EIN.
Obtain the necessary license and permits
The license regulations vary from state to state. Visit the city clerk’s website to know the local permits and licenses you need to operate your business. You may also need other documents depending on your field of interest. The process of obtaining licenses and figuring out what permits and insurance policies you need may feel somewhat alien to you. It is best to work with a trusted business attorney to guide you along the way.
Build your brand
In the competitive business world, branding is essential. It is necessary to develop a brand that connects with your target audience. Your brand identity will communicate the values that your business stands for and the impact you want your business to make. Consistent branding helps you form lasting relationships with your target audience.
To build a powerful brand, you need to highlight the aspects of your business that differentiate you from other stores. Pay attention to the various elements of your brand like the logo, store name, font, mission statement and unique value proposition. Building a reputable brand is a surefire way to succeed and remain relevant in retail.
Final remarks
All fail if you do not have proper marketing strategies to get the word about your business out there. Identify the best marketing angles that suit your business. Consider using a combination of both digital and analogue marketing efforts.
Identify your niche
The first step is carving a niche for yourself. Figure out what space you want to occupy in the industry you wish to join. Narrowing your focus makes it easier to determine your niche market. Start by analyzing your interests and passions. Assess potential obstacles in your area of specialization to ascertain if the industry is the best for you.
As with most businesses, the financial bottom line is making profits. Consider profitability when identifying a niche for your business. You can research the competition to know how profitable an industry is. Analyze the competition to understand the strategies they are using. The research will help you find newer ways of presenting what the competition offers.
Craft a business plan
A business plan acts as the blueprint that guides the decision making process. It is a clear roadmap of where the business is going. Writing a business plan is the first step in turning your dream into a reality. The best way to craft your business plan is to start by understanding the essential aspects of your business model. Know what products or services you want to offer. Figure out if you prefer a traditional brick and mortar store or if your business will operate on an eCommerce model. Understand who your target market is.
Figure out the strategies you will employ to reach them. Come up with a unique selling point that will make you stand out from businesses offering similar products and services. Your business plan should factor in details related to your processes. Dig into the specifics of how you will source your vendors, how you will conduct hiring, the financial requirements before launching, how long it will take to break even, and what startup costs you will incur. Remember, your business plan is not cast in stone. You can always make changes and updates as you go along and gain experience.
Have a budget
You need to have a budget to monitor your startup costs. Find out how much money you will need to get the business up and running. If you are working on a lean budget, you can find ways to cut costs like operating online rather than a physical location or seeking help from your family members before you can get the financial muscle to hire more staff.
Understand how much it will cost to get equipment and insurance policies. Include the cost of shipping, delivery and storing inventory in your budget. Creating a budget will help you stay within your means and give you a realistic view of the resources you need to start the retail business.
Conduct market research
Before throwing yourself into the world of retail, you need to do market research to get some insight into your interest niche market. You could send out surveys for your prospective retail store. You can collect tons of data about the industry and the target market with surveys. Send the surveys via social media. Since you are just starting, the surveys need to be broad. You could also have consumer panels to get deeper insights that you may miss with surveys.
You can also use social listening tools like Talkwalker, BrandMoran, Mention, Brand24 to collect social data.
Find reputable vendors and suppliers
Where you source your products is a significant factor that can make or break your potential retail business. The choice of vendors and suppliers is a crucial aspect. It determines whether your retail prospect will be a success or a flop. Find vendors that work within your supplier budget. Only work with suppliers whose merchandise quality matches your brand. Look for vendors who have an impressive track record of reliability.
You want a guarantee that your merchandise will reach an agreed-upon time and excellent condition. If you are dipping your toe in the liquor business, you should find a reputable wholesaler of alcoholic drinks to supply you with products. Ensure that their customer service is excellent. It should be easy to contact your suppliers if you have any issues.
Register the business
Make your retail business official by registering it. The first step in registration is coming up with a unique business name. Select a name that reflects your brand identity. Make sure that no other similar business is using that name. Search to ensure that no company in your area uses your select name. Once that is clear, you can cement your place in the digital arena by purchasing a domain name and creating social media accounts in the business name to increase visibility.
To continue with the registration, you need to decide what legal structure you want the business to have. The legal model dictates the degree of legal protection, ownership structure and your ability to receive funding. Once you decide on what entity you want your business to take, visit the Secretary of State website to register your business. You can then go to the IRS website and apply for an EIN.
Obtain the necessary license and permits
The license regulations vary from state to state. Visit the city clerk’s website to know the local permits and licenses you need to operate your business. You may also need other documents depending on your field of interest. The process of obtaining licenses and figuring out what permits and insurance policies you need may feel somewhat alien to you. It is best to work with a trusted business attorney to guide you along the way.
Build your brand
In the competitive business world, branding is essential. It is necessary to develop a brand that connects with your target audience. Your brand identity will communicate the values that your business stands for and the impact you want your business to make. Consistent branding helps you form lasting relationships with your target audience.
To build a powerful brand, you need to highlight the aspects of your business that differentiate you from other stores. Pay attention to the various elements of your brand like the logo, store name, font, mission statement and unique value proposition. Building a reputable brand is a surefire way to succeed and remain relevant in retail.
Final remarks
All fail if you do not have proper marketing strategies to get the word about your business out there. Identify the best marketing angles that suit your business. Consider using a combination of both digital and analogue marketing efforts.
