If you want to be successful within your retail business, there are a few things you need to do right so that you’re on top of every aspect of your trade. You’ll need to consider everything from day one because not planning well can leave you unprepared, which could be costly! So, if you’re setting up shop for the first time, take these things into consideration to avoid any pitfalls in your new business.
Find the perfect location
While you might not be able to choose anywhere you want when it comes to setting up shop, it’s important to find somewhere that’s easily accessible for your target customers. It can be tempting to find a cheap location and hope your business generates a steady flow of customers, but it also might not be worth the risk.
When it comes to choosing the perfect location, you’ll want to be where your customers already are. Find out where your target customer base spends their time, and look for open spaces nearby. For example, setting up a cafe in the middle of a busy shopping highstreet is always ideal for weary shoppers. Throw in some food too and your business will thrive.
It’s also important to make sure you keep storage space in mind, especially if you need to keep a lot of inventory on hand just in case. On the other hand, if you don’t expect to have a lot of stock in at any given time, then paying for the extra space will be a waste of money.
The cost of your shop fitting
You’ve got the business plan down, you know your stock range, and you even know how you’re going to display it. But, now you’ve got a space for your business to get going, you need to think about how you’re going to fit your shop.
You want your business to reflect your brand and its values, and while it’s perfectly possible to pull this together yourself, you might be better off speaking with custom shopfitters instead. Sometimes paying a little extra to make sure things look perfect is worth the investment.
However, if you’re a pop up shop and don’t plan on being there forever, for example, then it might be worth holding back until you decide to settle in a more permanent location. Saving on the cost of your shop fitting might help your business stand the test of time.
The layout
Have you thought about how your customers will browse your store? How you lay out your store will make a world of difference between someone glancing in and a passer-by choosing to check out your products.
However, you also need to think about the products that you need to sell in order to stay open too. Understand which products are most beneficial to you and create a fine balance between valuable items that will make your business a lot of money and everyday items that will help draw people in to begin with. Sure, the expensive items might make you a decent amount, but if you don’t sell it regularly, your business might struggle. It might be better to sell lots of smaller things to keep profits high.
Stock loss
One of the biggest mistakes that shop owners make is not factoring in stock loss to the prices of their products. Even if your product isn’t perishable, there will be a loss of stock at some point. That might be through a delivery driver not taking care when unloading or an accidental knock in your shop causing the item to break. Not only that, but you’ll want to use some of your stock for merchandising or demonstration purposes. Make sure you factor in stock loss into your price tag so that you’re not left fronting the price when things turn sour.
Creating a strict returns policy might help you here. While there are some items that you’ll have to honor when it comes to refunds, there are others that you don’t. For example, if you sell clothing, items that have been worn that are delicate (like underwear and socks), you may want to consider adding a no returns policy because you can’t resell those, even at a discounted price. Whereas clothing can be resold as returned or faulty for a cheaper price. Take the time to look into this and build your returns policy to help protect your finances.
Cover yourself legally
While you don’t expect anything to ever go wrong when running your store, it could happen. Make sure you put safety rules and procedures into place to keep your staff and your customers safe from harm. It also wouldn’t hurt to have a lawyer’s number on speed dial for legal advice when you need it.
You should also cover yourself legally by making sure you have the right licenses and permits. Things like:
- A business operation license that allows you to operate your business in the city, county or state you run your business from.
- A seller’s license. This might not always be applicable, so make sure you check to see if you need one.
- An employer identification number – this allows you to hire employees and keeps your taxes in check.
Following the correct legal procedures for retailers in your state is important, so make sure you know what you need to have on hand.
Get your finances in order
Finally, there are lots of financial things to think about when opening a retail store. Having a physical store means that you’ll have a lot of overhead costs that are upfront, so you might need to find funding. Whether that’s a small business loan or dipping into your personal savings is completely up to you, but remember to weigh the risks and advantages for each option for committing.
You should also make sure you get some financial advice from an advisor throughout the whole process, especially if you’re investing a lot of money in a short time frame. It could help save your business!
