Posts Tagged ‘retail’

By Angela Baca

Prospective retailers need a broad understanding of business planning. Each stage of planning the retail business requires extensive research. For example, you don’t want to open a store without studying the area around the intended site. You might hurt your chances of success by choosing a site with an insufficient market base or too much competition. This article discusses key issues you should address as you develop a business plan.  

The first stage in planning the business is to develop a store concept. Consider whether your retail shop will be a specialty store or a retail store. According to Entrepreneur.com’s Retail Business startup guide, specialty stores “focus more on neighborhood convenience, the richness of the shopping experience, and inventory that meets the needs of their target customer on a personalized basis.” Before you invest your savings in a startup, you might need more research conducted by a market analysis firm. The report will suggest if your proposed retail or specialty store would thrive in the intended location. This market study should be done even before you talk to prospective partners or lenders.  

 

 

Vision and Goals

The first part of the business plan begins with the concept. Next, you develop the concept with a detailed vision and business goals. It becomes easier to write the rest of the business plan with a clear direction. Your written business plan helps the concept take shape. Build your plans around achieving short-term goals like opening the shop and long-term goals like generating profit in excess of your startup costs. The business planning process continues even after the store launches, and you have implemented all of its components. Down the road, you will use the help of key staff members to decide if your original business plan needs to be revamped.

Business Planning

Use other entrepreneurial tools to plan your new business strategy. For example, you can use forecasting to determine how much inventory to order for upcoming months. You can also consider purchasing an electronic or Internet-based inventory management system. Business planning tools such as forecasting and cost-benefit analysis are described in detail in web articles provided by the U.S. Small Business Administration (SBA). Explore their article collection at SBA.gov. In these free articles, the SBA Program Office provides resources on almost every stage of the planning process. The Program Office adds updates regularly to help business owners understand the present business climate.

Forming a Business

Study the steps to starting your retail business on the website of your state agency responsible for regulating corporations. Each state offers several options for incorporating or establishing a sole proprietorship. There are advantages and disadvantages to each type of business, and you may need an attorney’s assistance before choosing how to form a company.

Once you have selected your type of company, you need to find a business name. Before you pay to register a business name, make sure you have studied all startup costs and included them in the business plan. For example, investigate the cost of a business license, an occupational license, and applicable permits from state and local governments. These steps are common to many types of companies.

Designing the Storefront

Don’t spend any money yet! You aren’t finished writing the business plan. That doesn’t mean you can’t devote creative time to designing your storefront. Think about what types of products you will sell, how you will organize your space, what kinds of displays you will build, and how you will keep the storefront optimized for customers.

Sourcing

Your retail store will need reliable suppliers. To source products, contact potential suppliers and develop a file of their information while writing the business plan. Each contact you make is a form of networking. Keep a journal of what you learn from every contact. You can draw upon this information later. For example, if you are planning to meet with an investor when the business plan is ready, knowing in-depth information about the market and the suppliers in the market will be advantageous. 

Financing

In a time when business credit is hard to get, look at commercial lenders, private investors, family members, and other funding sources for your startup capital. You might even qualify for a federal grant. No matter where you get financing, you will encounter costs that aren’t in your business plan. That means you need a cushion, such as a secondary source of income to fall back on if your business startup takes shape slowly or you go out of business unexpectedly. Some prospective retail owners find it more advantageous to take on a partner or to purchase an existing store. 

Hiring

Your business plan is complete and your financing is in place before you start contacting landlords and applying for licenses and permits for the store. The business process that can make or break your first year is hiring. The first employees should bring experience and skills you don’t have to the new company.

Employees will become the face of your company. They will help you with many tasks you will be too busy to do, including building store displays and choosing pricing systems. Your new hires should be trustworthy based on a thorough background check, including contacting previous employers and checking for criminal records. 

Marketing

Studying how new workers reach out to customers might be the furthest from your mind when you launch the store. However, workers are your in-person marketers. They will either help you build loyal customers by responding to customer needs or diminish the success of your first year by just reporting to work for a paycheck. You need employees who are committed to building a solid company.  

Security

Customers and employees depend on you to provide a safe environment. In your business plan, consider how you will secure cash, how you will secure the store when you are not there, and how you will prevent crimes during business hours. Building a safe store and protecting it with affordable security measures begins in the planning stage.

Getting the word out about your company is easy if you talk up your business idea to everyone you meet. For example, pass out business cards so people remember your store and collect business cards for a future mailing announcing your store’s grand opening. A local business is built through word of mouth referrals when traditional advertising is beyond your budget.

Potential retail operators can also talk with a counselor at the local small business development agency. Think of the agency as a one-stop shop for business planning. You get to meet with a certified counselor for a small fee or for no charge. Another option is to browse resources from respected websites like Entrepreneur.com and SBA.gov. Your path to successful retail ownership begins with researching the best business plan you can write.

Many start-ups online are managed by people who work from home and profit from selling goods to other people. Many such businesses belong to retirees that have still the strength be active in the job field. The key to increasing profits is identifying and buying cheap overstocked wholesale and surplus products that you can resell to your customers. There are many wholesale companies that offer all sorts of products and are very eager to work with new businesses. Wholesalers turn to offer their overstocked products in really small prices. Along with this it is pretty easy to identify liquidators which buy and sell products from closeout businesses.  Buying such products may give a huge competitive advantage over rival businesses. Getting into B2B auctions will allow you to even bid and buy such products in even smaller prices. In today’s economical crisis such advantage is what may keep you in the business.

The Benefits

Save Money: By buying wholesale products to resell, you are saving a lot more money. This is especially beneficial in the long run because you will save a great deal of money on one transaction. Not only will you save by turning to wholesalers and liquidators, but buying in bulk will help you keep even more money in your pocket.

Better Customer Service: Wholesale and closeouts products are not just beneficial for saving money. You can also improve your inventory by having more of a single product or a variety of different products. In other words, you can keep restocking because you can actually afford it. Your customers will come to you because your supply will always be full and they will not have to wait long for their package. In turn, you will keep your customers and get more new ones, which will ultimately increase your sales.

Flexible Negotiations : Dealing with wholesale companies for cheap products means that you will eventually find a wholesaler that you like. By building a relationship with your wholesale company, you can also start to negotiate and agree on better deals. When you buy in bulk, you can also get more discounts.

Easy starts: As a start-up business you can always turn to surplus and closeouts products, in order to fill your on line store and e-business.  New entrepreneurs can easily start-up a new business spending the least amount of money possible.