5 Tips Checklist: How do I open a retail store?

Being a retail store owner can develop into a rewarding career, but it can also be challenging. Running a store requires a great deal of organization, discipline, and passion, and it also helps to possess some retail market experience.

1. Come Up With a Business Plan

A business plan outlines goals and provides a sense of how to accomplish them. Most business plans establish a list of ordered tasks to be completed and include the entrepreneur’s vision for the company. Sometimes, this also consists of a timeline.

One of the best ways to begin writing is to consider the “business thesis.” Why is the entrepreneur seeking to open a retail store in the first place? What is the reason behind it?

Here are a few more questions to help entrepreneurs envision their business plans.

1. Has the owner established the legal structure of the company yet? For example, will this retail store be a sole proprietorship, a corporation, an LLC, or a partnership?
   
   
2. What is the store’s focus? While retail stores can sell a wide range of products, the new business owner should know how to organize the products around a theme. A sense of structure and cohesion will help make the store stand out and provide a chance to be known for something specific and unique. Also, does the entrepreneur have plans for ordering inventory?
   
   
3. Where will the store be located if it has a brick-and-mortar location? What about parking? Is the store in a high-traffic area such as downtown, or is it more remote, and what impact will that have on business hours and accessibility?
   
   
4. What permits or licenses will be necessary to operate the new company? Licensing will depend on where the retail store is and what it sells. Is there a time frame for the new business owner to wait for the permits to be ready? Do the licenses they need come with a fee?
   
   
5. Is this store based in a permanent space, or is the new business person testing the waters with a pop-up store? On what research have they based this decision?
   
   
6. Who is the target market? What demographic are they part of, and how will they learn about the new business?
   
   
7. What are the plans for a marketing strategy? Identify specifics, such as a website, social media, an online store, and advertisements the business has planned for print or the web.
   
   
8. What are the hours of operation? New business owners should consider their target market and the hours they keep.
   
   
9. How many employees are the company beginning with, and how many does the new business owner envision adding over the first six months? What about during the first year? If the company starts as a sole proprietorship, the owner will not need to worry about this.
   
   
10. Where will the business owner find new staff/workers, and what is the hiring process?
    
    
11. What is the new business name? Has the entrepreneur secured the title and ensured no one else is using it? Did the business owner register a domain with the same name? What about a business slogan: does the business owner have one? Have they designed a logo?
    
    
12. Where is there a demand for these specific services, and how can the new business owner best meet the needs of their consumers? A brief summary can show that the new company owner has thought about what sets the store apart from the competition.

2. Focus on Brand Relationships

New business owners should analyze the market and their would-be customers and figure out exactly what to sell and what not to sell. Then, choose to offer goods and services that are in demand and hopefully set the store apart. This idea of focus will benefit the entrepreneur much more than running a store that sells various goods.

New store owners should also build solid relationships with customers, suppliers, and vendors. While it may seem that the only aspect new business owners should invest in is sales, it is just as vital to focus on relationships.

Customer service should also be a priority during the early phases of the new retail store. Companies that do not simply consider their customers, but care about them, perform at a higher level. We can see this philosophy in the monumental global success of Amazon, which started as a small online bookstore. Amazon was obsessed with customer service, and the corporation rode a wave of positive customer experiences right to the top. Plus, research shows that over 50% of US consumers admit to spending more on companies with high-level customer service.

When vendors feel not only welcome but appreciated, they let the store know first when they have new products. For example, let’s say that the retail store sells a famous line of sweatshirts, and recently they have sold out all over. Sales will increase if the vendor supplies the store with a new order before any of its competitors. How can new company owners incentivize the vendor to do that? New retail store owners can meet with top vendors a few months in and devise strategies to try out. A good relationship with a vendor can become a rewarding partnership that boosts sales and cements a company’s impact.

3. Use a POS System

A POS or point of sale system is one of the most vital tools new business owners can use during their retail store careers. These systems provide multiple valuable services. While many only think of POS systems in sales and checking out, these tools can also help manage inventory, employees, and customers, depending on the business’s chosen system. Of course, this depends on how much owners can budget for their POS systems. It is possible to upgrade some scenarios as the business grows.

One of the most notable traits of a POS system is the ability to provide analytics and data about the store’s performance. For example, if the new business sells men’s clothing, perhaps denim jeans make up 30% of the expected profits. However, a store specializing only in denim opens nearby, offering jeans for a lower price as a starting special. Naturally, the new business owner feels this is cutting their profits on men’s jeans. It isn’t as easy to track the numbers without a POS system.

To pick out the POS system that works for the size and market of the business, we suggest conducting careful research 3-4 months before opening the doors. POS systems vary widely, and though several reputable and trusted companies exist, different businesses require different systems. We recommend that entrepreneurs list what they see as essential features of the new system. Then, use the web to research or talk to other business owners in the field about what they like and dislike about their methods.

4. Focus on Staffing

During the opening days of the new retail business, entrepreneurs often find themselves filled with optimism. However, individuals soon find out that there is no way they can take care of the numerous tasks without help. Running a new store requires both managerial work and an assorted collection of busy work. When new store owners attempt to control everything themselves, they become overwhelmed, and their work suffers.

Finding the correct employees for the company is a process like no other, and there is no automatic correct answer for how to do so. However, reviewing the business plan can help with the hiring process. For example, when entrepreneurs first envisioned the business, whom did they picture working there? How many employees did they expect to hire? Here are a few more tips on the hiring process.

1. It is important to remember that employees represent the business and the brand. Although most entrepreneurs see themselves as the focus, the truth is that the company’s employees are the ones who routinely help the customers. Recognizing that the staff will be the face of the retail store will inform the new business owner’s choices.
2. If new business owners do not already have a hiring strategy, they will need one. Take the time to jot down a few notes or make a to-do list regarding the ideas. Referrals can come from colleagues, competitors, and family and friends. Some store owners put up flyers, and others post their openings on employment platforms such as Indeed.com and LinkedIn. Social media can provide a helping hand if the individual targets the right people.
3. Will the new owner be conducting background checks and running checks on credit? Will they be drug-testing prospective employees? Or, will the new business owner trust their employees and rely on their references and online research? If they are scrutinizing references, what sorts of questions will they plan to ask, and how many?
4. We encourage new owners to prepare for the interviews. Set up a system and keep things moving along according to schedule. Have a list of questions but do not worry if each discussion proceeds a little differently.
5. Once the new business owner has hired some new employees, they need to ensure that they have a comprehensive plan for training. Define what the most important tasks are. Consider opening and closing the store, safety protocols, selling and upselling, and customer courtesy.

5. Utilize Marketing

When entrepreneurs start a store, they constantly check on their running costs. Sometimes, new entrepreneurs find that their budget needs to be updated.

A business must attract customers, and if they can continually work to bring in new interests, that will get the store started right. So how can a new business owner take care of their marketing goals on a minimal budget?

Social media can provide one solution. Facebook is one of the more affordable places to run ads. New business owners can choose what they want to spend, monitor the ads for a few weeks, then make necessary changes.

Other social media sites offer the chance to connect through building a company page. Most of these are free to use, and sites such as Instagram offer the ability to upload pictures, videos, and stories.

Social media allows new brands to build quality customer relationships through social media channels. The new business owners can speak directly to their clientele, and that type of dialogue can go a long way toward creating new revenue streams.

6. Understand Startup Costs

Startup costs can quickly add up, and running cost-analysis processes is vital to the health of all companies. Here are a few ways that new business owners can get started.

When monitoring business costs, including startup costs, be mindful of:

• Rent and any utilities
• Inventory
• Advertising and marketing
• Paying employees
• PR and marketing
• Insurance, plus legal fees and taxes. For a startup, taxes can be challenging to estimate. Therefore, contacting an accountant is a great idea. Here are a few more categories new business owners should stay on top of:
• Gross margins: These correlate with business profits. A company’s margins must be significant enough to cover its expenses.
• Total sales: Startup owners should be aware of the volume of items/goods/services that their company is selling by the day, week, month, and year. Chart the fluctuations and look for positive and negative trends.
• Department sales: Analyze the inventory: what items are performing and what are not? Be aware of the rise and fall of the company’s sales. When sales rise, what are people buying? On the other hand, what merchandise hasn’t sold? As the business performs, owners can make more informed decisions regarding sales.
• Employee sales: Which team member has been selling effectively? Instead of making this a divisive issue, it can be a friendly competition, or supervisors can offer commissions or incentives. Sometimes, an employee struggling with making sales is suited for another position, such as social media marketing or working the register.