Owning a store checklist for business owner

Discover the essential checklist for aspiring retail store owners, focusing on meticulous planning and relationship building over mere sales. Learn the crucial aspects of POS systems, hiring, marketing, and financial metrics for a successful start.

By Douglas Wade, Attorney

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Table of Contents

What to know before owning a retail store

1. Have a plan for the store

2. Focus on building relationships rather than sales

3. Not all POSS systems are made equally

4. Identify the right employees

5. Make the most of social media and additional marketing resources

6. Recognize your important financial metrics and launch costs

What to know before owning a retail store

Although running a retail store can be incredibly fulfilling, if you’ve never done it before, it can also be challenging to manage your business. There is a fine line between reaching your objectives and not, even as an accomplished retailer.

Here are six things you need to understand before opening your new retail location because there is a thin line separating success and failure.

1. Have a plan for the store

Every company requires a business plan. Your business plan’s thesis basically states why you want to operate a retail store in the first place. A business plan, in its most general definition, is just a summary of your company’s aims and objectives together with a strategy for achieving them. It might be as easy as getting out a paper and pen and writing down your thoughts.

These are the 12 questions that your company plan needs to address:

What is your company’s legal structure? Do you operate as a corporation, partnership, or sole proprietor?
Which goods and services do you offer? What distinguishes them from your rivals? How are you going to source inventory?
Where is your retail store located?
Do most of your clients drive to your location, or are you in an area where foot traffic is heavy? If the latter, you will need to have enough parking.
Will you establish a temporary pop-up store to test the market before investing in a permanent location?
Which licenses or permits are necessary for you to operate?
What is your target market, or who will be your customers?
How are they going to learn about your store?
Do you use websites, online stores, and social media as part of your marketing strategy? How are you going to enter the internet retail space with your physical location? Which online marketplaces or e-commerce platform will you use?
What time do you open and close?
How many workers will you require each week?
Which job search sites would you use, and where will you look for these employees?

If at all possible, get input on your retail store business plan. You may try to find a professional mentor who can examine it, or you could run it by some friends who own retail establishments. Consider joining your local Chamber of Commerce if you’re still having trouble.

You can meet other local business owners who can offer you advice at networking events that you can attend with a membership.

2. Focus on building relationships rather than sales

When you run a retail store, you’ll constantly be monitoring your sales and those of your rivals. After all, you won’t last very long in business without sales and revenue. At the end of the day, it’s critical to know how much money is in your cash register. How are you going to outperform your rivals if you have no idea what they are doing? As a retail business owner, though, you need to achieve more than financial success. Instead of only focusing on boosting revenue, prioritize building relationships with your clients. Develop a rapport with your suppliers.

Any new company should prioritize offering top-notch customer service, and the data supports this. What was the name of the little online bookstore that opened its doors in the middle of the nineties? That business is Amazon, which has developed into one of the most well-known and prosperous retail brands in the world. They have been consumed by their clients since the beginning. They go above and above to ensure that their clients are satisfied.

According to the same survey, customers often tell three times as many people about negative experiences as they do about positive ones: an 8 to 21 ratio. Forty-six percent of consumers report sharing positive service experiences with others, but sixty percent claim to share negative experiences.

Developing a rapport with your suppliers is also essential. After all, you wouldn’t have anything to offer your clients if it weren’t for their goods and services. When it comes to your vendors, you should have the same priority as you do with your customers during their journey. You will receive the first notice whenever they introduce new products.

You’ll most likely be one of their first contacts if they have a promotion or special that lets you get specific things at a discounted price. Indeed, you will most likely be the recipient of any freebies that they may offer in the future.

The best you can do for your rivals is to be considerate. You would be astonished at how much you can pick up from your rivals. Who knows, you might even discover a company that will work well with yours and establish an unexpected alliance.

It all comes down to networking. Your chances of success increase if you devote some time to fostering relationships with the people you come into contact with while operating your company.

3. Not all POSS systems are made equally

A point of sale (POS) system is some of the most crucial equipment you’ll require if you intend to run a retail business. In addition to streamlining the checkout process, point-of-sale (POS) systems can offer features for customers, staff, and inventory management. However, what matters most is that they offer statistics and data regarding your company’s performance.

What if 25% of your sales at your women’s clothing store come from the sale of novelty and vintage T-shirts? The T-Shirt Guru appears out of nowhere next door. What impact will that have on your department’s sales? You might never know in the absence of a point-of-sale system.

Given how essential a point-of-sale system is to your whole retail business, you should take your time and do your homework, at the very least, ninety days before your grand opening. Not every point-of-sale system is made equal, and what functions well for one company might not be suitable for yours. Ideally, you will take a seat and identify the things you hope to gain from a point-of-sale system. Sort your must-haves, deal-breakers, and nice-to-haves (or maybe future features) and move forward from there. Above all, give yourself enough time to go through the appropriate channels of research. Point-of-sale systems are not created nor installed or configured in a single day.

4. Identify the right employees

When your retail store first opens, you’re so enthusiastic and full of energy that you mistakenly believe you can handle everything on your own. You will soon discover, though, that this is untrue, and you will have to bring on a few staff members.

Employees serve as ambassadors for your company and brand. They will be the ones interacting with your clients the most. As a result, they will bear the main responsibility for delivering a satisfying client experience. It is imperative that the appropriate personnel be recruited.

Hiring can be a laborious and time-consuming process for companies of all sizes. So how can you locate the ideal staff members for your store? There are steps you can take to make sure you find the top applicants, but there isn’t a simple answer to this question.

Developing a hiring plan is one thing you should do. Will you seek recommendations from dependable people such as friends, family, or coworkers? Alternatively, will you list job openings on local community websites or on employment search engines like Indeed?

After you have identified a few prospects, specify the requirements of your screening procedure. Will you be performing credit checks, drug tests, or background checks? Or are you merely going to depend on searching the internet to check if any suspicious activity appears on their social media profiles? What kinds of questions will you be asking these references about the candidate, and how many references will you request? You should think about all of these factors before notifying someone that they’ve hired you.

5. Make the most of social media and additional marketing resources

One of the greatest things about using this strategy to expand your small business is that you can accomplish a lot of it at a comparatively low price.

For instance, there are numerous methods and indicators available to calculate the cost of Facebook advertising, including industry, demographics, and user behavior, to mention a few. Spending is limited to what is in your budget.

Free marketing includes making a company page, updating, updating photographs, updating statuses, and checking in. To return to our original argument, interacting with other users on social media to establish relationships with them—whether they be present or prospective customers—also costs nothing.

6. Recognize your important financial metrics and launch costs

It’s simple to underestimate the true startup and operating costs of a retail store. It is vital to possess a comprehensive comprehension of the initial expenses involved and the financial indicators that you must track to ensure achievement.

Here are some of the main initial expenses to consider in order to get started:

Costs of utilities, rent, and building upgrades
Inventory
IT services and hardware
Recruitment
PR and Marketing
Compliance with laws, taxes, and insurance

To stay on the path to profitability, you’ll also need to keep an eye on your funds. Yes, you can engage an accountant, but any decent business owner should be aware of their company’s current state. Here are some items to keep an eye on:

Total Sales: Tracking your total sales over a period of time, such as a week, month, or day will help you gain a basic idea of how well your company is doing.

Gross Margin: Use the following formula to compute this metric: (Total Sales – Cost of Goods Sold) / Total Sales is the gross margin. Your profitability is closely correlated with your gross margin. Thus, your margins must be high enough to pay for all of your operating costs.

Sales by Department: Knowing how your inventory is performing is one of the keys to being successful in the retail industry. Too many companies fail because they don’t offer products that customers genuinely desire to purchase. You might examine departmental or even product-level sales data to identify patterns and steer clear of carrying outmoded merchandise.

Sales Per Employee: You should also keep an eye on how well your group moves merchandise. To compute this using a basic formula, use this formula: Net Sales / Total Employees equals Sales Per Employee.

You can make sure you get off to a great start and continue down the path to success by measuring important financial metrics and keeping an eye on your beginning expenditures.

You ought to be prepared at this point to start your new venture as a retail business owner.

Have a quick question? We answered nearly 2000 FAQs.

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