A guide on how to open your retail shop in 6 steps

A guide on how to open your retail shop in 6 steps

| Business

Many people dream about having their own shop. A florist, a shoe store, a furniture store, a toy shop, or a grocery store – whatever the business is, it will broaden your horizons and give you new opportunities for self-fulfillment.

If you already have an online business and are thinking about starting an offline one, this guide is for you. If you've never run a business but dream of doing so, this guide is for you too! It will walk you through the process of opening your store and tell you where to start.

Step 1: Gather and analyze resources

Gather and analyze resources

You need to ensure you have enough resources to get started. It's not just about tangible resources but intangible ones as well. For example, you need to factor in:

  • your premises (or the cost of renting one);
  • your start-up budget for sales and promotion;
  • your financial cushion to cover the first 3-6 months;
  • commercial equipment;
  • employees or assistants;
  • your business experience or expertise;
  • business connections;
  • the relevant documents (or willingness to obtain them);
  • and, consequently, free time.

Step 2: Choosing a niche and product vision

Choosing a niche and product vision

The choice of a niche decides everything, including whether your business will be able to launch and develop to its full potential. Analyze your options from all angles.

  1. Assess the level of competition. Do not choose a broad niche where big players already exist. Start small and work your way up. That is, start with a narrow segment that already has a clear audience and is relatively free for new players to enter the market. You can expand into a larger niche at any time if things work out with the small one. Doing this is a much safer bet.
  2. Check if you have competitors, and there should be! After all, if there are no competitors, there are no customers in that niche, which doesn't suit you either. You must have bigger competitors, but not giants.
  3. Add another +50% to your budget. As a result, you will get the actual figure that you need to launch your store. After all, there are always additional complications and costs. According to statistics, 70% of start-ups miscalculate their budget, so it is better to form a large margin.
  4. Avoid seasonal demand. If you intend to sell, for example, bathing suits, living somewhere in Europe, then be prepared that you will make a profit only in summer and fall, during the holiday season. Most merchandise will be idle in winter and spring, a killer for a fledgling retail store.

With this in mind, choose the product you want to promote. Remember that it has to be unique and super useful! When going into retail, focus on a small range of products - three or four tops. You don't have to retail your entire gigantic catalog, even if you already have an online store. Here, too, the rule "from small to large" works.

Step 3: Work out scenarios

Work out scenarios

You need a business plan and also a step-by-step plan to tackle different situations. In total, three scenarios are possible:

  • a worst-case scenario (no customers, no return on investment, the store goes bankrupt);
  • a realistic scenario (all processes are gradual);
  • a best-case scenario. You have stumbled upon the goose that lays the golden egg, and with cash-cow, and you've had customers from the get-go).

Being prepared for all eventualities saves you up to 40% of your budget and ensures you won't run into an unsolvable crisis.

Step 4: Looking for a place to trade

Looking for a place to trade

That is the most important thing of all! You must choose a site that has excellent footfall and provides a steady flow of customers. A poorly chosen location, for example, if you decide to skimp on paying for a decent location, could ruin even the best business idea. So, when choosing a site, there are three golden rules:

  • A Hub - connect to a traffic point, for example, near the underground, an ever-crowded bus stop, a cinema, a popular cafe, etc. That is, the location should be such that as many passers-by see it as possible. Proper promotion on the Internet, of course, can compensate for the lack of people in your location, but it is better not to gamble.
  • Accessibility - customers must be easy to get to, which means you should not choose the outskirts of town and fenced-off warehouses. Ideally, parking and public transport should be nearby.
  • Logical positioning. If you sell luxury goods, your shop should not be located in a residential area or near the grocery market. In that case, you should choose a business center or the main streets of the city.

Step 5: Looking for suppliers

Looking for suppliers

If you immediately start with an offline shop, bypassing online, then you probably need proven manufacturers for your product. Many businesses turn to global giants such as Alibaba or AliExpress for this. The key when choosing a supplier is to evaluate it against four criteria:

  1. Reliability. Read reviews about the supplier and check their honesty in calculations and commitment by ordering a trial batch of goods.
  2. Value for money. You want to recoup your costs, but they have to be as low as possible.
  3. The range. It's best if the supplier offers a wide range of products, because what if you want to enter a broader niche in the future? Then you won't have to look for a new supplier.
  4. Personalization. You don't just need to sell someone else's product but also make it unique. For example, negotiate with your supplier for a new design or a new feature. Adding your logo to the product is already a good idea.

Step 6: Go through the red tape

Go through the red tapeLicensed retailers will need to set up a sole proprietorship or a limited company and to do this you have to get the correct paperwork first. It is better to choose a sole proprietorship, as it is easier and more profitable: you can work from anywhere, there are fewer fines and less accounting.

Does this sound complicated? This is just a quick guide to outlining the general features of how to open a retail shop. If you want to do it right and have all the details covered, it's much quicker and safer to take Lectera's course "Open a retail store: from concept to implementation." Learn the basics of category management and merchandising, sales promotion and retail management techniques, and learn how to manage business processes, reduce costs and understand customers.

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