12-Step Guide to Starting a Retail Business in 2025

Point of Sale FunctionsStarting a Business
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Martial A.

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Thinking of starting a retail business? That makes you one of thousands of new entrepreneurs setting up shop every year. But without a clear roadmap, it’s easy to waste time and money.

This step-by-step guide covers how to start a retail business in 12 actionable steps, from choosing your idea to hiring staff and optimizing your store’s operations. Let’s dive in.

💡 Key Takeaways:

  • To open a retail business, you must first choose a niche and retail format that aligns with your skills, interest, and local demand.
  • Write a business plan that includes startup costs, pricing strategy, and revenue projections.
  • Legally register your business, obtain permits, and secure insurance to minimize risk.
  • Finally, use tools like POS systems, staff training, and supplier management to build out your operation.

How to Start a Retail Business in 12 Steps

Starting a retail business involves more than picking a product to sell and opening your doors. From market research to operations, every step matters. Let’s break down exactly what you need to do.

Step 1: Choose Your Retail Business Idea

The first step is to figure out what kind of retail business you want to start. Begin by reflecting on your interests, skills, and local demand. Then dig into the financial viability.

✅ Identify your interests and strengths

Think about what products or services you’re passionate about or knowledgeable in. Your enthusiasm will motivate you, and your expertise will help you better serve customers.

✅ Assess profitability

Research market demand, typical pricing, and profit margins in your chosen niche. Tools like Google Trends and industry reports can help you avoid costly mistakes.

✅ Study the competition

Analyze local and online competitors. Identify what they do well and where you can offer something unique or better.

Retail Type
Pros
Challenges
Antique Shop
Unique inventory, niche audience, low direct competition
Sourcing quality items, unpredictable demand
Bike Shop
High-ticket items, potential for repairs and rentals
Seasonal sales, specialized knowledge required
Book Store
Strong community appeal, events and partnerships boost visibility
Competing with eCommerce giants, low profit margins
CBD Store
Fast-growing market, loyal customers
Complex legal regulations, payment processing limitations
Convenience Store
Steady foot traffic, essential goods always in demand
Low margins, long operating hours
Dispensary
High profit potential, growing legalization trend
Intense regulation, security and licensing hurdles
Hardware Store
Consistent demand, opportunities for repeat business  
Large inventory and space requirements, competition from big-box retailers  
Liquor Store
High-demand products, upselling potential
Licensing requirements, theft prevention  
Smoke Shop
High-margin accessories, consistent customer base  
Regulatory pressure, limited advertising options  
Thrift Store
Sustainable appeal, low-cost inventory (often donated)  
Inventory inconsistency, sorting and organizing labor-intensive  
Winery
Premium branding opportunities, wine tastings/events  
High startup costs, seasonal limitations  
Vape Shop
Strong demand among younger demographics  
Regulatory scrutiny, product liability concerns 

Step 2: Write a Business Plan

A solid business plan is the blueprint that guides every aspect of your retail store. Whether you’re self-funding or seeking investment, a clear plan is essential.

✅ Plan your marketing

Outline how you will attract and retain customers. Consider social media, local events, email marketing, and online ads.

✅ Forecast finances

Estimate your startup costs and ongoing expenses. This includes rent, inventory purchases, employee wages, and necessary technology or software subscriptions.

What about expanding your business beyond just a website and physical store? Check out our post on multi-channel retailing to learn more.

Step 3: Register Your Business

Registering your business legally establishes your company as a recognized entity. This protects your personal assets and allows you to operate lawfully, apply for permits, and pay taxes correctly.

✅ Choose and register a name

Pick a memorable name that reflects your brand. Check availability with your local business registry and register your domain online.

Decide if your business will be a sole proprietorship, LLC, or corporation. Register with the appropriate state and federal agencies to get your EIN and permits.

Step 4: Get Licenses, Permits, and Insurance

Operating legally requires securing the necessary licenses and permits specific to your location and industry. Insurance protects your business against liabilities, property damage, and unforeseen events.

Pro Tip!

Before launching, contact your local Small Business Development Center (SBDC) or city clerk’s office—they can help you identify exactly which permits, licenses, and insurance types you’ll need for your specific business type and location

Step 5: Find a Retail Location

Whether you want a brick-and-mortar store or an online presence, your “location” plays a crucial role.

✅ Analyze locations

Consider foot traffic, accessibility, rent prices, and local zoning laws. A great location increases walk-in customers and sales.

✅ Launch online if needed

If a physical store isn’t feasible, build an eCommerce presence with platforms like Shopify or WooCommerce to reach customers everywhere.

Pro Tip!

You may want a hybrid retail store with a physical location and an online store. If that’s the case, choose a POS system like KORONA POS that allows you to easily take your store online.

Step 6: Choose and Manage Retail Suppliers

Reliable suppliers keep your store stocked with quality products. It’s up to you to source the best inventory and maintain healthy relationships to ensure a consistent supply.

✅ Source inventory

Build relationships with trusted suppliers by attending trade shows, using wholesale platforms, or partnering with local artisans.

✅ Track and evaluate

Consistently monitor supplier reliability in delivery times and quality. Then, use inventory management tools to avoid stockouts or dead stock.

Step 7: Hire and Train Staff

Your staff are the face of your business. Hiring the right people and providing clear training will build a motivated and efficient staff that supports your business from the ground up.

✅ Define roles and responsibilities

Create clear job descriptions outlining duties, skills, and expectations for each position.

✅ Develop a training program

Train employees on your POS system, customer service standards, product knowledge, and store policies.

✅ Implement onboarding checklists

Use checklists to ensure new hires complete all necessary training and paperwork for a smooth integration onto the team.

Step 8: Invest in a POS System

It’s time to set up your POS system. Choose a reliable point-of-sale system that simplifies transactions and gives you unlimited access to valuable business insights.

✅ Select a cloud-based POS

Opt for scalable, cloud-based solutions like KORONA POS that support multi-store, real-time inventory management and POS data tracking, and mobile access from anywhere.

✅ Integrate inventory management

Use POS features to automate stock updates and get alerts when your inventory is low.

✅ Utilize sales analytics

Leverage retail sales analytics like a daily sales report or sales per square foot calculation to monitor sales trends, peak hours, and employee performance. KORONA POS’s retail KPI dashboard can help you calculate and analyze a list of key performance indicators (KPIs), all at the click of a button.

Step 9: Set Up Store Layouts & Displays

Your retail environment and layout influence how customers navigate and shop in your store. Thoughtful displays will encourage customers to buy while creating an inviting atmosphere.

✅ Design a customer-friendly floor plan

Arrange your floor plan with aisles and product sections that allow easy flow and visibility.

✅ Highlight high-margin products

Place popular and profitable items at eye level and near checkout areas so they’re right in your shopper’s line of sight.

✅ Use signage and lighting strategically

Guide customers around your store with clear signs and spotlight promotions with focused lighting.

Step 10: Launch Your Marketing Strategy

Marketing is essential to attract and retain customers. Create campaigns that build your brand presence and generate traffic both online and offline.

✅ Create a Google Business Profile

Improve local search visibility and share important info like hours and location.

✅ Build a social media presence

Engage customers with posts, stories, and promotions on relevant platforms.

✅ Run promotions and events

Host grand openings, seasonal sales, and loyalty programs to boost foot traffic and sales.

✅ Collect customer contact info

Strong customer relationship management will keep shoppers coming back for more. Start building an email and SMS list for direct marketing campaigns.

Free printable templates and checklists to help you manage retail operations with ease

Step 11: Monitor Your Finances

Keep your business financially healthy by regularly reviewing your income and expenses, managing cash flow, and adjusting your budgets as needed.

✅ Use accounting software

Use QuickBooks, Xero, or similar tools to easily keep track of sales, expenses, and payroll. These user-friendly programs help you stay organized and manage your business finances smoothly.

✅ Review profit and loss statements monthly

Analyze your revenue versus your costs to find opportunities for growth and identify potential risks. This can help you make better financial decisions and plan for the future.

✅ Monitor inventory shrinkage

Investigate discrepancies between inventory counts and sales to identify potential causes of shrinkage and reduce overall loss.

Step 12: Optimize Store Operations

The work is just starting—now it’s time to shift the focus to growing your retail business. Continuously improving your retail store performance keeps your business competitive and responsive to customer needs.

✅ Hold regular team meetings

Engage with your staff by discussing current challenges, sharing important updates, and aligning everyone on common goals to improve teamwork and productivity.

✅ Gather customer feedback

Conduct surveys, review feedback, and hold direct conversations to identify effective strategies and areas needing improvement.

✅ Analyze sales data for decisions

Modify the store’s hours, staffing, product selection, and pricing strategies according to key performance metrics for optimal efficiency. The right retail operations software will make this a breeze.

Discover Advanced Analytics and Custom Reports

Speak with a product specialist and learn how KORONA POS can work for your business.

Challenges of Starting a Retail Business

While launching a retail business is rewarding, it comes with hurdles every new entrepreneur should prepare for. From upfront costs to staffing, here are some common challenges and how to navigate them.

Challenge #1: High Startup Costs

Opening a retail store can be expensive when you factor in inventory, rent, licenses, staffing, and equipment. You can start by budgeting carefully and prioritizing only essential retail store equipment to reduce the cost of money.

Consider reviewing these small retail business ideas to start lean without compromising potential.

Challenge #2: Managing Inventory and Daily Tasks

Without a system in place, tracking stock levels, reorders, and day-to-day operations can be complex. A retail POS kit can simplify inventory tracking and streamline checkout processes.

Pro Tip!

Use a daily retail store checklist to keep your operations organized and running smoothly.

Challenge #3: Training and Retaining Staff

Hiring qualified staff is just the start—keeping them engaged and well-trained is an ongoing effort. Learn how to manage your retail store efficiently with training tools and performance metrics.

Challenge #4: Adapting to Changing Trends

Staying competitive means keeping up with consumer behavior, tech innovation, and industry standards. Track emerging retail trends to stay ahead of the curve and adjust your offerings and operations accordingly.

Challenge #5: Standing Out

With so many retail options, differentiating your store can be tough. Focus on building community and offering personalized experiences to rise above the noise, and use your POS system data to uncover what keeps customers coming back.

Simplify Your Retail Operations with KORONA POS

KORONA POS terminal as one of the best pos for dollar stores.

Running a retail business is rewarding—but complex—and the right technology can remove much of the daily friction and help you scale. KORONA POS supports you at every stage, from opening day to multi-location growth.

Track your inventory, manage staff, automate reports, and create seamless customer experiences from one platform. That’s how you keep your retail business thriving, from opening onwards.

Image of POS hardware of KORONA POS.

Build Your Own POS

Whether you run a retail store, café, or admissions booth, we have the point of sale hardware designed for your specific needs. Start building your ideal POS system now.

FAQs

Do I really need a retail POS system from day one?

Yes. Starting with a solid POS system ensures smooth transactions, real-time inventory tracking, and valuable business insights.

How important is foot traffic when choosing a retail store location?

Foot traffic is extremely important—it influences how many people discover and enter your store. Evaluate traffic data before signing a lease.

 

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Written By

Martial A.

Passionate about SEO and Content Marketing. Martial also writes about retail trends and tips for KORONA POS. He loves NBA games and is a big fan of the Golden State Warriors.