Starting a new business venture can be challenging, rewarding and fulfilling at the same time. Unfortunately, many small retail businesses struggle for their first few years or even shut down entirely. Building a thriving business is certainly not easy. Without proper business planning and a retail business plan, chances of success are slim. So what should be your priorities when you’re thinking about how to open a retail store? Whether it’s your in-store experience or your retail POS system, here’s our list of a few of the most important to remember.
Location Is Everything!
There’s a reason that prime retail real estate is more expensive. A good location will typically generate more sales. This doesn’t mean that you need a spot on 5th Avenue, but choose your location wisely and don’t be afraid to spend a little bit extra for a great spot. Many new retailers think a lower rent is worth to minimize overhead. And, to be sure, it’s vital to manage your budget well when opening a new business, but there are certain realms where the money spent is worth it.
Traffic into your retail store will never be instantaneous. And having a great location with a lot of foot traffic is a key to your initial success. People who stumble upon your business will also be more likely to tell their friends and family. Plus. without foot traffic, you’ll simply be spending the money you saved with your cheaper rent on more advertising and marketing. In addition to making sure you have steady foot traffic, here are a few other factors to consider with your location:
- History of the Building – What other companies have been there and how successful have they been? If five restaurants have been in and out in the last seven years, you might not want to open yours there.
- Structure and Utilities – Is the building structurally sound or will it pose problems to running a smooth operation down the road? What will additional costs be? Make sure you ballpark your utility bills.
- Accessibility – While lots of foot traffic is the most ideal, convenient parking or pull-off space is also important.
- Demographics – Who lives/works/shops in the neighborhood? Are they your target audience? You want to be in a location that is filled with potential customers.
- Competition – Check out any competing businesses in the area. Some competition isn’t necessarily bad and is often unavoidable. But you don’t want to open the fourth party store on the block.
- Other Businesses – Those who aren’t direct competitors are just great to have around. If you plan to have employees, look for restaurants nearby for lunch or happy hour. Gyms and daycares are also great to have nearby.
Your Customer Shopping Experience
Brick and mortar retail is one of the most competitive fields of any type of business. No longer can a typical retail store compete with prices offered online. But try as they might, eCommerce has yet to replicate the person-to-person contact that a customer gets in a brick and mortar setting. Most customers still prefer this, even if it comes at a higher price. Focus on how you can facilitate excellent customer service when opening a new retail business. Here are a few things to keep in mind:
Staff and Training
- Have an idea of your ideal staff member and write your employment postings and interview questions strategically. Look for people who are passionate and detail oriented. Your staff will be reflecting you and your business so make sure you like them! One bad customer service experience can send a client packing for good. And they’ll probably tell their friends. Positive word of mouth is the most important marketing tool for any new retail business. Also be sure to implement a consistent and thorough training program. Be open to feedback from staff and potential changes in procedure and policy. Starting a new business means working out some kinks in the early phases. Plus, this will show trust and appreciation of your staff.
A Smart Store Layout
- Put yourself in your customers’ shoes. Walk your layout and have some friends do so as well to get outside opinions. Think about what you want customers to see as they approach your storefront and as soon as they walk inside your doors. A good initial impression is crucial. Make sure the space is welcoming and optimistic. Sprinkle some of your favorite products near the front to get customers excited right off the bat. Once you open, you can always
Engage the Customer
- Add benefit that the customer wouldn’t find elsewhere, especially online. Highlight your promotions or grand opening sales and inspire curiosity. Offer free trials, samples or anything hands-on that is applicable to your product. People like to try things before making a purchase. You can also host a community event or party to celebrate the opening and promote your new retail store.
Carry the Right Products and Implement Great Inventory Management
Order Product Wisely
- You’ll have to order a large amount of product prior to opening. For many retailers, this is the biggest investment of the entire process. Conduct extensive market research prior to your purchase. It’s unfortunately not as simple as picking products that you love. While you might have impeccable taste, everyone else doesn’t. You want to cater to a larger audience initially and narrow it down from there.
Find Reliable Suppliers
- Find the right suppliers for the products you want to carry. Suppliers want you to sell the product as much as you do. They often offer bulk order discounts and will be happy to suggest related products that might be a good fit. Prior to opening, form a good relationship with your suppliers and choose people you trust and respect.
Use Advanced Inventory Management
Once the products actually arrive, you’ll need a proper inventory management system through your retail point of sale. The best retail POS systems come with versatile inventory software. You can easily catalog each of your products, create automated ordering and see detailed sales reports down the road to help you better gauge a certain product’s value to your store.
Automate as Much as Possible
Not only can you automate inventory and ordering, but your POS solution can also help with payroll, scheduling, accounting, loyalty programs and much more. Try to automate as much as possible from the beginning to streamline operations once open. Be open to technology. It will save you time and offer more peace of mind when you’re not physically on site.
See Related: ABC Retail Analysis – ABC Analysis Inventory Management Software
Determine Your Pricing Strategy
Pricing products properly is a much more difficult task than it might seem. Rarely do retailers mark up each product at a consistent percentage. Rather, each must be optimized to maximize its profit potential. Some items will be marked up higher but you plan on selling fewer of them. Others will fly off the shelves but provide a smaller profit with each sale. Adding an additional layer is promotional strategies: discounts, bundling, coupons, and other sales must be approached with caution, especially during the opening of a retail store. Pay close attention to the numbers and final bottom line to determine the best course of action going forward.
See Related: Increase Retail Profits with Advanced Pricing Strategies
How to Start a Retail Store with KORONA
Opening a retail store is a brave task. Take the proper steps beforehand and set yourself up for a more successful launch. We’re also here to help. If you’re still looking for a point of sale system, click below to try out KORONA for free. We offer 24/7 support and free installation to help make opening your business as stress-free as possible.