Many people dream about starting a retail business. Figuring out how to open a retail store, however, may seem daunting.
The process becomes more manageable if you divide it into steps. Whether you want to start a flower shop or a home brew store, follow this step-by-step guide.
1. Decide what to sell
Consider which products to stock, what the product demand
might be, and what profit margin you want per item. For ideas and costs, visit
trade shows, and look through suppliers’ catalogues and websites. You may want
to offer additional services such as repairs and special shipping.
2. Choose a legal structure
In a sole proprietorship, you do not pay business taxes, but your personal assets and legal liability are intermingled with those of your business.
A limited liability corporation is similar to a sole proprietorship except that personal assets and legal liability are kept separate from your business.
A corporation is a separate legal entity from you with its own set of taxes and paperwork. This may seem like a downside, but its separateness makes it easier to expand to multiple locations or sell shares to the public.
3. Pick a business name
Your business name should communicate the nature of the business and grab people’s attention. Make sure no other business in your state has that name by checking on your secretary of state’s website.
To check all states’ business-name databases at once, use the National Corporation Directory.
4. Define the customer experience
Decide how you want your customers to feel when they enter your retail store. Should they feel hip, comfy, excited, intrigued or empowered?
Think about how your store can create that feeling through its merchandise, service standards and interior design. Consider what kind of customer you hope to attract when you open your retail shop as well.
Remember that if you want to appeal to today’s consumers, you should sell items online and have a social media presence.
5. Get proper registrations and licenses
Understand what business registrations, licenses and permits you need for your city, county and state. Consider getting a lawyer to help with this stage of planning for your retail store.
If you have employees or are incorporated, you need an employer identification number for federal tax purposes. Get one through the IRS website.
6. Write a business plan
A business plan describes the goals and structure of your enterprise. When you reach out to lenders for business loans, you will have to provide a business plan.
A business plan is also useful for you personally. It forces you to think seriously about all aspects of your business. Yes, this requires some research, so consider hiring someone to do it for you.
A business plan should have the following sections:
- executive summary
- company description
- market analysis
- management and staffing plan
- marketing plan
- financial startup requirements and five-year projection
7. Find a location
Consider lease or purchase prices, of course, but don’t forget to think about neighborhood desirability, amount of foot traffic and visibility.
Next, search for available properties for your retail store in your selected neighborhoods. You may need patience while searching; once you find a good location at the right price, be prepared for competition.
8. Design, equip and stock the store
Keep your goals for customer experience in mind as you select shelving, flooring, wall treatments and décor. Don’t forget what your staff needs, too: storage space, staff rooms and bathrooms, and practical sales areas.
If you are offering services, ensure that your staff has room to provide these services. Establish great relationships with your vendors; you need to get merchandise into the store not only by opening day but also for future orders.
9. Hire staff
Be picky about who you hire, and train them thoroughly, keeping your desired customer experience in mind. Have staff in place before the store opens so that you can test systems and policies before the first customer walks in the door.
10. Launch a marketing campaign
The goal is to reach the customers you hope to attract when you open your retail store. Consider how and where they live, and plan your marketing accordingly. Your signage inside and out should reflect the branding your store uses in ads and social media.
11. Open for business (quietly)
You can stress-test your retail business with a soft (unadvertised) open. Give yourself two weeks to iron out the kinks.
12. Make a splash with grand opening
Entice customers with discounts, free food and entertainment, and anything else you need to make a great first impression.