If you’ve made a thoughtful decision to venture into brick-and-mortar retail, you might race to open your doors as soon as possible. But there are numerous issues you’ll need to address before a single customer sets foot in your establishment. Take some time to reflect on things to consider before starting a retail business.
1. Organizing Finances
After deciding to open a new retail business, you need to get your finances in order. If you don’t have the funds already available, you’ll need to acquire a small business loan to get going. While Small business loans are available, you often need to meet specific standards and have a sound business plan to get approval. You always have the option of approaching private investors and online crowdfunding if a loan isn’t available.
Once you obtain the funding you need, consider whether to lease or purchase a property. Leasing can be cheaper in the short term but may cost more over time.
2. Choosing a Location
Next, you’ll need to consider the location options available for your new retail business:
- Indoor malls
- Outdoor strip malls
- Stand-alone building
- Business complex
Each option comes with pros and cons. For example, you can choose a stand-alone building located further away from the competition. But choosing a more isolated area might negatively influence the level of foot traffic around your new business. Higher foot traffic means more opportunities for potential customers to take notice and come in for a look around.
3. Choosing a Vendor
Your new retail business needs inventory. Once you decide on what types of products to sell, you’ll need to select an appropriate vendor. Purchasing directly from manufacturers is an excellent option if you intend to sell name-brand products. If your operation is smaller than some big-box retailers, approach wholesale suppliers or independent producers to fill your inventory.
Keep in mind the location of your business and vendor pricing. It’s best to find a distribution channel that meets your budget and can deliver goods to your store in an acceptable timeframe.
4. Choosing Data Management
Effective data management can improve customer service. But how does it help you genuinely stay connected with customers long after they make a purchase? You might consider moving to the cloud if you’re looking for a reliable way to access customizable data. Cloud computing allows you to collect essential data on customer history and behavior. In addition, the cloud is a cheaper alternative to outdated data management software.
5. Recognizing Competition
In the world of retail, there’s no shortage of big-box competition. As a new retail business, you’ll have to contend with numerous brick-and-mortar and online shops. Take time to analyze the leaders of the industry. Then determine whether your new retail operation can realistically lure enough customers away from the bigger chains.
There are numerous things to consider before starting a retail business. Take your time and develop a business plan to get your operation off to a solid start.