› Starting a Market Venue

Starting A Retail Business
The 8 Factors That Determine Success

Starting a retail business largely depends on your level of knowing the 8 factors that determine whether you will prosper or not. The passion to start a retail store in a traditional brick and mortar location remains very high.

Having started and grown to profitability and then sold three traditional retail businesses, I know the key elements required to make your retail business highly successful.


Starting a Retail Business: 8 Elements of Success

  1. Make sure you are not under capitalized. Have sufficient dollars to spend and in reserve to take care of any financial misjudgments you make in the course of starting a retail business. Failure to have enough money is the beginning of a slow death.
  2. Visit every competitor within a 10-mile radius. Make detailed notes on how each competitor’s store is laid out, the product lines carried, the prices of expected high volume items, the décor and the age and customer service actions of each employee you encounter. Note if the employees are knowledgeable about the products, are they pro-active in approaching you, do they engage you in small talk and is the store clean (restrooms too).
  3. Identify your product distributors, build relationships (take them to lunch), ask questions of them about your competitors, what are the best selling products, what is their return policy, their policy on providing signage, advertising co-op opportunities, what can they do for you during your grand opening, etc.
  4. Obtain the demographic data that is within a 3-mile radius of each potential store location you are considering. Are there the incomes to support your effort? Have you done any person-on-the-street interviews to determine if people are aware of any of your competitors?
  5. Scout your geographic area for potential store locations. Always, always a high traffic location is worth paying more for. Please do not look for the cheapest sq. ft. cost. Look always for the best location; the best location with parking available!
  6. For each potential high traffic location do your homework on what it will cost you to renovate this space. Please do not approach designing the décor of your business on the cheap. Most consumers are visually attentive to the look and feel of a business. If they feel comfortable with the atmosphere outside and inside your shop, you’re halfway to a sale.
  7. Invest in technology to manage your inventory to prevent out of stock positions. The same for your cash register, as it can be tied into your inventory system. Find the best deal for yourself, as a credit card merchant and for check cashing protection so you’re not being paid for merchandise because a customer check bounced.
  8. Lastly, please, please train every single employee prior to them going on the sales floor. The key to profitability of your store will likely depend on the quality/training of your employees. They are literally your cash register, the people who will make the sales for you and put money into your bank account.

At some point you may wish to have an online presence. remember there is a huge difference in just having a website vs. a "business" website.

With mobile search in nearly everyone's hand, phone books are dead. Therefore, a solid business website is becoming more imperative to a retailers success.

If your time is a factor, then they can build a winning site for you at a very reasonable fee.

Professional Retail Resources

Small Business Administration: Starting a Retail Business

National Retail Federation

Retail Merchants Association


Additional Small Business Ideas

 

 

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