How to Start a Retail Business
Many potential businessmen are asking how to open their own retail store from scratch and what to do for a spectacular opening.
This type of entrepreneurial activity is considered one of the easiest in the organization and well paid off. In fact, the situation is far from being so clear. The future owner of a point of sale has to solve a lot of questions, collect a huge number of documents, enter into contracts with third-party services. Incorrect actions can lead to denial of business registration, various fines, and other unpleasant consequences. We will tell you how to act correctly.
What it takes to open a retail store
To create your own business, you need to solve a lot of questions. Among the most important can be distinguished:
- Collection of several documents and registration.
- Selection of premises and equipment.
- Business plan creation.
- Choice of the form of taxation.
But even when everyone has already prepared and the point of sale begins its work, what else will have to be done to open a store correctly and efficiently – will have to take care of attracting a constant flow of customers and other issues.
Pros and cons of a retail business
This type of business is not for nothing the most popular. It really has a lot of advantages over other types of business activities. Among other things, it can be distinguished:
- The clarity for a young businessman. Each of us encounters points of sale from early childhood, which means that we roughly understand how they are arranged.
- Ease of implementation. It is ensured by years of experience in other similar places. It is enough to study them and use the most important advice.
- Easy income/cost and payback forecasting.
- The longevity of business with proper organization of work and brand promotion.
The disadvantages of this type of business also exist and are very important. The most unpleasant can be called:
- High competition for almost any point of sale.
- The need for large investments at the entrance.
- The likelihood of an unsold balance of goods that need to be added somewhere.
- High risk of losing money.
There are other disadvantages, but they are associated with a particular type of store. So the final decision on the creation of your business should be taken in a balanced manner.
Which store is the most profitable?
There is a huge number of options for retail outlets. Some of them are more profitable, others are less. And each requires different costs. Let’s consider the most popular and profitable of them.
This type of retail outlets is very convenient because of its organization and payback. There is no need to issue special licenses, and the markup on products can reach 300%. In this case, profits can be obtained not only from the flowers themselves but also from the sale of custom-made bouquets, various gifts, cards, souvenirs, devices for growing plants, and much more. But that is why there is a very high level of competition. To minimize its impact on business, you need to be well versed in the intricacies of the flower business, as well as carefully select the place of sale.
This option can be considered the most popular, so young entrepreneurs often choose it. The whole secret of success is that people need food always and everywhere, regardless of the economic situation in the country, season, and other factors. But at the same time, its effective implementation will require a large amount of professional equipment, which means that large investments at the start will be needed. On average, the payback of the business comes about a year later.
As with products, such products are required by people everywhere to ensure an adequate level of hygiene. Especially advantageous would be an open shop in a small village (village or village). In this case, it is much easier to store household chemicals, so you do not need to make an impressive investment. The payback period exceeds 1.5 years if you correctly approach the choice of product range, pricing policy, and other organizational features.
Children’s store: toys, clothes shoes
I can call the main advantage of such a point of sale the ability to sell goods at high prices. Of course, in this case, it must be of excellent quality. Young parents prefer to save less on their children. But you will have to take care of creating the right atmosphere in the room, most likely, you will need the help of marketers. Properly placed positions will undoubtedly increase sales, especially with little competition from other firms with similar products.
This business can be profitable if you do not sell elite expensive furniture for the home, but economical options available to the middle class. In this case, it will also be possible to reduce the cost of opening, easily recouping it in the first year. If an additional contract on a direct relationship with the factory engaged in the manufacture of items, the consumer will be able to get high quality at a fairly low price, which means the flow of customers will increase. The minus can be called the need for careful consideration of logistics services, including delivery service to the client.
Building materials store
Finishing materials, as well as equipment for repairs, can be sold at a perfect markup, which results in high income and profitability. However, effective work requires spending a lot of money when entering the business and constantly update and modify the range of products.
A car spare parts store
Such a business is always relevant, regardless of whether it opens in a big or small city. The point of sale can be made universal, that is, selling parts for all cars, or specializing in specific brands. If you find your niche correctly, you can gain a foothold in the market for many years.
Selection of trading equipment
Types and models of equipment to be purchased depends on the type of company to be opened, but this item will, in any case, be the most impressive. Usually, the list includes showcases or shelves for displaying goods and refrigerators. They should be selected according to the range, and carefully studied the functional characteristics. You should also take care that the equipment is easy to maintain and inexpensive to repair.
One of the first stages of the store opening will also be buying or renting a suitable place. At the same time, it is necessary to take into account:
- What exactly will be sold at the point of sale.
- Availability and visibility of it for ordinary people.
- Availability of direct competitors nearby.
- The price of purchase or rent, as well as subsequent utilities.
Sometimes it is necessary to explore the area within a few months to find a suitable option.
Choosing a Supplier
For effective work, it is necessary to cooperate with not one but several wholesale points, warehouses, factories. This will provide additional reliability and regular deliveries if any problems arise with one of them. Special attention should be paid to those companies that can offer a wide range of products at low prices. An additional advantage is brand recognition. Their good reputation guarantees timely delivery of goods and high quality.
Searching for personnel
What is needed to open a store in addition to the premises, equipment, and suppliers, is a professional staff. Indeed, competent professionals require large salaries, which means that sometimes it is more profitable to find young and inexperienced workers and train them properly. However, there is some risk that a trained employee may move to work in another company.
Attracting first clients
Marketing is constantly evolving and changing. Today there are many options to attract new customers. Among the most popular remain:
- Distribution of leaflets with a bright design.
- Posting ads.
- Advertising in the media and on television.
- Rental of banners.
- Internet advertising.
Which of them will be the most effective difficult to say. Again a great influence has the store itself, its location, the potential market. It is best to choose two or three methods at once to get an effective result.
It is not so difficult to open your store if you follow already developed and prepared rules. Carry out a thorough analysis, draw up a scheme of action, attract specialists and you will be able to build a profitable business, bringing a consistently high income.