Starting a retail business can be an exciting adventure that requires a great deal of planning and forethought
However, most potential business owners will need to carefully consider the type of retail business they will operate.
And; they will need to put together a business plan that includes financial, marketing, and organizational factors.
These are necessary not only for proper planning, but also to convince a bank that your retail business is a good investment.
Deciding to Start a Retail Business …
When starting a retail business, you as the owner will first have to decide what type of retail business to open.
For example, a high street storefront retail business will have different needs to a home based internet based retail business.
You should also consider whether to purchase an established independent business or if it may be easier or better to buy a franchise, before you consider opening a completely new storefront.
How you answer these basic retail business questions will affect how you put together your business plan and the costs factored into your financial projections.
You should also know and completely understand exactly what a retail business is, and that retailing involves selling small quantities of goods or commodities directly to consumers.
That there are usually no large account customers and rarely will you process repeat orders. Both the above factors contribute to why retailers charge the premium prices they do.
Starting a retail business means selling day-to-day with little or no order book to rely on.
Creating a business plan is not only a smart move when starting a retail business, it is almost always necessary to obtain financing.
Basically, any bank or financial institution will want to know that careful thought and planning has gone into your decision and that their investment is safe and will be returned with interest.
Any bank you choose will also want to see a financial plan, a marketing plan and an organizational plan.
Online e-tailing as opposed to high street retailing, is where you have no physical storefront and you retail your goods online.
Premium retail pricing is still used for your business model, but you may be able to offer lower more competitive prices as you will not have to bear the costs of opening, staffing and promoting a phystical location.
However there are other incidental costs, which you should bear in mind, including retail website design, website promotion and SSL secure shopping carts.
If necessary, you may need bespoke e-tailware, which is software for creating online catalogs and managing your online retail business.iDex7
These plans should also include your goals and objectives such as how your retail business will satisfy the needs of your customers.
Your Financial Plan …
Before starting a retail business, an owner must carefully consider all the financial components.
This includes start-up costs and operational costs such as staffing costs and rental or mortgage payments.
For both of these, capital is a major concern. Ask yourself if you have existing capital to invest, can you raise interest free capital or will a bank or business loan be required?
Retail Pricing, of your product line, merchandise, and/or services will also play a part as projected profit margins will help determine the projected income and profit resulting from your retail venture.
Your Marketing Plan …
Including a marketing plan in your retail business startup is essential.
Of course, it’s always a good idea for any business owner to know ahead of time who their target market is and how they will target that market.But when starting a retail business this is even more important.
Your marketing plan includes proposals for packaging, branding your products and strategies for utilising social media or a branded website that can incorporate automated email lists. Knowing how you will use these things beforehand, will save you having to guess and will also help reassure any financial institution that their investment will be well protected.
Your Retail Organization Plan …
Starting your retail business will also require an organizational plan.
This will include a general description of your retail business including your products, services, location, size, staffing, management, accounting procedures, insurance, suppliers, and security, to name just a few.
Compiling and knowing these basic business details will help you anticipate any adverse issues that may arise. It will also convince your bank, that you understand your market segment and you know the retail business and whether yours is a good investment.
Still Ready To Start a Retail Business? …
Starting a retail business can be exciting, but it does take a lot of work and planning.
As owner you must understand the requirements to obtain funding and to run the business.
This includes knowing the needs of the various types of retail stores so that finance, marketing, and organizational plans can be created and implemented.
This will not only make sure your retail business runs smoothly but can help convince a bank to fund your venture.[x_message type=”info”]Do it right and starting a retail business has every chance of success. Plus, you’ll be able to enjoy those early, exciting and challenging times, rather than panicking every time something unexpected happens.[/x_message]