8 Best Ways to Start a Retail Business
Owning a retail business is a dream of many people. Although it may sound easy, starting a retail business requires strategic planning and effort. Not only do you need money but also good knowledge of how retail businesses work. To help you create a retail business plan more easily, follow these tips.
1. Determine What You’re Going to Sell
The first thing you must do is to determine the products you are going to sell. You can try figuring out based on your own passion and interests. However, remember that these two things are not enough. You need to make sure that there is a demand for your products.
In addition, think about how you will acquire the products you will sell. Check if you can easily get them from your suppliers. Importantly, you also have to think about how much revenue you can get from selling those products. Think about how much it would cost to purchase them and how much you can sell them for.
2. Know Your Target Audience & Competition
When choosing products, you also have to think about who will buy them. Create a buyer persona to help you understand your ideal customer better. Take time to research your market.
You must do a competitive analysis as well. Figure out how big your chance is to beat the competition. Know who your competitors are and learn their strengths and weaknesses so that you will be able to make plans on how you are going to make your store outstanding.
3. Choose the Right Location
Be where your customers are. This is exactly how you should choose your retail location. You might think that choosing a remote location where there are no competitors around would be effective, but this is not necessarily true.
You must guarantee that your store is located in a strategic area. If you are going to choose a quiet location, you must make sure that it can still bring customers to your store.
3. Figure Out Your Finances
After determining the products and location of the store, the next step is to compare your plans against the money you have. Remember that you might not make any profit during the first few months. So, you should be realistic and not assume that profits will come to you right away.
Your capital must be able to cover your rent, procurement, shipping, water and electricity, marketing efforts, staff salaries, and so on. If you are not sure yet, you may need to delay opening a store for some time while selling your products online.
Get the Best People
Next, you need to make time to interview your future retail staff by yourself. Don’t rely on other people for recruiting staff, because you don’t want to end up hiring incompetent people.
After finding the right people, you must provide them with proper training related to product knowledge, mannerism, and the use of technology. Make sure they know how to work with various technology tools, such as POS systems, barcode scanners, biometric attendance machines, and etc.
Choose Reliable Suppliers
Choosing a reliable supplier is one of the most important steps in this guidance. Low prices do not guarantee the quality of products and services offered by a supplier. Fast response, product availability, and timely shipping are some of the important points that you should consider.
To make it easier for you to find the right supplier and get your items on time, consider using a purchasing system. The purchasing system maintains the information of all your suppliers, allowing you to create requests for quotations and purchase orders automatically. It also enables suppliers to submit their quotations through a portal, allows you to send blanket orders, and provides you with incoming product information.
Create Unique Sales Promotions
Creating sales promotions is a must to make the audience recognize your new store. Don’t worry too much about how much money you are going to spend on promotions.
Instead of giving discounts, you might want to be a little more creative by giving souvenirs or vouchers to your first buyers. You can work with some communities or other businesses to strengthen your branding and promotions.
Adapt to Technology & Automation
Last but not least, you also need to adapt to trends and changes in the retail industry. Your competitors may have eliminated manual processes and switched to automation, so you better start doing the same thing.
The ability to accurately forecast market demand and revenue will help you stay ahead of the competition. An ERP system can help you make that happen.
ERP provides a comprehensive solution package for retailers, covering all operations from purchasing management, inventory management, POS, to staff management. With most of processes being automated, you will be able to run your retail business efficiently.